Between 2006 and 2008, the ten eastern states from Maine to Maryland entered into an innovative compact, signed by the governors of each state -- Republicans and Democrats alike -- now known as the Regional Greenhouse Gas Initiative (RGGI).
Through this compact, these states pledged to work together to create a regional cap-and-trade system to reduce greenhouse gas emissions. The scheme would use the proceeds from the sale of mandatory carbon credit allowances to improve energy efficiency, accelerate the use of renewable energies, assist low-income energy users, and fund a variety of programs that would help soften the impact of climate change.
RGGI was originally thought to be a way to jumpstart a regional climate change program, which would eventually be complemented or replaced by a national cap-and-trade program. But somewhere along the way, the gridlock politics in Washington made it obvious that Congress was incapable of enacting any meaningful legislation to address what many see as the most critical environment issue we have ever faced. It is unlikely that this impasse will be broken any time soon.
Worse, along the way "cap and trade" became a favorite whipping boy of fiscal conservatives -- right up there with "ObamaCare"-- as yet another supposed example of regulatory excess by a government run amok. As a result, it now appears that Gov. Chris Christie -- who repeatedly denies national political aspirations -- may actually be considering having New Jersey withdraw from RGGI.
One of the ironies of this situation is that cap and trade is hardly a radical or left-wing concept. It is actually a tried-and-true economic mechanism to achieve an obvious societal good by harnessing market-based forces in a manner that conservatives ought to be advocating. Its proponents include numerous CEOs of major companies, including some of the largest utilities, as well as economists of all stripes. And it is not likely that the principal major alternative to cap and trade – a broad BTU (energy) tax -- which is strongly preferred by many environmentalists and most liberals, will be enacted in this time of draconian budget cuts.
Federal abdication on this issue makes our participation in RGGI all the more critical. It is now obvious that no one else is going to save us here in New Jersey from the serious economic and ecological impacts associated with global warming.
So before any decision to withdraw from RGGI is made, and we abandon our sister states, as well as our ability to control our own destiny, perhaps a bit of a review of the benefits and costs of RGGI are in order.
The fact of the matter is that New Jersey, as a coastal state, is particularly vulnerable to even the most conservative predictions of sea-level rise, and a wide variety of our principal industries -- from agriculture to tourism -- are especially at risk.
Frankly, we cannot afford to do nothing, regardless of whether climate change is natural phenomenon or caused by people. None of that will matter one whit when it is too late to soften the catastrophic blow that is headed our way. And while the day of reckoning may not be tomorrow, each day we waste or backtrack just means that our children will pay a higher price to deal with this issue.
And RGGI is already working for New Jersey, just as it is for other the other nine states in the compact. The environmental gains are measurable and tangible. According to the Department of Environmental Protection (DEP) and RGGI, our participation in this regional cap-and-trade program has already helped reduce carbon dioxide emissions by more than 84,000 tons per year. This translates into more than 1.7 million tons over the lifetime of the 29.6 megawatts of clean electric generation facilities made possible through grant and loan funds from the Clean Energy Solutions Capital Investment Program, which is fully funded by New Jersey’s receipts from RGGI auction proceeds.
On a local level, RGGI proceeds can also be used to fund the many innovative energy programs that volunteer municipal "green teams" working under the auspices of Sustainable New Jersey. That is about as grassroots as it gets, and is hardly big government telling us how to live our lives.
RGGI has also helped consumers -- both business and residential ratepayers -- to make energy efficiency investments that can reduce their energy bills by 15 percent to 30 percent. And these investments have a ripple effect in our economy, not only providing as much as $3.00 to $4.00 in savings for every dollar invested, but also helping to create new green jobs -- as many as 18,000 full-time jobs in the Northeast, according to the initiative.
These RGGI investments also help create a more favorable, stable business climate that will assist New Jersey in retaining business and attracting new opportunities. And investing RGGI proceeds in clean energy technology helps New Jersey nurture emerging technologies and drive technological advances.
A recent report done for RGGI indicates that the substantial economic benefits of the regional cap-and-trade system will more than offset the minimal impact on the price of electricity. The facts of the economic and environmental benefits of our continued participation in RGGI are clear. RGGI is not just the best game in town, it is the only game in town, and the only hope we have of averting the worst of the affects of climate change. If anyone else has a better idea as to how we could fund any comparable program after we withdraw from RGGI, I’d certainly like to hear it.
This is not at all about national politics or what Congress will or will not do. It is about pragmatic state solutions in a time of very limited options. We need our leaders to stand up and be counted to do the right thing for New Jersey, which is to continue as a member of a remarkable regional compact called RGGI.