Cap and trade to drive up gas prices

SAN DIEGO (KUSI) – Gas prices may be headed down, but they will be going back up in January, and nobody can say right now just how much. The estimates are anywhere from ten cents a gallon to a dollar a gallon.

The hike is being driven by California’s cap and trade efforts to curb greenhouse gases, and to reduce gas consumption.

The “cap” limits the amount of greenhouse gases a company can release into the atmosphere.

The “trade” allows heavy polluters to purchase – or trade – allowances or permits so they do not have to worry about the cap.

Cap and trade was passed in 2006, and five years later transportation fuels were added to the law, and that is what will drive up prices at the pump starting January 1, 2015.

“We’ve seen estimates from less than a dime a gallon. I’ve seen industry estimates that go up to almost a dollar a gallon,” said Ron Roberts.

The Air Resources Board, or CARB, estimates 16 cents to 76 cents a gallon.

County Supervisor Ron Roberts sits on the CARB board that pushed cap and trade, and later added gasoline and diesel fuel to the law.

He is concerned about the impact of higher gas prices on those who can least afford it, but says some of the revenue generated from the cap and trade will be redistributed to low income communities.

“If you’re putting a penny a gallon, they’re gonna feel like somehow they’re being robbed of their birth right,” said Roberts.

Most people have no idea what cap and trade is.

While companies can buy allowances to continue to foul the air, the average driver gets hit with higher prices at the pump.

At the same time, cap and trade is supposed to drive down fuel consumption.

Supervisor Roberts touts more fuel efficient vehicles using less gas in addition to hybrids and electric cars.

But most people can’t afford these vehicles.

“The gasoline is gonna cost more, California reformulated gasoline does cost more, but we’ve seen health benefits, and air quality benefits that far outweigh anything that these programs have cost,” said Roberts.

But the cost of cap and trade is falling disproportionately on the driver in a state where public transportation is sorely lacking.

The largest contributor to greenhouse gas emissions is the motor vehicle.

Initially, cap and trade will generate millions for state government, but the state will get billions immediately from the gas pump.