Prop 23 Update: Current Gas Prices a Test Run for Cap and Trade – The Impact?

Russ Steele

If you think that gas prices are high now wait until AB-32 Cap and Trade kicks in, starting in January 2013.

Wayne Lusvardi writing at the CalWatchDog has some details:

Under Cap and Trade, gas prices are expected to increase from $0.26 to $1.61 per gallon. One study concluded that, if all the provisions of Cap and Trade were loaded into the price of gasoline, it would reflect about a $2.70 per gallon gasoline price increase above prices as they were before the current surge.  In other words, California’s current gas price bump may be a pimple of what is to come in three months when Cap and Trade kicks in on Jan. 1.

Average gasoline prices in California shot up 50 cents per gallon in the last two weeks from $4.11 to $4.61 per gallon, according Reuters.  The price difference between Jackson, Miss. at $3.43 per gallon and California at $4.61 was $1.18 higher. That’s about a 34 percent price spread.  Many independent gas stations were reportedly shutting down — not because of lack of supply of gas, but due to the jump in price that reduced profit margins to zero.

The question is what will be the long term impact on the local economy as fuel, gas and diesel, prices stay well above $4.00 a gallon? Potential tourist income will not be going up to compensate for higher fuel prices.  Their budget are being challenges by higher food prices due to increased transportation and agricultural costs.  All these cost increases will result in less disposable income. Income familes might invest in a day or vacation trip to Nevada County.  Some families will be making the choice between food or fuel.  Those decisions will impact our local economy.

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About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

One Response to Prop 23 Update: Current Gas Prices a Test Run for Cap and Trade – The Impact?

  1. MikeL says:

    Russ,
    I have been telling everyone I know that lives in Kalifornia (The C is now changed to K because of Arnold the cheating let friends children get away with murder Schwarzenegger) that they should get ready for higher costs of food and fuel due to AB32. Most have never heard of AB32 or if they have heard of AB32 claim that since I am against AB32 that I must like pollution.

    The higher prices of fuel will be used as a propaganda tool by the left to show how the evil oil companies are screwing everyone. The left will NEVER own up to the unintended consequences of their ill conceived utopian ideas.

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