US: Court finds New Jersey violated law by leaving RGGI

The state of New Jersey has 60 days to repeal or amend its carbon-reduction regulations, after a court ruled on Tuesday that Governor Chris Christie could not unilaterally pull the state from the Regional Greenhouse Gas Initiative (RGGI).

New Jersey was one of 10 Northeastern states involved in RGGI, the US’ first carbon market. Christie pulled the state from the programme in 2011, stating the cap-and-trade programme was ineffective and raised costs for energy utility customers.

However, the Superior Court of New Jersey Appellate Division has now ruled that Christie could not pull the state from the programme because the exit failed to follow the Administrative Procedure Act, or a set of rules to amend or repeal state laws.

The suit was filed by the Natural Resource Defense Council and Environment New Jersey, two environmental groups, in 2012.

The court decision forces New Jersey officials to undergo the process stipulated by the Act now.

A New Jersey legislative committee will debate a proposed bill by Democrat Senator Stephen Sweeney on Thursday that would require the state to rejoin the carbon scheme ( see EDCM 25 March 2014 ).

The bill is unlikely to be signed into law by Christie, who has vetoed two similar bills by Democratic lawmakers.

Since New Jersey pulled out of the programme, RGGI officials have reduced the overall cap by 45%, causing allowance prices to rise from $3.00 tonne of CO2 equivalent (tCO2e) in December 2013 to the mid-$4.00/tCO2e range in March 2014.

Market participants said the revisions likely would cause price to continue to rise over the next few years. Dan X. McGraw