New Jersey Gov. Chris Christie says climate change is real, but nevertheless he is pulling his state out of a regional carbon cap and trade system because he believes it is a failed experiment.
Christie said he expects New Jersey to withdraw from the Regional Greenhouse Gas Initiative by the end of this year, a decision with major ramifications for Massachusetts and the eight other northeastern states participating in the compact, the only one of its kind in the nation.
Christie is a Republican who is gaining national attention for his provocative stances on issues, and his view on the carbon cap and trade system did not disappoint. His position is a mixture of green energy boosterism and Republican orthodoxy on so-called carbon taxes.
On climate change, Christie said he had spent the past few months reading up on the issue and talking to experts. He said he came to the conclusion that it’s real. “When you have 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,” he said.
But Christie said the regional cap and trade system is not working. The system, a free-market approach to cleaning up the environment, was launched in 2009 and requires electricity generators in the region to buy allowances for each ton of carbon they emit. The sluggish economy has dampened demand for electricity, so the regional cap of 188 million tons of CO2 hasn’t been too painful yet, and prices for allowances have hovered in the $2 range. Christie said the prices would need to rise to $20 to $30 a ton to force power generators to make changes in the way they generate electricity.
Sounding like a green energy advocate, Christie said New Jersey has already made dramatic strides in reducing CO2 emissions by shifting away from coal and toward natural gas and providing incentives for the generation of wind and solar power. But he also said cap and trade drives up the price of electricity, since the cost of the carbon allowances are typically passed on to customers in the form of higher electricity prices.
“RGGI does nothing more than tax electricity, tax our citizens, tax our businesses, with no discernable or measurable impact upon our environment,” Christie said. “Because states such as Pennsylvania are not RGGI members, it’s just possible that by making the cap too stringent clean New Jersey plants would be forced to close only to be replaced by power from dirty Pennsylvania coal plants. It doesn’t make any sense environmentally or economically and the continuation of this tax makes no sense.”
Supporters of RGGI in Massachusetts acknowledge the sale of carbon allowances has had limited impact on electricity production so far, but they note that most of the $789 million collected through the sale of the allowances has been plowed into energy efficiency projects across the 10-state region. The energy efficiency projects have helped reduce demand for electricity, which in turn has helped reduce greenhouse gas emissions and put downward pressure on prices.
A statement issued by the Regional Greenhouse Gas Initiative in New York said the program would go on. Gov. Deval Patrick ushered Massachusetts into the regional compact in 2007 after his predecessor, Mitt Romney, balked. Patrick issued a statement saying climate change is a serious issue requiring action at the regional, national, and international levels. “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,” he said.
