So-called carbon 'tax' could pump up California gas prices Jan. 1, group claims

When you head to the pump on Jan. 1, 2015, you may have to pay more for gasoline in California. It's part of what some business groups claim is a hidden gas tax or carbon tax that was *not* approved with a public vote by Californians.

In 2006, the Legislature and Gov. Schwarzenegger passed Assembly Bill 32 which set an absolute statewide limit on greenhouse gas emissions. The program, known as the cap and trade system, required oil manufacturers pay a fee for emissions. Beginning in 2015, the provisions of AB32 expand to suppliers of gasoline and diesel fuels. Those fuel suppliers can purchase permits, known as allowances, to offset the greenhouse gas emissions related to the gas and diesel that they sell you, according to California Air Resources Board (ARB) spokesperson Dave Clegern.

That cost will be passed onto consumers in the form of higher fuel prices, a coalition of business groups alleges. The National Federation of Independent Business (NFIB) considers the possible price hike a hidden tax. The alliance will call on ARB to consider the impact before the cap trade program includes transportation fuel suppliers.

"When AB32 was passed, they in effect created regulations that would affect the industries that regulate the carbon emissions. But nowhere in AB32 and in the cap and trade system was there talk about extending this to transportation fuels," NFIB spokesperson John Kabateck said. "The Air Resources Board in a very sneaky fashion decided to put in the language that they would, come January 2015, extend this regulation and this tax, this carbon tax to all transportation fuels. That means not just you and me driving into a gas station but anybody who is affected and relies on transportation fuels."

ARB's Dave Clegern countered the aliance's per-gallon (increased) price figures come from a modeling exercise done before the cap-and-trade regulation was even written while another version of the same model shows fuel prices actually decreasing as a result of these regulations.

Clegern added the price of allowances prices have remained in the $10-$14 per metric ton range and ARB does not expect them to increase substantially.

"If there is an increase in prices in January it is just that—a price increase, not a tax—and it is coming from suppliers, not ARB," Clegern said.


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