Low carbon fuel could raise California fuel prices

Sugar cane for ethanol in Brazil

The Low Carbon Fuel Standard (LCFS), which will be implemented in California starting in January after the defeat of Prop 23, may be an instructive example of the Law of Unintended Consequences. It mandates that carbon levels in fuel be lowered 10% by 2020, by using biofuel or purchasing emission credits. This is certainly a laudable goal.

But Houston, we have a problem. California already has steep gas prices compared to other states. LCFS will almost certainly mean even higher prices. CalWatchdog, in a comprehensive article on LCFS, cites two studies saying that nationwide LCFS would increase prices by 61 cents per gallon. But California is going this alone (so far), something which definitely puts it at a competitive disadvantage even as it helps the environment.

Read the whole article on CAIVN.