Transportation's Role in Reducing U.S. Greenhouse Gas Emissions ...

Transportation's Role in Reducing U.S. Greenhouse Gas Emissions: Volume 1
gradually reduce emissions to 17 percent below 2005 levels by 2020, and 83
percent below 2005 levels by 2050.
An allowance price of $15 per ton translates into an increase in the price of
gasoline of $0.13 per gallon, based on its carbon content. 128 An allowance price of
$30 implies an increase in gasoline prices of $0.26 per gallon. Price increases of
other transportation fuels would rise similarly in proportion to their carbon
content, as shown in Table 4.1.
128 The price impacts shown are only due to the combustion of fuel. Since upstream and
refining emissions will be included under cap and trade, the cost of these emissions will
be reflected in the price seen by the consumer to some degree. The estimate also does
not include general equilibrium effects, e.g., the dynamic effects on fuel prices from
lowered demand for fuel as a result of the carbon price.
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