You try to do a good thing, but someone always has to come around and say there's a down side. In this case, the good thing is AB 32, also known as California's greenhouse gas emission reduction law, and the potential down side is one that could generate a lot of bad publicity.

First, some background. The idea behind the law was to reverse the climbing trend of emissions in the state, shrinking them down to 1990 levels by 2020. That means, in the end, a "15 percent reduction in greenhouse gas emissions compared to the 'business-as-usual' scenario in 2020 if we did nothing at all," according to the California Air Resources Board (CARB), which is the force behind the law. AB 32 was passed in 2006 and was signed by then-governor Arnold Schwarzenegger. The emission cap for 2013 was set at a level about two percent lower than the emissions that were expected (in 2006) to be in 2012, and AB 32 gets stricter from here. It drops another two percent (roughly) in 2014 and then about three percent every year from 2015 to 2020.

CARB chair Mary Nichols said she doesn't believe the oil companies.

Since there is a cap on overall emissions, the affected industries can trade emissions credits as one way to comply. Or they can conduct cleaner operations. In 2013, the law took effect for electric utilities and large industrial facilities (which have already racked up $1.5 billion in pollution permit fees), and it will kick in next year for "distributors of transportation, natural gas and other fuels." As 2015 approaches, the oil industry is warning that the increased hassle of AB 32 will add at least 12 cents to the cost of a gallon of gas in California. State regulators claim the increase could be anywhere from negligible to over 10 cents a gallon, the AP says. The current average price in the state today is about $3.90. CARB chair Mary Nichols told the AP that she doesn't believe the oil companies when they warn the public about higher gas prices. "It would appear to be some deliberate measure on their part if there were to be a sudden rise in [fuel] prices on January 1," she said.

Dave Clegern, CARB's public information officer, says that the reported cost increases are unlikely. "So far," he told AutoblogGreen, "the costs of compliance with AB 32 programs has held to the basic economic model which indicates a possible impact on fuel prices of three-to-five percent over an eight year period. This is less than the rate of inflation."

An overview of AB 32's cap-and-trade provision is available here in PDF and a general state government page on the law is here. You can read more about a proposed alternative (a flat carbon tax) for the gas producers here. Clegern also dismissed the flat tax proposal because, "ARB's mandate under AB 32 is to design programs which reduce greenhouse gas emissions. The emissions cap in the cap-and-trade program ensures verifiable emission reductions each year. The carbon tax discussed in the [AP] article cannot ensure any emissions reduction."


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    • 1 Second Ago
  • 198 Comments
      2 wheeled menace
      • 1 Year Ago
      I think cap and trade is silly, but gas prices SHOULD be higher, because their externalities need to be paid by the people shipping, producing, and using them. No more of this 'make the taxpayers pay for oil spills' BS, please.
      Rodney
      • 1 Year Ago
      For all the health nuts the people from California are, they sure know how to screw themselves up.
        Joeviocoe
        • 1 Year Ago
        @Rodney
        Yeah, being able to breathe without face masks in Los Angeles was a real screw up.
      Koenigsegg
      • 1 Year Ago
      Oil?... oh, remember that thing... its been so long
        Rob J
        • 1 Year Ago
        @Koenigsegg
        Since you bought any consumer good?
      mylexicon
      • 1 Year Ago
      Carbon taxes are a consequence of economic productivity and economic growth. Don't punish people for being productive. Reward people who figure out how to be productive without generating pollution. If you're not willing to pay someone for acting as an agent of good on your behalf, you aren't worth a sh*t, frankly.
      Spec
      • 1 Year Ago
      So gasoline is around $4/gallon and it might go up 10 cents a gallon . . . so it is a 2.5% increase? Pffft. So what. If that bothers you then get a more efficient car or drive 2.5% less. Get over it.
        1454
        • 1 Year Ago
        @Spec
        Since when are the government numbers ever accurate. Name an instance? The people this harms claim a minimum of 12 cents or more. More than likely more considering this is the same system as most of Europe uses and they have nearly 8 dollar gas. Do you want 8 dollar gas? If so, you are extremely slow.
          brandon
          • 1 Year Ago
          @1454
          Did you learn reading comprehension? I said EUROPE you idiot. They have the equivalent of 8$/gal gas in the EU with crap and tax. So the fears aren't unwarranted. Please learn to read or don't respond. God.
          Spec
          • 1 Year Ago
          @1454
          My 6KW solar PV system generates all my electricity needs for both my house and my car. I do not buy electricity or gasoline. You were saying . . . . ?
          Spec
          • 1 Year Ago
          @1454
          Since when are oil industry numbers ever accurate? But even if we assume their number is correct . . . 12 cents a gallon means a ~3% price increase. Big whoop. Get over it.
          Spec
          • 1 Year Ago
          @1454
          BTW, 8 dollar gas would be fine with me as long as that $4 increase is taxes and goes for good programs and the increase is phased in over time.
          brandon
          • 1 Year Ago
          @1454
          Great, if it is fine with you, then volunteer that 4/gal that you drive a year to helping with the deficit. As for me, I prefer the government to stay where they belong. Which is to matters of criminal law, not regulating industries they have no business in. You are the definition of tyranny. Don't volunteer others money. If this is how you want to change the discussion, then it will devolve into a topic on taxes.
          brandon
          • 1 Year Ago
          @1454
          Or, we can have people put their proverbial money where their mouth is. Stop living so far away from work. Stop buying from non local producers. Stop using so much electricity, etc. If you don't want to live in it, then do something about it on the individual level. Don't force everyone to abide by your lifestyle.
          Joeviocoe
          • 1 Year Ago
          @1454
          Putting 'money' where their mouth is? How is that a representative democracy? Some have a LOT more "mouth" than others. The real "choice" people should have is their vote, not the size of their wallet... because if Money=Choice.... then the majority of people have only an illusion of choice. If people knew the truth about the reasons for the Iraq war, their "choice" would be very different.
          Joeviocoe
          • 1 Year Ago
          @1454
          How about making emissions illegal then? The collective mass burning of Carbon affects the health of us all. For that, the free market will NOT be able to fix.
      ROLO
      • 1 Year Ago
      must be true since big oil said it i mean My pants were blue yesterday and they told me that because of it my gas would be higher too.
      SloopJohnB
      • 1 Year Ago
      And that's a GOOD thing. If Congress had any balz it would raise the federal gasoline and diesel tax…at least make them equal. That is, raise the gas tax to equal diesel. But I would much prefer a $.25 per gallon increase in both fuel's federal tax per year for 4 years to replenish and rejuvenate the highway trust fund and start repairing infrastructure as well as put more pressure on better fuel efficient cars and trucks.
        1454
        • 1 Year Ago
        @SloopJohnB
        So it's a good thing that you will pay more for EVERYTHING you do. Every business you visit uses some form of petroleum, so that means every good or service you buy will increase. Maybe not much, but it will. Eventually, 5c here and 25c there adds up through a product chain.
          brandon
          • 1 Year Ago
          @1454
          Nor should wars or "peace keeping" missions be included in the cost of oil. We should stop being so ignorant in thinking we are going to stop these stupid people from blowing themselves up. Let them, whatever happens to oil as a byproduct, happens. The government shouldn't be the business of policing the world. Not.....OUR.....JOB.
          1454
          • 1 Year Ago
          @1454
          So you are saying we don't use very many polymers in this county? http://en.wikipedia.org/wiki/Petrochemical It's not just the shipping, is the packaging, it's the building, it's EVERYTHING. How much plastic is used to ship your food and package your clothes? So please look around and see what all you have in your house and office that has petroleum in it. EVEN if you drive an electric car, IT HAS PETROL in it. Sorry, but it does. Hence the reason laws like this don't help anyone. They only hurt EVERYONE. (Except maybe those like Al Gore who stand to benefit from it's use as a middle man)
          Joeviocoe
          • 1 Year Ago
          @1454
          How about, I suggest that we start doing things a bit differently. Fear of 'rising costs' is one of the big reasons why Oil companies can get away with everything. If there are alternatives to gasoline/diesel transportation (as there is now), then we should be prepared to make prices higher so that the alternatives are given proper incentive. Right now, the cost of emissions (global warming and local pollution), is NOT being paid for in the price of petroleum product. And the cost of War and Peace Keeping operations in the Middle East, is NOT being paid in the price of oil.
          Joeviocoe
          • 1 Year Ago
          @1454
          The cost of goods is NOT from the petroleum used in the material... it is from the petroleum used for shipping great distances. You know how the trend over the last decade and more, has been "made in China"? Guess what, China is far away. The shipping is what requires more energy and produces more carbon emissions. We've been on a trend of globalization of everything. Most food people eat is not even grown locally. The fertilizer costs are only a fraction of the cost that it takes to ship that food from farms, to the markets. Perhaps people will want to reverse the trend, and start producing things locally to where they are sold/used.
          Joeviocoe
          • 1 Year Ago
          @1454
          I understand it is in everything... but the cost to produce items using petroleum is so small compared the cost in petroleum to move those products around the globe. Even in automotive production, the energy to produce the vehicle is a small fraction of the energy that will be used during its life.
          brandon
          • 1 Year Ago
          @1454
          Just because we pick and choose whom we police based on oil does not mean we aren't playing the worlds policemen. As I said, if it isn't within our boarders, lower 48 or otherwise, it isn't out problem. We should never devote resources to fighting other peoples wars. Regardless of it's potential to affect our daily lives. That would help people make slightly better decisions about what they use to commute.
          1454
          • 1 Year Ago
          @1454
          Again, scale of outside product usage is irrelevant. The point is that it affects every single product we use. From food to transportation to housing. It's everywhere, and you are basically asking that you pay more for everything you do in life.
          Joeviocoe
          • 1 Year Ago
          @1454
          --"stop these stupid people from blowing themselves up" If that is what the Iraq war was about... then I would agree. But there is a reason why Kuwait and Saudi Arabia's national defense plan consists of holding off enemies for 72 hours, while waiting for the U.S. to come to the rescue. Darfur was in much worse condition if we wanted to just "police the world". But that is not what we have done. We "police" our Oil interest... so yes, the trillions of dollars spent and lost in Iraq should be factored into the price of Oil.
      fulredy
      • 1 Year Ago
      CA keeps regulating itself into oblivion. I, for one, will not mourn their demise. After all, it's self-inflicted.
        Actionable Mango
        • 1 Year Ago
        @fulredy
        Just my observations as a non-Californian. Liberals blame the conservative politicians for holding down tax, conservatives blame liberal politicians for excessive spending, and both sides of the government blame the voters for citizen initiatives. Meanwhile, as an outsider and a political moderate, it appears to me that California has the normal upward and downward swings that all free market economies have. The main difference being that the heights and depths of the swinging sound really big compared to other states due to California's relatively high GDP.
          CoolWaters
          • 1 Year Ago
          @Actionable Mango
          No. Remember Republican "economics" calling for budget cuts during a recession. Austerity budgets in a recession are suicidal, they damaged the states that implemented them. They damaged the nations that implemented them, the UK, Canada and Australia all recovered from the crash, then went back into a crash after Austerity budgets were put in place by conservatives. You could say Republican Economics is a Force Multiplier of Economic Failure.
          Jason
          • 1 Year Ago
          @Actionable Mango
          Although CA has a liberal majority, its politicians don't always represent the people of California. There are tons of conservatives in office, except the most influential ones. After all, Proposition 8, a ban on gay marriage, originated here and was passed by voters (obviously swayed by outside forces, as the climate has now changed). Personally, I'm tired of all of the Democrats (esp. the senators) and I used to be a Democrat, but I'm now a moderate Independent because there are good qualities on both sides. I, for one, would abolish the CARB. It's redundant under the current direction of the EPA (another topic, for sure).
        archos
        • 1 Year Ago
        @fulredy
        California is enjoying arguing over what to do with its multi-billion dollar surplus, made possible because voters got rid of the Republican obstructionists in their legislature. They're a model for success.
      • 1 Year Ago
      So what,,,we need to move on...to healthier alternatives.
      theharpyeagle
      • 1 Year Ago
      Every little measure aimed at reducing carbon emission helps. A 10 c per gallon increase in gas seems like a small price to pay in this regard.
      car-a-holic
      • 1 Year Ago
      It's simple; cap and trade is a scam.
        knightrider_6
        • 1 Year Ago
        @car-a-holic
        thanks for the wonderful insight. If I start watching Fox News, I'll just be as "smart" as you.
      NAIF S
      • 1 Year Ago
      another sham by gov't and big business.
        brandon
        • 1 Year Ago
        @NAIF S
        It's funny how the sheep that whine about "Big Business" are willing to turn over the keys to the farm to them when their respective party says "jump, it's in your best interests" snicker, snicker. It's truly hilarious how easily they are fleeced. Notice, this isn't limited to one side though, both "parties" participate.
          Spec
          • 1 Year Ago
          @brandon
          No, I don't agree with that. I look at the program and determine for myself if I think it is in the best interest for society (not just my self interest). But, yeah, there are blind-faith ideologues and that is sad.
          Spec
          • 1 Year Ago
          @brandon
          I'm not a god . . . I'm just a voter. But if you want to think of me as god, that's OK. :-)
          brandon
          • 1 Year Ago
          @brandon
          Who died and appointed you "god" over society? Why is your opinion about what's "good" for society better than mine? That's called self interest.
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