Christie withdraws N.J. from regional cap-and-trade program

Posted: May 27, 2011

TRENTON - Gov. Christie said Thursday that New Jersey would withdraw from the nation's first regional cap-and-trade program for greenhouse gases - an announcement that left environmentalists fuming and political observers speculating over the whether the governor was appealing to the national conservative base.

The governor acknowledged there was "undeniable data" that levels of carbon dioxide and other greenhouse gases were increasing and affecting the climate.

"When you have over 90 percent of the world's scientists who have studied this stating that climate change is occurring and that humans play a contributing role, it's time to defer to the experts. . . . We know enough to know that we are at least a part of the problem," he said.

But he rejected the Regional Greenhouse Gas Initiative - an agreement among New Jersey and nine other Northeast states - as an effective solution.

The program aims to reduce carbon emissions, which are linked to global warming, by 10 percent in participating states by 2018. Under a system known as cap-and-trade, fossil-fuel-burning power plants essentially pay a price for polluting by buying allowances for the carbon they emit. The proceeds are invested in renewable energy and energy efficiency.

The price of allowances per ton has fallen from $3.07 at the first auction three years ago to $1.89 at the last event in March. Christie said the allowances "were never expensive enough to change behavior as they were intended to and ultimately fuel different choices."

"The whole system is not working as it was intended to work," he said. "It's a failure."

A number of the state's environmentalists disagreed.

Christie should be working with other states to strengthen the program instead of giving up, said Matt Elliott, a global-warming and clean-energy advocate for Environment New Jersey.

"It was always understood that the states agreed, 'Let's try this for a couple years; let's get it working, and we'll review it and make it stronger.' . . . Christie is just throwing up his hands and quitting, which is entirely the wrong approach," Elliott said.

Some political observers viewed the GOP governor's move as an effort to appeal to a national conservative agenda, similar to his controversial fiscal decisions to halt a commuter tunnel to New York and eliminate state funding for family planning centers.

"He's making sure that his stance on cap-and-trade is consistent with the conservative wing of the Republican Party because this really is a key issue," said Brigid Harrison, a political science professor at Montclair State University.

The Regional Greenhouse Gas Initiative has delivered $789.3 million in revenue to the participating states from Maine to Maryland through December, and $102.2 million to New Jersey since the state joined in 2008 during the administration of former Gov. Jon S. Corzine.

"Those investments are saving energy consumers money, making businesses more competitive, and creating jobs in our state economies," the other participating states said in a statement issued by Emilee Pierce, a spokeswoman for RGGI Inc.

The organization said in a statement that it would continue with an auction planned for June 8.

Participating states include New Hampshire, Vermont, Connecticut, Delaware, New York, Massachusetts, and Rhode Island.

The Garden State's investments include more than $29 million for 12 large-scale commercial and industrial renewable-energy and energy-efficiency projects. A report from RGGI said the projects were expected to generate enough electricity annually to power more than 19,600 typical New Jersey households each year.

Environment New Jersey estimates that households in the state pay $3.24 on average toward RGGI on their utility bills.

Last year, the state diverted $65 million from its RGGI fund to help plug the $11 billion state budget deficit. Other participants raided their greenhouse-gas funds as well.

Controversy over the program has been mounting. The New Hampshire Senate voted this month to maintain the state's involvement after the House voted to withdraw. A bill to pull Delaware from the agreement also was recently voted down.

On Thursday, the governors of Vermont and Massachusetts pledged their support of RGGI.

"It is disappointing that New Jersey has decided not to be part of the solution, but we will continue to work with the RGGI states to tackle this critical issue," Massachusetts Gov. Deval Patrick said in a statement.

Christie cited a report released by the New Jersey Department of Environmental Protection that said the state's carbon emissions already had fallen below the state limit set for 2020, a trend that the governor attributed to increased consumption of natural gas and reduced use of coal.

He also said the state had created a number of incentives for wind, solar, and natural gas generation, making any benefits from RGGI "minuscule."

"We're not going to participate anymore in something that doesn't work, but that is not an abandonment of our commitment to continue to work toward more renewable energy," Christie said.

The withdrawal will make New Jersey more competitive with Pennsylvania, which chose not participate in the cap-and-trade agreement, he said.

"This program has put New Jersey on an unequal footing as compared to our neighbors, and I applaud Gov. Christie's newest commitment to improving our business and jobs climate in New Jersey," Sen. Diane Allen (R., Burlington) said in a statement.

Other environmental advocates said the withdrawal from RGGI would cost the state jobs and undermine renewable-energy causes.

"He's destroying the environment, and in New Jersey we have a responsibility for New Jerseyans to have clean air," said Assemblyman Upendra Chivukula (D., Somerset), who has sponsored laws to curb greenhouse gas emissions.

Michael Drewniak, a spokesman for the governor, said in an e-mail that New Jersey's RGGI fund would have $6.3 million by the end of the fiscal year. And $18 million is expected to come in from recent auctions. There is no provision yet in the fiscal 2012 budget allowing for another transfer, he said.


Contact staff writer Maya Rao at 609-989-8990 or mrao@phillynews.com.

 

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