Hill residents and visitors have benefited from falling gas prices this fall and although the market price of gas will depend on the world price of oil, the pump price of gasoline may increase 9 to 10 cents this month.
This is the consequence of a California law (Assembly Bill 32) enacted in 2006 to curb air pollution, greenhouse gas emissions to 1990 levels and respond to climate change problems.
Initially, oil manufacturers were part of the state Cap and Trade program. As of January, now fuel suppliers also come under its requirements either to reduce the carbon pollution in their product or to obtain allowances or permits. These set limits and may be sold or traded among producers and suppliers, hence, the name “Cap and Trade.”
Propane was added to the natural gas section. Now suppliers also will have to have allowances for carbon emission, and whether they build this cost into their prices is their decision, according to David Clegern, spokesperson for the state’s Air Resources Board.
This year, an allowance for a metric ton of carbon emission costs $12. Each year, the total amount of carbon emissions permitted is reduced 3 percent.
Economists and state officials assume the suppliers will pass the cost of the permits on to gas purchasers. Opponents of the program have referred to this price increase as “the hidden gas tax.”
California drivers currently pay about 48 cents per gallon in state taxes, second to New York’s levy of 50 cents.
Transportation constitutes almost 40 percent of all carbon pollution produced in California, by far the largest contributor to greenhouse gas emissions. These fuels also produce 80 percent of smog-causing pollution and more than 95 percent of fine particle pollution from diesel engines. Reducing emissions from the transportation sector is critical to achieving the 2020 greenhouse gas reduction limit required by AB 32, as well as meeting ambient air quality standards and reducing localized health impacts.
Californians should expect a continuation of the state’s efforts to reduce carbon emissions. On Monday, Gov. Jerry Brown applauded the efforts already accomplished and the anticipation of achieving the 2020 goals. But after lauding the past, he promised higher goals for 2050.
“Toward that end, I propose three ambitious goals to be accomplished within the next 15 years: increase from one-third to 50 percent our electricity derived from renewable sources; reduce today’s petroleum use in cars and trucks by up to 50 percent; and double the efficiency of existing buildings and make heating fuels cleaner,” Brown proposed.
When he said, “We must also reduce the relentless release of methane, black carbon and other potent pollutants across industries,” his message is clearly an endorsement of AB 32 and the ARB’s implementation of the landmark legislation.
Calling the achievement of these new goals exciting, bold and necessary, Brown concluded, “Taking significant amounts of carbon out of our economy without harming its vibrancy is exactly the sort of challenge at which California excels.”