Cap-and-Trade Costing Drivers $2 Billion in Higher Gas Prices

Thursday, April 7, 2016

Senator Patricia Bates (R-Laguna Niguel) released the following statement after Assemblyman Tom Lackey (R-Palmdale) released a new estimate from the non-partisan Legislative Analyst’s Office (LAO) showing that Californians are paying $2 billion in higher gas prices annually due to the California Air Resources Board’s Cap-and-Trade Program. The LAO estimates that fuel prices have increased by 11 cents for gasoline and 13 cents for diesel fuel.

“The non-partisan analysis is a clear indication that this hidden tax is already hurting drivers at the gas pump,” said Bates. “Here’s a simple idea. Let’s use the $2 billion dollars that drivers are already paying to improve our transportation infrastructure instead of asking them for another tax increase. The money’s there and there’s no excuse for the Legislature and the governor to not use it to fix our roads."

Bates is the co-author of Senate Bill X1 2 (Huff) that would have dedicated all cap-and-trade taxes generated from the sale of gasoline to improving California's streets and roads. The bill was defeated on a partisan vote last September.

Bates is also the co-author of Lackey’s Assembly Bill 2066 which would require gas stations to display a per gallon estimate of added costs that cap-and-trade creates for drivers. Currently, there is no disclosure for consumers about these added costs.

In 2015, California became the first state in the country to require gasoline and diesel fuel suppliers to purchase emission credits under cap-and-trade. California gas prices are currently the second highest in the country and have remained significantly higher than the national average even as global oil prices have remained low.