Cap-and-trade critics say it will cost Californians at the pump

Posted at 4:45 PM, Jul 18, 2017
and last updated 2017-07-18 21:25:51-04

(KGTV) - As part of their strategy to combat climate change, California lawmakers have extended California’s cap-and-trade program. Approved on Monday, Assembly Bill 398 will continue the program until 2030.

Cap-and-trade is a market-based regulation that is designed to reduce greenhouse gases from multiple sources. Companies like oil refineries and ports are required to buy permits to release greenhouse gas emissions, and there's a cap on how much can be released.

The state says the program will help put California on the path to meet its goal of reducing greenhouse gas emissions to 1990 levels by the year 2020, and ultimately achieving an 80% reduction from 1990 levels by 2050.

Assemblyman Todd Gloria (D-San Diego) supports the bill, "The end results of this will hopefully not just be preserving our natural resources and our beautiful quality of life, but also preservation of public health."

Gloria says that means less pollution in communities, less congestion and less smog.

However, critics say it will ultimately hurt Californians at the pump. Program costs from transportation fuel suppliers are often passed on to customers in the form of higher prices.

Republican Senator Jim Nielsen (R-Tehama) points to an estimate from the non-partisan Legislative Analyst Office. With the cap-and-trade extension, the office estimates drivers could pay another $0.63 per gallon by 2021. That’s in addition to the car and gas tax of $0.12 going into effect in November.

Richard Rider, Chairman of the San Diego Tax Fighters says the program does more harm than good.

"Business taxes are never paid by business. They're paid by the customers," said Rider. "It's hard to say how much it's going to be. We're already almost a dollar higher than the rest of the nation in the price of our gasoline, for a number of factors unique to California, and this is going to widen that disparity."

Some drivers like Jason Jaffe say gas is already too high. He hopes extending cap-and-trade won't result in the high prices analysts are estimating.

"You see my two little girls here, it would be nice to put more money away from them," said Jaffe. "It's one thing to raise a cigarette tax, you want to smoke you pay the price for that. You want to drink alcohol, you pay a price. But gas? Everybody has to drive."

In a statement, Sen. Nielsen said:

"Drivers will soon have to pay at least $10 more each time they fill up their tank. An average driver fills up their car about once a week. This will become highly personal for families. How much more taxation will Californians have to take?"

But Democrats say the state is being proactive and a leader in combating climate change.

Gloria issued a statement in favor of the program's extension:

    “As the author of the City of San Diego’s groundbreaking climate action plan, I have always believed that the threat of climate change is real and it requires urgent action for the sake of all humanity.

    While the Trump Administration works to roll back gains at the national and international level, California must take up the mantle of global leadership in the fight against climate change. When we see the impacts of our changing climate virtually every day and working families are subjected to toxic emissions from polluters, we simply cannot look the other way and fail to act.

    California’s cap-and-trade program is the most effective and cost efficient state solution we have to combat climate change and it is being replicated by others around the world. More importantly, the legislation approved today will maintain our progress, help keep utility costs low for working families through household climate credits, create more clean energy jobs for the middle-class, and enable us to continue reaching our greenhouse gas reduction targets.”

Money from the program goes towards efforts to reduce greenhouse gas emissions. It's also being used to help fund the bullet train from Los Angeles to San Francisco.