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Study: ‘California-Only’ Diesel Will Come at High Cost for State

April 27, 2012

SACRAMENTO, CA -- The California Trucking Association (CTA) released a study that shows significant job losses directly attributable to California Air Resources Board's (CARB) fuel policies. Goods movement and agriculture sectors will be especially hard hit if the policies are allowed to go into effect as currently designed.

The report, "The Impact of the Low Carbon Fuel Standard and Cap-and-Trade Programs on California Retail Diesel Prices," details the effect that CARB's regulatory actions will have on the state's retail diesel future, which the study’s authors say will lead to a $6.69 per gallon price tag.

The study, prepared by Stonebridge Associates, Inc., finds that by 2020 CARB's Low Carbon Fuel Standard (LCFS) in combination with the AB 32 Cap-and-Trade Program could increase the price of diesel fuel by $2.22 per gallon. That would represent more than a 50 percent increase in the price of diesel fuel and $6.69 per gallon at the retail pump. The average price difference between California and neighboring states would be $2.33 per gallon when accounting for taxes, according to the CTA.

According to the study, between the year 2015 and 2020, these higher "California-only" diesel fuel costs will cause a loss of nearly 617,000 jobs in the containerized import sector, $68.5 billion in lost state domestic product, $21.7 billion in lost income, and $5.3 billion in lost state and local taxes.

California's transportation and logistics industry is responsible for almost 14 percent of the state's economy. However, the study states that a "California-only" diesel price caused by CARB's program design will put California's transportation sector at a significant competitive disadvantage.

The report added that the higher diesel fuel price will have other economic consequences, affecting food, fuel, clothing, and other essential services transported by trucks.

"The Impact of the Low Carbon Fuel Standard and Cap-and-Trade Programs on California Retail Diesel Prices" can be downloaded here.

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