Starting January first, fuel distributors will be required to reduce greenhouse gases or purchase pollution credits for every ton of carbon dioxide emitted.
Republicans say the resulting cost would be equal to a gas tax increase up to 76-cents per gallon.
Republicans have introduced legislation to stop it from happening.
Assemblymember Jim Patterson, the author of the bill, says consumers are unprepared for an increase at the gas pump.
"The volatility of cap and trade is such that it could be a significant amount of additional cost on fuels. It is the uncertainty that is kind of scary," says Patterson.
“There isn’t a week that goes by that I don’t get several emails or letters saying how can we stop this tax from going into effect," says Assemblymember Melissa Melendez. "I would bet that every legislator in this building is getting the same thing.”
But Dave Clegern with the California Air Resources Board says fuel distributors do have a choice.
“They do incur some costs through cap and trade and how they pass that through is up to them," says Clegern. "So basically there is no tax it’s a potential cost of doing business depending on how they decide to deal with it.”
A similar proposal by Democrats to delay the requirement last session went nowhere.