Cap and Trade Costing CA Drivers $2 Billion Per Year

carpool-laneAs fast as California drivers will spend an extra $2 billion at the pump this year to fund the controversial cap-and-trade program, state lawmakers are finding ways to use it, according to two reports released Thursday.

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Cap and trade was implemented by a state regulatory board to try to reduce greenhouse gas emissions to 1990 levels by 2020, as required by law.

One of several additional costs tacked on an estimated 11 cents to each gallon of gas and 13 cents per gallon of diesel, according to the Legislative Analyst’s Office, driving average prices to some of the highest in the nation.

“Most drivers have no idea that this is costing them $2 billion per year because it has been largely hidden from them,” said Asm. Tom Lackey, R-Palmdale. “It’s clear that we need to improve transparency for consumers about cap and trade’s costs.”

Where does the money go?

Cap-and-trade money is currently appropriated as follows: 40 percent is unallocated, 25 percent is for high-speed rail, 20 percent is for affordable housing and sustainable communities grants, 10 percent is for intercity rail capital projects and 5 percent is for low-carbon transit projects.

Waiting to spend the money are 36 pending proposals in the Legislature totaling $7.5 billion, which is more than double what was proposed in Gov. Jerry Brown’s draft budget, according to a study by the California Tax Foundation.

The most expensive proposal is SBX1 2, sponsored by Sen. Bob Huff, R-San Dimas. This bill would divert $1.9 billion annually to street and highway construction projects and block further cap-and-trade funds from going to high-speed rail.

In addition to barring further funds from going to high-speed rail (a recurring theme for Huff), the Huff bill is too vague to show whether it will reduce GHGs or not and may “leave itself open to litigation,” according to the legislative analysis.

Another bill, sponsored by Asm. Jimmy Gomez, D-Los Angeles, would fund nearly $1 billion worth of projects, including up to $100 million on new toilets. According to the report, many of the initiatives would likely reduce GHG emissions, while other parts of the bill might not.

Other bills include synchronizing traffic lights, implementing a car buyback program, promoting recycled glass and preventing forest fires. And while its unclear what effect most of the proposals would have on GHG emissions, the report was issued to help voters and legislators make that determination.

“This report identifies the auction revenue spending proposals that are active in the Legislature, so they can be given proper scrutiny,” California Tax Foundation Director Robert Gutierrez said in a statement.


Opponents of the program argue that by collecting revenue from drivers and businesses (those with large GHG emissions) it amounts to an illegal tax, which would have needed to be approved by a two-thirds legislative majority to be legal. A previous court ruling — which is now being challenged — found that the revenue is OK as a regulatory fee and thereby not subject to a two-third’s vote.

In 2006, the Legislature passed AB32, which tasked the state ARB to implement the GHG reduction. Proponents say this mandate gave the ARB the legal authority to auction off emission allowances (there’s a “cap” on emissions and business can “trade” them at auction).

In January, the non-partisan Legislative Analyst’s Office recommended lawmakers either narrowly tailor their proposals to unquestionably reduce GHGs or approve the program with a two-thirds majority to avoid legal complications.

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  1. Cap and Trade is taxing the air we breath in California. This tax is United Nations Agenda 21.People should be outraged. Learn aobu this monster at this website and then get involved.

  2. Another BIG mistake by Jerry the Stupid with his cohort Mar Nichols of CARB. Neither of these two fools realize that the whole global warming fiasco is a hoax started by a disgruntled professor at Scripps La Jolla is the ’50’s. (Read Vapor Tiger by Adrian Vance) It came out recently that NASA and NOAA have been “rearranging” old temperature charts to make it hotter currently than in the past. Sorry folks, there has been little change from NORMAL since 1880. And this info comes from German scientists along with our own. The Little Hoover Commission has been after Jerry the Stupid to do a cost/benefit study on his Green Mandate. He has been ignoring them for years because as Spain and Germany found out, the costs FAR out weigh the benefits.

  3. Forgot to mention that CO2 which makes up only .04% of the atmosphere goes up AFTER the temperature rises. It doesn’t cause temperature rise, it is the RESULT of a rise. Furthermore their “vaulted” greenhouse effect violates the Second Law of Thermodynamics. A greenhouse has a lid and sides.

  4. Oblamo binLyen says

    SackofTomatoes makes Washington DC look like the JV team. If it wasn’t for corruption this state wouldn’t be scraping the bottom of the barrel in every category.

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