WolfeNotes.com

Will NJ environmentalists and Democrats seek real RGGI reform?

We have written here numerous times about serious flaws in the Northeast States’ “Regional Greenhouse Gas Initiative” (RGGI), particularly with respect to the so called “emissions cap” which in fact is not a cap at all but a formula to allow dramtic increases in emissions.

We estimated that contrary to the statements that RGGI would reduce emissions, that emissions actually would rise by up to 30% under RGGI, see:

• Green House gas emissions continue to rise – NJ’s control efforts a sham
• Christie RGGI Withdrawal Plan Slammed at Trenton Hearing
• Christie Bowing to Koch Brothers on RGGI
• Some Facts on the Costs of RGGI and Solar

Telling that truth put us in the extremely awkward position of agreeing with portions of Governor Christie’s rationale for terminating RGGI in NJ (regular readers of this site know we are no friend of Christie!).

Telling that truth and challenging our colleagues to seek cap reductions have not made us popular here in NJ environmental circles, where tremendous resources have been invested in supporting the failed RGGI program and in urging Democrats to over-ride Gov. Christie’s veto of legislation seeking to keep NJ in the RGGI program.

But, it turns out we were wrong – RGGI “cap” needs to be reduced not by 30%, but by 45%!

So, we feel vindicated by this Report – written by RGGI creators and supporters – about the need for ratcheting down the emissions cap.

So, we repeat a previous key question we asked: Will NJ environmentalists and Democrats seek real RGGI reform?

POLICY: RGGI cap needs to be strengthened by 44% to prevent emissions rise — study

Christa Marshall, E&E reporter

Published: Tuesday, December 11, 2012

Carbon dioxide emissions will rise in the Northeast unless officials dramatically change a regional carbon trading program, a new report from an environmental group warns.

The report from Environment Northeast finds that the existing carbon cap of the Regional Greenhouse Gas Initiative (RGGI) should be strengthened by at least 44 percent — or from 165 million tons to 91 million tons of allowed regional CO2 annual emissions — to prevent greenhouse gas output from rising from current levels in the next decade.

That rise could occur because emissions currently are 45 percent below the trading program’s cap, meaning that utilities can increase their CO2 output and still meet the initiative’s emission restrictions, said Peter Shattuck, a director at Environment Northeast. Only a strengthening of the carbon cap will change utility behavior enough to prevent an emissions rise, he said.

“Emissions from power plants in the RGGI program fell to their lowest level on record through the first three quarters of 2012,” the report states about the initiative.

The historically low annual emissions in 2012 — 91 million tons of CO2 — came from a combination of factors, including an ongoing shift from natural gas generation in the region and energy efficiency investments, Environment Northeast said.

The cap-and-trade initiative, which limits utility CO2 emissions in nine states from Maine to Maryland, is considering the possibility of tightening the program’s carbon cap starting in 2014. It recently modeled four options in that regard, including a new 91-million-ton annual emissions limit.

The initiative and state representatives are expected to make a decision on any changed emission limits and other possible tweaks to the program’s offset rules by the end of the year.

That 91-million-ton plan, though, is the only option of the four currently on the table that would be strict enough to keep emissions from climbing back up from 2012 levels, Shattuck said. The other options modeled by RGGI would change the cap to 106 million tons of CO2, 101 million tons or 97 million tons.

Economic growth will raise emissions

 

The initiative’s own modeling shows a general rise in emissions in the years ahead, because of economic growth, the end of funding for some New York efficiency programs and the likely closing of a nuclear power plant in the region, Shattuck said. He also released a letter from Exelon, Calpine, Long Island Power Authority and several groups supporting the idea of capping emissions at 2012 levels.

The initiative did not respond to a request for comment, but it faces pressure on both sides of the issue.

The group Americans for Prosperity, a group co-founded by oil billionaire David Koch, has led many public events against the program and targeted state candidates supporting it.

Earlier this year, New Jersey Gov. Chris Christie (R) vetoed another bill from his state’s Legislature urging his state to return to the program. Christie pulled New Jersey out of RGGI in 2011 (ClimateWire, May 27, 2011).

“RGGI did nothing more than impose a tax on electricity to be borne by New Jersey’s overburdened taxpayers and ratepayers who already pay some of the highest energy costs in the country,” Christie said in his official veto message this year.

Supporters of the program say that the initiative’s funding of energy efficiency programs via carbon auctions counters any upward push on electricity prices.

In its report yesterday, Environment Northeast analyzed electricity data from the Department of Energy and concluded that electricity prices across the region have decreased by 10 percent since the initiative’s launch four years ago.