Regional cap and trade is working - and maligned

October 04, 2010|By Chelsea Conaboy, Inquirer Staff Writer

New Jersey helped mark a milestone in climate-change policy in 2008 with the launch of a 10-state program to control carbon dioxide emissions from power producers.

The Regional Greenhouse Gas Initiative set up a form of "cap and trade" that requires power producers to pay for every ton of greenhouse gas emitted by buying allowances at quarterly auctions. Two years in, experts say, RGGI is working. Sort of.

The complex auction is functioning well - a feat in itself - and has provided $729 million in new revenue to the states, including all of New England, New York, New Jersey, Delaware, and Maryland. (Pennsylvania dabbled in early discussions about the program, but never joined.) Most of the money is earmarked for energy efficiency, renewable energy, and ratepayer assistance.

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But RGGI's designers hoped it would become a model for a national cap-and-trade program. Efforts to create one stalled this year in the Senate.

Conservative Republicans across the country have made cap and trade a campaign issue, saying it threatens jobs by increasing energy prices.

"The future of cap and trade as a policy is very much in doubt," said Anthony Leiserowitz, director of the Yale Project on Climate Change, who studies public opinion.

Cap and trade as a method to control carbon emissions was introduced under the Clinton administration as a market-driven alternative to strict regulation, one that could draw broad support. The first President Bush had ushered in a similar program to curtail acid rain, which proved inexpensive and effective.

Leiserowitz said proponents had not gotten the message out about what the carbon program does.

His office conducted a national poll in January that found 75 percent of the 1,001 people questioned had never heard of cap and trade or knew nothing about it.

About half of the remainder responded negatively: "Cap-and-tax, energy tax, light-switch tax, boondoggle, political corruption, giving money to Wall Street - all the lines of attack that the opposition were using," Leiserowitz said.

The conservative public policy group Americans for Prosperity was host to a protest outside the New York offices of RGGI Inc., the nonprofit that supports the program, during the quarterly auction held last month. And Republicans in some RGGI states have called for a repeal.

Sen. Steven Oroho (R., Sussex) has sponsored a bill to that effect in New Jersey. He said he was worried about electricity prices.

"RGGI makes us less competitive," he said.

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