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 Patrick Burnson, Executive Editor
May 03, 2012 - LM Editorial

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

image
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 .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Supply chain security provider Freightwatch International has released its semi-annual report on cargo theft in the Asia Pacific region for the first half of 2014, which contains some heartening news for U.S. shippers reliant on trucking, warehousing and retail.

FedEx Ground, a subsidiary of FedEx Corporation, reports today that a decision by a three-judge panel of the United States Court of Appeals for the Ninth Circuit reversed previous rulings by the District Court for the Northern District of Indiana in three class action cases involving mostly former independent contractors for FedEx Ground

More talking remains before the deal is done

The transpacific U.S.-flag carrier has been ranked number one in the ocean carrier category for Logistics Management magazine's Quest for Quality award

This year, the Containerization & Intermodal Institute (CII) will be staging the “Connie” Awards dinner in conjunction with IANA’s Intermodal EXPO in Long Beach

Article Topics

News · Trucking · Global · Trade · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA