California motorists could pay an additional 50 cents for a gallon of gas — about $700 a year — if the state Legislature reauthorizes a cap-and-trade program that reduces carbon emissions, a report released Wednesday said.
The additional costs would be “particularly burdensome for lower-income households,” which generally spend a larger share of their income on automobile fuel than richer households, the report said.
But at the same time, reauthorizing the cap-and-trade program through 2045 would potentially generate more revenue for the state. If increased demand pushes prices to the maximum allowed, it could produce $11.6 billion annually for emissions-reduction projects. That compares with the $4.4 billion generated last year.
The outcomes are described in a report by the nonpartisan state Legislative Analyst’s Office that lists options for the legislature to consider as it moves to reauthorize cap and trade. The program is authorized through 2030. Legislators and Democratic Gov. Gavin Newsom hope to extend authority for the program by the end of 2025 — a move expected to increase the cost of pollution allowances.
