MIDLAND, Mich. — Legislation that would create a clean fuel standard in Michigan would cost the typical household $350 per year, according to a new study by the Mackinac Center for Public Policy. “Low Carbon, High Costs: How a Clean Fuel Standard Would Increase Gas Prices and Living Costs in Michigan” examines the potential consequences of enacting Senate Bill 275.

The legislation, modeled after similar laws in California, Oregon and Washington, is touted as a way to reduce carbon emissions. Senate Bill 275 would impose one of the country's most aggressive standards by requiring a 25% reduction in the carbon emissions of fuels by 2035.

Clean fuel standards are complex cap-and-trade systems run by the government that do little to impact the environment. They mandate state bureaucrats estimate the “carbon intensity” of transportation fuels produced and imported into Michigan. Companies that supply Michigan with fuel would need to meet this standard by either producing less carbon-intense fuels or buying credits handed out to companies that do. The standard must become progressively stricter, requiring fuel producers to continually lower the carbon intensity of their products or purchase increasingly more credits.

The study estimates the impact of the state’s proposed clean fuel standard on fuel prices and household budgets. Under the proposed standard, gasoline prices could rise by 34 cents per gallon and diesel by 39 cents per gallon by 2035. The report also estimates the environmental impact. Senate Bill 275 would only reduce global temperatures by 0.0003°C by 2100, based on a climate model used by the Obama administration.

“These low-carbon fuel standards are not only a costly experiment but one that would yield no meaningful environmental benefits,” Jason Hayes, director of energy and environmental policy at the Mackinac Center. “Michigan families are already struggling with high inflation, and this policy will make it harder for them to afford groceries, health care, energy and other necessities.”

No additional revenue from rising gas prices will be directed toward fixing Michigan’s crumbling infrastructure. Instead, the primary beneficiaries of a clean fuel standard would be companies that produce and sell so-called clean fuels, including the state’s monopoly utility companies.

“This legislation will drive up fuel prices and raise costs on every Michigan driver,” said Isaac Orr, one of the report’s co-authors and vice president of research at Always On Energy Research. “The reality is that it will have a minimal impact on emissions but a significant impact on household budgets. Michigan families deserve policies that prioritize both affordability and sustainability.”

Read the full report here.