Carbon Emissions Credits Are Designed to Dampen Fuel Demand

Source Article
Oil Refiners Predict Higher Gas Prices | online.wsj.com (view article)


Implications:
1) Refiners paying for transports share of Carbon output is "De Facto" Emissions tax

2) Higher Carbon Emissions share on Refining, an efficient part of energy supply chain, seems counterproductive

3) Refiners paying price for auto makers lack of progress on efficiency and emissions?

Analysis:

If refiners have to pay for the Carbon output of Transportation, it acts as a "De Facto" emissions tax on prior choices made by the consumer and auto business.

Transportation manufacturers should have to include the projected emissions amount each vehicle will emit over it's lifetime in the initial purchase price; that will give consumers a really clear choice as to why more efficient and cleaner cars are the way to go.

Charging refiners for emissions is like charging farmers for the sewage fees that the people eating the food they produce will eventually use.

The higher carbon emissions share on refining, an efficient part of the energy supply chain, seems like it's more a choice of the best place to "close the barn door after the horses have left" than anything else. The automakers and transport manufacturers should be paying the Carbon Output up front in the sale of the vehicle.

The multiplication of increased fuel prices across all sectors of the economy was clearly seen last year in the fuel price spike. The linkages cause a "ripple effect" of price increases throughout the economy. We saw there is very little elasticity of demand on transport fuels; whether the increase is market driven or government mandated, it still affects all sectors of the economy with higher prices.

There needs to be a direct correlation between the choice of vehicle and the Carbon Output tax, not on usage for a fleet that was built before this was a rule, which is what hitting the refiners does. Capping and eventually reducing carbon emissions is a worthy and necessary goal, the mechanism for getting there needs to be fair.