March 4, 2021

OLD AND BUSTED: California’s “Road Diet.”

The new hotness? California’s gas station diet: California City Bans New Gas Stations in Latest Climate Change Effort.

The goal of this policy is clear. By banning new gas stations, the City Council wants to combat climate change by reducing carbon emissions from driving gas-powered vehicles.

However, the opposite could actually occur. Why?

Well, the only reason new gas stations would be built in Petaluma is if businesses can observe a strong demand for additional gas stations in the area. Banning them from constructing new stations does not eliminate this demand. So, what could end up happening, ironically, is that more emissions are released as Petaluma residents have to drive farther to existing gas stations than they would have had to otherwise, or if they eventually have to start leaving the area to get gas.

Similarly, this law will artificially restrict the supply of gas in Petaluma—meaning that, as basic economics teaches, the price of gas will likely rise significantly. Higher fuel prices disproportionately hurt poorer citizens and strain household budgets.

Unexpectedly.

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