Energy

‘Hit The Working Class Between The Eyes’: California Green Proposal Could Spike Pump Prices By 50 Cents

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A proposed environmental regulation in California could directly result in a nearly 50-cent increase in per gallon prices at the pump in the state, according to E&E News.

California, which currently has the highest average per-gallon gasoline price of any continental state, is considering rewriting its low-carbon fuel standards to better pursue the state’s aggressive long-term climate targets, according to E&E News. The proposed change could increase average prices at the pump in California by 47 cents in 2025, a jump that could then reach 52 cents the following year, according to analysis published by the California Air Resources Board (CARB).

“This will hit the working class between the eyes,” Jamie Court, the president of Consumer Watchdog, told E&E News. “That is unacceptable in order to get, even in exchange for what are very noble climate goals … If the governor doesn’t stop this, or find a way to keep gas prices lower, it will stick to him.”

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California’s low-carbon fuel standard is based on a system of credit trading designed to incentivize the use of lower-emissions fuels, like corn ethanol and diesel fuel derived from fats and oils, according to E&E News. The standard sets an annual maximum on fuels’ carbon footprint, allowing producers who stay below the threshold to earn credits that they can then sell to producers who are in excess of the limit.

This system has already contributed to California’s high gas prices, but the proposal under consideration would increase prices more significantly than existing regulation has so far, according to E&E News. The proposed overhaul to the low-carbon fuel standard would see major reductions in the maximum allowable emissions for fuels, which would likely prompt producers to buy even more credits and potentially pass those excess costs on to consumers.

Currently, the state is tied to a 20% cut in allowable carbon emissions relative to 2010 levels by 2030, and the proposal being considered would strengthen that reduction to 30%, according to E&E News. The proposal also calls for a 90% reduction by 2045, a threshold which CARB projects could add $1.83 to the price of each gallon of gas sold at the pump in the state.

The policy could increase diesel fuel’s per-gallon price by 59 cents next year and by $2.40 come 2041, while jet fuel could jump by 44 cents per-gallon next year and by $1.94 by 2041, according to E&E News. Currently, gas costs about $4.65 per-gallon on average in California, the highest average of any state other than Hawaii, according to AAA data.

Some critics of the policy, like Court, are concerned that sudden and significant price increases at the pump will be regressive, hitting the less wealthy segments of the state’s population the hardest given that those demographics are less inclined and able to spend on a new, more fuel efficient or electric vehicles, according to E&E News.

Neither CARB nor the office of Democratic California Gov. Gavin Newsom did not respond immediately to requests for comment.