Taxation With No Intended Purpose-
Well the 1st of the year is here and has passed, and some of what we have been talking about happening, is happening. Let’s talk about one item that will affect nearly every one of us as individuals, and as businesses-the enactment of Cap and Trade on oil refineries in California.
The concept here is that the California Air Resources Board (CARB) wants to reduce carbon emissions to, arguably, comply with the EPA’s demand that they do so. By “taxing”, or forcing heavy carbon fuel producers to buy “credits” for their carbon emissions, the concept is that the folks buying the credits will “feel the pain” and stop emitting so many tons of carbon into our atmosphere.
So-now that the refineries have been included, what is really their incentive to reduce carbon emissions? They have told us for years they will simply raise the cost of their refined fuels to cover the credits, and we just saw the first fuel increase in many months within the last few days. The ‘talking heads” keep telling us the fuel price increases we can expect range from a few pennies per gallon to as much as 76 cents per gallon. Let me ask you all a question-since fuel prices have dropped dramatically in the last several months, has that led to you driving more miles or are you driving about the same miles and just pocketing the savings? If you are like me, you are not driving more miles, you are driving about the same miles. So, if logic holds, if CARB raises the cost of my diesel at the pump by charging the refineries for carbon credits, will that make me drive less? Nope!