by Greg Slack

Created on: March 08, 2010

Of course changing policy to fight climate change will increase gas prices. How can anyone hope to effect a problem as vast as climate change without attacking its source? To even think somehow gas prices will putter along as always, when the only real legislation with a chance of success is based on a cap and trade system is illogical to say the least.

Currently most areas of the USA have several levels of taxation on each gallon of gas purchased by the end user alone, not to mention those imposed on the retailers, refinery and drilling or even the transportation companies that haul it. Here in Ohio we pay an extra 28 cents per gallon for state tax, and 18.4 cents federal tax that's a total of 36.4 cents per gallon. And that doesn't include any county or city piggyback taxes that come and go. This is all current taxation information from the Ohio Dept of Taxation.

Now imagine how a climate change bill will effect gas prices, if they already tax this much now. Then take into consideration the nature of cap and trade being a trade market where investors can buy and sell carbon credits like they do stock on Wall Street. They will be able to use speculative price modeling and all other manner of things to manipulate this new market just as they did with sub-prime mortgages. you remember what happened in that little venture I'm sure. They manipulate the market causing prices to rise and fall and since carbon based markets are directly linked to carbon output, and fossil fuels are the prime factor in CO2 emissions and you see my point.

How can gas prices not go up in turn? They will go up, they will have to because cap and trade systems make this an inevitability. They are all indelibly linked to one another as one is manipulated the others will respond. 

If this alone does not convince you gas prices will rise with new climate change policies, think of how gas prices rise with every single incident in the middle east. Literally every time anything happens in any oil producing nation or region, the current prices rise. Not just on the barrels of oil they are purchasing but even the gas from the oil purchased months before. One busted part on an oil rig in Saudi Arabia that may take a day to fix, can change the price drastically of gas already refined from oil purchased almost 6 months before.

Still think climate change policies won't effect gas prices? Consider virtually all currently proposed climate change legislation create incentives for companies to reduce carbon emissions and or buy and trade carbon credits. If they do this companies will be compelled to cut back on shipping and any carbon emitting production. Anybody with any knowledge of economics can tell you a reduction in products produced or shipped directly effects both jobs and in turn the financial systems. With less production and less shipping of product we get less jobs related to them, and with less jobs we have more money going out to pay for social services and the public welfare, more money going out means more debt, more debt means less dollar value. This not a great amount of complex math or deductive reasoning, this is common sense.

Oil runs the world, and using that oil creates CO2 emissions. Taxing the emissions or those who create the emissions is in effect a tax on everything. A tax that can only rise as long as it exists. We do need to clean up our act, but taxing life is the wrong way to do it...

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