Sometimes the good people waging the pro-environment side of a policy debate need to offer average folks some easy-to-understand practical options for how they can adapt to complicated regulations in painless ways. Below is one example.
As I discussed in my previous post, California's cap and trade program is under frontal attack by a group of centrist Democrats, led by Ass. Henry Perea, D-Fresno, in alliance with the oil industry and Republican-oriented business groups. Perea's bill, AB 69, would delay the scheduled Jan. 1 inclusion of transportation fuels in the state's cap and trade program under the alarmist justification that it would force gasoline prices to soar by 16 to 76 cents per gallon.
Severin Borenstein, a professor at the Haas School of Business at UC Berkeley, has just written a very informative blog post that adds quite a bit to the debate -- although not only because of his main points, to me at least.
He analyzes the conflicting claims over the price rises to be expected, and concludes that gasoline prices at the pump will increase by 9-10 cents per gallon after Jan. 1 because of the new rule. That's at the low end of most expert estimates -- for example, see the Aug. 4 letter to Perea from the state Legislative Analyst’s Office. It's also about the same as the usual week-to-week fluctuation of gas prices.
But Borenstein provides some more information that is useful in a practical way and that I haven't seen elsewhere:
(...) let’s consider that price increase in context. A 10 cent increase will be about 2.5%. Here are some things you could do to fully offset that additional cost:
- Drive 70 mph instead of 72 mph on the freeway. That difference would improve your fuel economy by about 2.5%. The savings are much larger if you actually drive the speed limit.
- Buy a car that gets 31 MPG instead of 30 MPG. That will get you more than a 3% savings in fuel cost, more than offsetting the price increase.
- Keep your tires properly inflated. The Department of Energy estimates that underinflated tires waste about 0.3% of gasoline for every 1 psi drop in pressure.
Pretty easy, right? That's context we can all use.