'Hidden Gas Tax' or Not—California's Cap and Trade Policy Starts a New Era

Will California gas station see queues at their pumps on December 31 as motorists seek their last fill-up before gas prices soar 15 cents per gallon, as AB 69 supporters warned? The bill died in the state legislature on August 22.

Marc Lifsher of the Los Angeles Times writes from Sacramento, "The bill, AB 69, was designed to head off what [Assemblymember Henry T. Perea (D-Fresno)] and allies -- in a major multimedia public relations campaign -- called a 'hidden gas tax' of as much as 15 cents a gallon extra that consumers are going to start paying at the pump in January."

The additional cost that Perea referred to would actually be pass-on costs from the transportation fuel companies' participation in the state's cap and trade program operated by the California Air Resources Board (CARB).

In a letter Friday [PDF], Senate President Pro Tem Darrell Steinberg (D-Sacramento) wrote to Perea to say he would not authorize a legislative hearing.

"If we are serious about reducing fuel costs and righting the public health and economic wrongs facing our constituents, we must wean ourselves off fossil fuels and invest in cleaner transportation alternatives and in low-income communities as we did in this year's budget," Steinberg wrote.

"The regulations are expected to raise $2 billion to $3 billion in new state government revenue next year," writes Lifsher. How the funds would be distributed was posted here.

However, "(f)uel companies have already begun participating in the state’s cap-and-trade auctions, buying pollution credits that they can use to help them meet the greenhouse gas emission cap set by the state. Emission caps will not apply to the fuel industry until this coming January, but they have had years to prepare for it," writes Melanie Curry of Streetsblog.

By law, 25 percent of cap and trade funds must be directed to low income, disadvantaged communities—ultimately benefiting Perea's constituents in Fresno and the Central Valley. 

[Hat tips to Melanie at Streetsblog LA and Jackie at Climate Plan]

Full Story: Gas prices to rise in January after bill to suspend 'hidden' tax fails

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