The Yin and Yang of RGGI

by William Yeatman on May 27, 2011

in Blog, Features

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The American Northeast has attained metaphysical balance on energy rationing, thanks to New Jersey Governor Chris Christie’s (R)  announcement yesterday that he would withdraw the Garden State from the Regional Greenhouse Gas Initiative, a multi-state cap-and-trade scheme. After New Jersey leaves, the remaining nine participants will be: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.

Christie’s unexpected decision serves as the yin to New Hampshire’s yang. In late February, the New Hampshire House of Representatives  passed HB 519, legislation that would withdraw the Granite State from RGGI, by a 246 to 104 vote. At the time, it was widely thought that the Senate would quickly follow suit, as Republicans control the upper chamber. HB 519’s ultimate enactment appeared so certain, in fact, that Governor John Lynch (D) issued a pre-emptive veto. It should have been a futile gesture, because Republicans hold a veto-proof majority in both chambers of the legislature. Then the environmentalist lobby mobilized and frightened many members of the Senate. The bill was delayed. And in early May, the full Senate, where Republicans enjoy a 2 to 1 majority, voted to remain in the the regional energy rationing scheme. New Hampshire Republicans had snatched defeat from the jaws of victory.

Gov. Christie has had a somewhat tortuous history with RGGI. During the press conference yesterday, he went to great lengths to state his belief that mankind is causing dangerous global warming, which is unfortunate. He justified his decision to withdraw from RGGI based on the fact that the regional cap-and-trade scheme was an energy tax that had no impact on the global climate, which is true.

Only a year ago, however, he was a climate skeptic. Back then, he expressed reservations about RGGI, but he nonetheless stayed in the program. The most likely reason that he waited so long to withdraw was because the cap-and-trade revenues were too good to pass up. Under state law (the 2008 Global Warming Solutions Fund Act), he was supposed to spend RGGI revenues, which are generated from quarterly sales of energy rationing coupons, on green energy. But Gov. Christie redirected those funds to deficit reduction.

Environmentalists have promised to litigate, but that looks like a dead end. From what I understand, the authorizing legislation explicitly gives the Governor the authority to join and withdraw from the regional pact. Unless the New Jersey Legislature enacts legislation to keep the state in RGGI, the greens’ hands are tied. Or so it appears to me, a non-lawyer.

Lastly, I’ll note that overall, Gov. Christie’s ideas on energy are awful, as is suggested by the title of yesterday’s address, “New Jersey’s Future Is Green.” The Governor is committed to wasting taxpayer money on expensive, unreliable green energy, and he also announced a moratorium on coal power. Read all about his crummy energy policies here.

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