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California gas prices could rise if the state's cap-and-trade program is extended, legislative analyst says

 (Elise Amendola / Associated Press)
(Elise Amendola / Associated Press)

As California lawmakers debate the future of the state's battle against global warming, there's one politically sensitive issue they'll have to consider: gas prices.

Gov. Jerry Brown wants lawmakers to extend the cap-and-trade program, which requires companies to buy permits to release greenhouse gas emissions. Right now, the price of permits sold in state-run auctions is less than $14.

However, if the program is extended and the state pushes forward with its tougher climate goals, the price of allowances could rise to $50 over several years, according to Ross Brown from the nonpartisan Legislative Analyst's Office.

If that happens, drivers could see the price per gallon of gasoline increase by 45 cents. A separate policy, known as the low-carbon fuel standard, is also expected to increase gas prices. 

The estimates were provided during a legislative hearing on Wednesday in response to a question from Assemblyman Vince Fong, a Republican from Bakersfield. 

Brown's administration said extending cap and trade is "necessary to meet the statewide climate goals” and reduce “significant volatility” in revenue generated from the sale of permits. The governor is counting on the money to help finance the bullet train from Los Angeles to San Francisco.

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