New Jersey Quits RGGI, Bans Coal Plants

by | May 27, 2011

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New Jersey governor Chris Christie has pulled the state from the Regional Greenhouse Gas Initiative (RGGI), the only mandatory cap-and-trade program in the U.S., while promising to ban new coal-fired plants in the state.

Branding the RGGI a failure, Christie told a press conference yesterday that the state will withdraw from the program “in an orderly fashion” by the end of the year, coinciding with the end of RGGI’s first compliance period.

He said the program’s allowances were never expensive enough to change behavior, and that New Jersey has brought its carbon emissions below its 2020 goal as a result of market forces rather than cap-and-trade. Any benefits from the RGGI tax will also now be miniscule in comparison to those from New Jersey’s incentives for wind, solar and natural gas generation, Christie said.

“RGGI has not changed behavior and it does not reduce emissions,” the governor said. “…RGGI does nothing more than tax electricity, tax our citizens, tax our businesses, with no discernible or measurable impact upon our environment.

“Because states such as Pennsylvania are not RGGI members it’s just possible that by making the cap too stringent, clean New Jersey plants would be forced to close only to be replaced by power from dirty Pennsylvania coal plants,” Christie added. “It doesn’t make any sense environmentally or economically.”

The RGGI currently has ten member states – New Jersey, New York, Maryland, Delaware, Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire and Maine – all of whom have committed to a cap on carbon dioxide emissions. Under the system, power plants must buy allowances that permit them to emit specific amounts of carbon.

Republicans in the state had introduced bills to repeal the state’s participation in the program, the New York Times said.

But backers of the cap-and-trade system say that rather than exiting, New Jersey should have simply lowered the carbon caps, the Times reported. “Pulling out of RGGI is an environmental disaster,” Jeff Tittel, director of the New Jersey Sierra Club, said.

Christie’s criticism over the price of carbon may be addressed by an economic recovery, which would likely push up emissions and with them the price of allowances. “A lot of things can happen that can push emissions back up, so being in a system that caps emissions would ensure your emissions remain low,” Emilie Mazzacurati, a market analyst at Thomson Reuters Point Carbon, told the Times.

According to the newspaper, analysts are predicting that New Jersey’s withdrawal will only have a limited impact. A statement from the nine remaining RGGI states said, “With each state exercising its independent authority to achieve low-cost greenhouse gas emissions reductions, the RGGI market-based program has widespread support across the region and will continue.”

But some in Delaware and New Hampshire have been campaigning for those states to exit the program.

And Mazzacurati noted that the nine remaining states will need to provide guidance to explain how they will deal with power plants that currently hold allowances from New Jersey.

In his announcement yesterday, Christie also said that New Jersey will enact an immediate ban on new coal-fired power plants. “From this day forward any plans that anyone has regarding any type of coal-based generation of energy in New Jersey is over,” Christie said.

He affirmed New Jersey’s commitment, through its renewable portfolio standard, to derive 22.5 percent of electricity from renewable sources by 2021. And he announced the creation of a a State Energy Savings Initiative Oversight Committee, to design a framework to improve energy efficiency at state-owned buildings.

Christie has been seen as a possible Republican candidate for the presidency in 2012, though he insists that he will not run.

Last year he expressed doubts about whether people are contributing to global warming, the Times said, but on Thursday he revised that position, noting that over 90 percent of climate scientists believe global warming to have anthropogenic causes. “We know that we are at least a part of the problem,” Christie said.

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