Cap-trade may boost gas prices

SACRAMENTO — As California lawmakers debate the future of the state’s battle against global warming, there’s one politically sensitive issue they’ll have to consider: gas prices.

Gov. Jerry Brown wants lawmakers to extend the cap-and-trade program, which requires companies to buy permits to release greenhouse gas emissions. Permits sold in state-run auctions cost less than $14.

However, if the program is extended and the state pushes ahead with tougher climate goals, the price of allowances could rise to $50 over several years, said Ross Brown of the nonpartisan Legislative Analyst’s Office.

If that happens, the price per gallon of gasoline could go up by 45 cents. A separate policy, known as the low-carbon fuel standard, is also expected to boost gas prices. The estimates were provided during a legislative hearing Wednesday in response to a question from Assemblyman Vince Fong, a Bakersfield Republican.

Brown’s administration said extending cap and trade is “necessary to meet the statewide climate goals” and reduce “significant volatility” in revenue generated from permit sales. Brown is counting on the money to help finance the bullet train.