Cap-and-trade policies may harm California shippers

California’s transportation and logistics industry may be at risk if state government “green” policies are enacted

By ·

California’s transportation and logistics industry may be at risk if state government “green” policies are enacted.

The California Trucking Association (CTA) today released a study that shows significant job losses directly attributable to California Air Resources Board’s (CARB) fuel policies.

Researchers said that the goods movement and agriculture sectors will be especially hard hit if the policies are allowed to go into effect as currently designed.

The report titled “The Impact of the Low Carbon Fuel Standard and Cap-and-Trade Programs on California Retail Diesel Prices” demonstrates the effect that CARB’s regulatory actions will have on the state’s retail diesel future leading to a $6.69 per gallon price tag.

The study, prepared by Stonebridge Associates, Inc., finds that by 2020 CARB’s Low Carbon Fuel Standard (LCFS) in combination with the questionable AB 32 Cap-and-Trade Program could increase the price of diesel fuel by $2.22 per gallon. That would represent more than a 50 percent increase in the price of diesel fuel and a shocking $6.69 per gallon at the retail pump. The average price difference between California and neighboring states would be $2.33 per gallon when accounting for taxes.

According to the study, between the year 2015 and 2020, these higher “California-only” diesel fuel costs will cause a loss of nearly 617,000 jobs in the containerized import sector, $68.5 billion in lost state domestic product, $21.7 billion in lost income and $5.3 billion in lost state and local taxes

California’s transportation and logistics industry is responsible for almost 14 percent of the state’s economy and is an important source of reliable good paying jobs in this state. However the study states that a “California-only” diesel price caused by CARB’s poor program design will put California’s transportation sector at a significant competitive disadvantage.

“CTA is supportive of the production and use of alternative fuels, but the cost gap between CARB’s Low Carbon Fuel Standard and the diesel fuel that the other forty-nine states will continue to use is unacceptable,” said Scott Blevins, President of Mountain Valley Express and 2012 CTA President. “This is a serious setback for any business dependent on diesel fuel for its operations.

This news comes at a time when some economists are forecasting an economic rebound in California.

“The Golden State saw modest employment growth from February to March, adding back 18,200 jobs (seasonally adjusted) in the month-over-month period,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.

“This is the 8th consecutive month the state has seen gains in total nonfarm employment.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Global · Trade · Trucking · All Topics
Latest Whitepaper
The Internet of Things and the Modern Supply Chain
Learn today how the internet of things is transforming supply chain operations.
Download Today!
From the February 2017 Issue
As the new administration sends waves of uncertainly through the global trade community, this could be the best time ever for shippers to build an investment case for GTM. Here are five trends you need to watch if you’re about to put these savvy systems to work
Carrier Consolidation Keeps Shippers Guessing
Getting Value from the Cloud
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Advance your career with the fastest growing logistics certification – APICS CLTD
During this webcast presenters will give an overview of APICS and the new Certified in Logistics, Transportation and Distribution (CLTD) designation. Learn how the CLTD program can help you stay on top of current trends and advance your career.
Register Today!
EDITORS' PICKS
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...

Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...