Oil companies aren’t exactly thrilled when it comes to the proposed cap-and-trade system of selling carbon credits the federal government has proposed, claiming that it will just cost way, way too much money to buy the credits, demand for gas would go down, and business would be ruined. But wait, you might say. Why would demand for gas go down? Well, because the oil companies would simply pass the price of the carbon credits on to you, the consumer. To the tune of 13 cents a gallon.

A new study by Point Carbon, an independent energy consulting group, dispelled the myth, however, that demand for gasoline would decrease in conjunction with any price decreases. So while a carbon market would, ultimately, cost oil companies money, they can be confident they can offload much of the expense. From Reuters:

If carbon prices average about $15 a tonne, about half the level at which price controls could start to kick in, oil companies would would boost gasoline prices about 5 percent from current levels, or 13 cents a gallon, the report said. Exxon Mobil Corp, for example, could face about $5.9 billion a year in carbon permit prices, but would be able to recoup all but about $277 million of that, the report said.

Power generators might not be able to recoup quite as much of their investment, as their prices are regulated by states. However, those that have already invested in a diversity of energy sources, including nuclear and alternative energy, shouldn’t have much of a problem (so Southern Energy Company is a loser, while Exelon and Pacific Gas & Electric (two of the companies that have recently left the United States Chamber of Commerce) a winner in this scenario).

So, let’s say you’re already paying $2.60 a gallon for gas. Is the reduction in air pollution and global warming worth paying $2.73? I say absolutely it is, but then again, I don’t have a car anymore, and last time I did I was paying almost $4 a gallon. But keep in mind in Europe, they pay about four euros per liter, which is really, really expensive. So I’m saying an extra 13 cents a gallon isn’t something we should sweat. Thoughts?

photo credit: futureatlas’ flickr photostream/Creative Commons