Possibly, you might have noticed it costs a little bit more at the gas pump these days. Because of a California Greenhouse Gas law requiring polluters to clean up their act, the petroleum industry is passing on the costs to the consumer. The question remains: is this a fee or a tax?
In 2006, the State signed into law AB 32 which requires the reduction of statewide "Green House Gases" (GHG) emissions to 1990 levels but gives air-polluters until 2020 to get the job done.
It turns out the Air Resources Board (ARB) is utilizing California's "Cap and Trade" program as an enforcement device to implement AB 32. In general, the policy requires companies that produce pollution, such as a utility or a refinery, to buy "permits" from the State which would allow it to send a specified amount of carbon dioxide and other greenhouse gases into the air each year. In successive years the amount of credits would be reduced by 2 or 3 percent. The "Unused" permits could be bought and sold by the polluters in a marketplace or over the internet. If, for example, a company is able to operate 20 percent below its pollution allowance, it could sell the unused portion to a company unable to meet the designated quota.
The logic behind this scheme is "jaw-dropping" to say the least. If one company is able to lower its pollution, but sells off credits to others thus allowing them to exceed pollution requirements, how are California's greenhouse gases reduced?
Why should a polluter be required to buy credits instead of spending the same money to correct his air quality problem?
If a State Legislator proposed a tax to assist polluters in buying "credits" which would allow them to dump thousands of tons of pollution into the air, the voter would probably say "no!" But, following the circular logic being utilized here: Legislators pass an air pollution law - the polluters then raise their rates to accommodate this legislation; how is this not a tax?