Here’s how this unprecedented restriction will backfire.
As the debate over climate policy continues to heat up, one California city just took an unprecedented step: Banning all new gas stations.
As reported by the San Francisco Chronicle, the city of Petaluma will ban the construction, expansion, rebuilding, and relocating of gas stations after a unanimous vote by the City Council. It does so in hopes of forcibly speeding up the transition to electric cars with the goal of reaching “carbon neutrality,” net-zero carbon emissions, by 2030.
Petaluma has become what officials said is the first city in the country to permanently ban the construction of new gas stations. https://t.co/tbdBBYhStQ— San Francisco Chronicle (@sfchronicle) March 2, 2021
“We need to do our part to help mitigate and adapt to our changing weather patterns that exist because of all the carbon we put in the atmosphere,” Councilwoman D’lynda Fischer said. “I hope other cities will follow suit and if they have existing fossil fuel stations that satisfy the needs of their community, they too will decide that they don’t need any more.”
“Prohibiting new gas stations serves the public interest by preventing new sources of pollution that adversely impact environmental and human health," reads the legislation.
Why This Regulation Won’t Accomplish Its Goal—And Could Actually INCREASE Emissions
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.
But from the City Council’s perspective, this might be exactly what they want; hoping higher gas prices will prompt more people to switch to electric cars. However, the higher prices could inadvertently just prompt many people to drive out of town to purchase gas, where prices will remain significantly lower. This seems like a much more realistic and financially feasible adaptation for most people than to purchase entirely new, expensive electric cars.
Moreover, even to the extent that such a ban would encourage people to switch to electric vehicles, it’s unclear this would necessarily mean lower carbon emissions. The extent to which electric vehicles reduce carbon emissions depends on what electricity source is used to power the car. If it’s fossil fuel based—nearly 70 percent of California’s power still comes from non-“renewable” sources—then electric vehicles must still significantly contribute to carbon emissions.
That’s right: All the costs and inconvenience imposed on city residents could be for nothing.
Unintended Consequences Always Plague Big Government Interventions
Unfortunately, this kind of policy dysfunction isn’t exclusive to environmental issues or Petaluma, California. Whenever government bureaucrats huddle together in a City Hall, State Capitol, or even Congress, and try to make sweeping rules for millions of people, drastic unintended consequences will inevitably follow.
“Every human action has both intended and unintended consequences,” economist Antony Davies and political scientist James Harrigan explained for FEE.org. “Human beings react to every rule, regulation, and order governments impose, and their reactions result in outcomes that can be quite different than the outcomes lawmakers intended.”
They dubbed this the “Cobra Effect.”
Davies and Harrigan told the comical yet revealing tale of how an Indian city placed a bounty on cobras to try and solve their infestation problem, yet achieved the opposite result. Why?
At first, more people hunted cobras to get the bounty, and the cobra population decreased. Yet then individuals started breeding and raising cobras at home in order to get the bounty again. When the government cancelled the bounty because the population had seemingly declined, citizens released all the cobras they had been raising in their homes into the wild.
The end result was a worse infestation of cobras than the city had to begin with. The farcical outcome brings to mind the words of economist Robert P. Murphy, who wrote for FEE that “It’s not enough... to endorse legislation that has a nice title and promises to do something good… people need to think through the full consequences of a policy, because often it will lead to a cure worse than the disease.”
This timeless principle remains true whether we’re talking about cobras in India or gas stations in California. It’s just a shame Petaluma’s City Council will have to learn this lesson the hard way—while residents pay the price.