Every $1/MTCO2 allowance equals an approximate 1 cent per gallon diesel cost increase. The minimum cost of allowances in 2015 are expected to be approximately $12-15/MTCO2, therefore, fuel prices are expected to increase by 12-15 cents.
California-Only Cost Increases:
California already has the fourth highest diesel tax rates in the country. Cap and trade will push California’s fuel tax/fee rate into the lead for the nation’s highest diesel tax rate. By 2030, California’s tax rates will be up to 36 cents higher than the second highest rate in the country and over 85 cents higher than the lowest.