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Home Front Economy
Fuel Surcharge, 'Price Floor' Could Help California Cut Emissions While Bankrupting Them
2009-01-22
NOTE: LINK IS TO PDF of The Implications of a Gasoline Price Floor for the California Budget and Greenhouse Gas Emissions, by Severin Borenstein of CSEM.

(Summary here is from subscription newsletter, so not linked.)

A variable surcharge on transportation fuels could help California curb greenhouse gas emissions and generate revenue the state needs to shrink its budget deficit, Severin Borenstein, a University of California Berkeley economist, said Jan. 15.
Kinda hard to do with everybody leaving the state, isn't it?
Unless you spread it to all 57 states. Stay tuned ...
At a conference on clean transportation technologies and policies, Borenstein outlined a proposal he floated late last year soon after state Democratic leaders proposed a 1.5 percent sales tax increase to boost revenue.

Borenstein said the "Fuel Price Stabilization Program" would create a "price floor" for gasoline and provide clear long-term price signals for consumers that we intend to screw over them as much as possible and for investors in clean technology.

Under the plan, a surcharge would be imposed on fuel whenever the price falls below a certain target. The surcharge would apply to retail sales of gasoline, diesel, and jet fuels, and it would move inversely to the world price of oil, Borenstein explained.
The mind boggles. This guy is an economist?
The price target would depend on how much revenue the state wants to generate and the "price signal" it wants to send to discourage increased fuel use, according to the plan.
Ummmm - it might not work out quite that way....
Rapid drops in gasoline prices, like the one that began in July 2008, are likely to turn drivers back to gas-guzzling vehicles and habits and we can't have that, hindering the state's effort to reduce greenhouse gas emissions, Borenstein said.
Then why don't you quit breathing? There'd be less CO2 right there.
The surcharge would be a tough sell in the Legislature and to the public because in all some cases it would could mean higher gasoline prices, Borenstein, a professor at Berkeley's Haas School of Business and director of the UC Energy Institute, acknowledged.
"We'd make sure it happened. It's for the children, you know."
Borenstein's Fuel Price Stabilization Program, however, does appeal to clean technology developers who want a price floor for oil that would encourage investor and consumer interest in their products.
So the palms are greased fix is in? (They hope.)
CALSTART, the consortium of businesses and groups that support clean transportation technologies and host of the two-day conference, is recommending that the state adopt such a fuel surcharge.
"It's further bankrupt the state, if that's possible, but what the hell, we'll get ours."
State Assemblywoman Fiona Ma (D) led a discussion on how best to motivate consumers to admit they exist to support the state reduce their carbon footprints. Carbon taxes, fuel surcharges, and other hidden fees were among the options panelists said would be most effective.

The Sierra Club's Bill Magavern, however, said the fees cannot appear to be penalizing consumers.
"It's OK to penalize the rubes consumers, just make it look like you're not."
"We need to give them choices, like non-vehicle ways to get around," he said.
They can walk, after all. Though of course we don't have to.

Good grief.
Posted by:Barbara Skolaut

#12  Expect even more high tech and aerospace jobs to move to the Greater Las Vegas area in the next two years - since Cali is doing everything in its power to bankrupt them instate.
Posted by: Shieldwolf   2009-01-22 22:31  

#11  Berkeley economist - all you need to know in just two words.
Posted by: DMFD   2009-01-22 21:42  

#10  AH, Is it paying for itself?

No, my property tax went up with the last election to subsidize the thing. It's a front to subsidize government employees who can't afford to live in Santa Fe because of the usual suspects driving prices up. So we're providing them 'affordable' transportation from Albuquerque.

Arizona and New Mexico have got to love this plan

Nah. most of our communities near civilization have passed building ordinances that require builders to show where they're getting the water to sustain any new developments. Not that the local corrupt government isn't open to Kelo the old folks [see article on Richardson's nomination withdraw down below], but that has a tendency to upset their usual voting block. The one big exception is the Indian Reservations, who are not about to sale land though very expensive leasing deals are possible [they've discovered the wonders of Washington lobbyists]. Arizona and Nevada can have the Californistas.
Posted by: Procopius2k   2009-01-22 20:13  

#9  Arizona and New Mexico have got to love this plan : Cali should just call it the "2009 Jobs and Industrialization Transfer Act".
Posted by: Shieldwolf   2009-01-22 19:39  

#8  "But you just know it'll go into the general funds pockets of the politicians to vanish into the sucking maw of their perks and their special interest buddies."

Fixed that for ya', K.
Posted by: Barbara Skolaut   2009-01-22 19:04  

#7  While I'd prefer an oil tariff to set a price floor on imported oil, this would be OK if the proceeds went to energy development. But you just know it'll go into the general funds to vanish into the sucking maw.
Posted by: KBK   2009-01-22 18:53  

#6  AH, Is it paying for itself?
Posted by: tipover   2009-01-22 18:25  

#5  Just to remind everyone that NM is running 79 mph commuter trains up the median of I-25 between Santa Fe & Albuquerque at this moment.
Posted by: Anguper Hupomosing9418   2009-01-22 17:44  

#4  I just had a wild thought, tale one lane of the interstate and lay high speed electric rail.

Super Lionel train. (So to speak)
Posted by: Rednek Jim   2009-01-22 17:05  

#3  The "floor" is to cover up the fact that the taxes collected from gasoline are in freefall 'cos a) the economy stinks and everyone's driving less/not buying stuff that has to be delivered by truck and b) the hybrid/alternative fuel vehicles are starting to have an impact.
Posted by: Seafarious   2009-01-22 15:58  

#2  And here I thought the market was doing to California what their fruits-flakes-and-nuts have espoused for decades and moving quickly to a second world economy with a third world population with first world academic twits in charge.
Posted by: Procopius2k   2009-01-22 15:12  

#1  thats great, especially considering they've spent the last 50 years creating road infrastructure so that people now routinely commute hours (many, many, miles ) to and from work daily.
Posted by: beach boys   2009-01-22 14:10  

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