Governor Chris Christie
You may not know this, but “Cap and Trade” isn’t just a buzz-phrase for something many environmentalists would like to see the U.S. adopt for regulation of greenhouse gases–it’s been a reality for 10 northeastern states since 2009. With the announcement of New Jersey Governor Chris Christie’s plan to withdraw from the Regional Greenhouse Gas Initiative (RGGI) this year, the hot-button issue of Cap and Trade has again come to the surface of environmental news sphere. Cap and Trade, the market-based mechanism that many call for to help steer our energy production from fossil fuels to renewables, has been employed under a cooperative agreement called RGGI (“reggie”). RGGI is a joint venture by the New England states along with New York, New Jersey, Delaware, and Maryland, to limit emissions from electricity plants and collect revenues for member states through auctions and sales of CO2 emission allowances. These revenues are intended to be re-invested by the states for things like efficiency improvements, renewable energy installations, and consumer financing, although NY, NJ, and NH have used a portion of their proceeds toward their state debts. Overall, about 80 percent of the $860 million collected so far have been strategically invested since the first auctions were held in ’08.
Here in Massachusetts, about 80% of our $123 million windfall has been put toward utility-run efficiency improvement programs, while around 20% have gone to state-run initiatives including the multi-faceted Green Communities program, which was featured here on Warm Home Cool Planet back in February. Other states have created “Green Jobs” programs, as in New York. According to RGGI’s own assessment report released this February, investments in efficiency and renewables have created appreciable direct and indirect economic benefits, along with expected reductions in greenhouse gas emissions. As a minor caveat, there have not been, to my knowledge, any independent studies yet evaluating RGGI’s effect on either the economy or emissions.
So, in light of what seems like progress for RGGI member states, Christie’s decision to end his state’s participation by the year’s end has received plenty of criticism. Governor Dan Malloy of Connecticut was among those disappointed, stating “Governor Christie’s decision…reflects the kind of policymaking that must change if we are to move forward as a nation.” Christie’s explanation for the decision does, on the face of it, take a pro-environmental stance, as he claims New Jersey will be able to achieve emission reductions progress and job creation through its own forthcoming policies, including preventing new coal-fired plants from being built. The decision to withdraw isn’t quite final, however, as environmentalists plan to mount a legal challenge. Whatever ends up happening with New Jersey’s RGGI saga, don’t expect regional Cap and Trade arrangements to go by the wayside, as Politico’s Darren Sammuelsohn explains. And if the EPA sets nation-wide emissions caps for electricity plants, RGGI just might serve as a template for other regions to form their own carbon markets.
