The state yesterday cleared a path to rejoin a regional initiative on reducing climate-altering pollution from power plants, a major promise by Phil Murphy during his gubernatorial campaign.
In adopting a pair of new rules, the state Department of Environmental Protection essentially reverses a decision in 2012 by former Gov. Chris Christie to pull out of the Regional Greenhouse Gas Initiative, a decision that cost New Jersey about $300 million in clean-energy funding in the interim.
The action marks a step toward further curbing power plant pollution, and yet needs to be bolstered by a more comprehensive climate change program, particularly focusing on fossil fuel emissions from the transportation and building sectors, according to clean-energy advocates.
Others question just how effective rejoining the nine-state RGGI initiative will prove, if at all. They argue the caps on carbon pollution are set at a level so that cheaper and dirtier power plants out of state will run more frequently than cleaner and more expensive generating facilities in New Jersey, according to analysis by energy consultants.
Whatever emissions are reduced by rejoining RGGI will be more than offset by increased pollution in states not part of RGGI, maintain skeptics. More about that later.
For Murphy, the adoption of the rules fulfills a campaign pledge and an early executive order issued after he took office, both aimed at guiding New Jersey to reclaiming a leadership position in the fight against climate change.
“The reckless decision to pull out of the Regional Greenhouse Gas Initiative in 2012 cost the state millions of dollars in revenue that could have been used to put toward initiatives to reduce greenhouse gas emissions and improve the health of our residents,’’ Murphy said in a statement from his press office.
The multi-state initiative is a cap-and-trade program placing a tax on carbon emissions, which is passed on to utility customers. The DEP projects the tax will cost the average residential homeowner $9 more a year on their electricity bill. The cost for large energy users will be much higher, adding hundreds of millions of dollars to their annual bills, according to testimony from Dennis Hart, executive director of the Chemistry Industry Council.
The new rules dictate the framework for how state agencies will divvy up revenue (projected by the agency to reach about $100 million) the state receives from the carbon tax to fund a range of clean-energy programs, including environmental justice programs. Critics argued the rules, however, do not address requests by environmental justice advocates to propose mandatory emission reductions in those communities; the mandated reductions would have to be met by the power suppliers.
The other rule establishes the initial carbon-dioxide cap for the state’s electricity generation sector at 18 million tons in 2020.
That is far less than what many argued the cap should be set at, with environmental groups initially. Anything less, they suggested, would result in less emission reductions and fewer dollars to spend on clean energy programs.
Bruce Ho, a senior advocate for the Natural Resources Defense Council, who came around to accepting the 18 million tons cap, said, “Ultimately, it was reasonable based on the data we were seeing in the energy sector.’’
Ho noted that the DEP committed to work with other states to evaluate and strengthen the RGGI program, an indication that the pollution cap might be tightened in the future. In any event, the governor’s office said the carbon dioxide emissions will decline by 30 percent through 2030.
Others, however, fear the state’s new rules will end up increasing greenhouse-gas emissions by favoring out-of-state power plants not subject to the carbon tax over cleaner and more expensive New Jersey units. The problem has been called leakage, an issue that must be addressed, according to energy experts and clean-energy advocates.
Even without participating in RGGI, New Jersey has one of the cleanest — from a carbon pollution perspective — power fleets in the region, primarily because nearly one-third of its electricity comes from zero emission nuclear units and because virtually all its coal-fired power plants have been closed.
“Without a leakage mitigation plan, today’s action will increase carbon dioxide emissions by 30 million tons from 2020 through 2030, which equates to almost two years of New Jersey’s annual electricity generation emissions,’’ said Adam Kaufman, executive director of the Independent Energy Producers of New Jersey.
“While on the surface, it looks positive that New Jersey emissions are going down as a result of RGGI, emissions are simply occurring elsewhere, and in greater volume, throughout the region,’’ he said.
In response to such criticism, the DEP noted another regulatory agency, the New Jersey Board of Public Utilities, has committed to starting a proceeding to address problems posed by “leakage.’’
Nevertheless, clean-energy advocates see in RGGI a template for curbing other climate-warming emissions in other sectors, particularly the transportation sector. Late last year, the Murphy administration joined a regional initiative to reduce carbon pollution from transportation sources.
“The Transportation Climate Alliance is finally starting to address emissions from cars and trucks across state lines,’’ noted Doug O’Malley, director of Environment New Jersey, citing efforts to electrify the sector. “We are going to need to address those emissions more rapidly.’’