US: New Jersey’s immediate return to RGGI unlikely

New Jersey’s return to the Regional Greenhouse Gas Initiative (RGGI) is not imminent despite the state’s assembly passing a resolution in December requiring the Department of Environmental Protection (DEP) to withdraw or amend rules pertaining to its carbon budget.

New Jersey Governor Chris Christie unilaterally decided to withdraw the state from RGGI at the end of 2011, because he said the programme did not accomplish its goal of reducing emissions. He added the programme served as an additional tax on ratepayers.

A New Jersey appellate court ruled the state did not follow the correct administrative procedure and did not formally repeal the state’s carbon budget. The ruling did not relate to Christie’s decision to withdraw the state from RGGI.

In December, the state’s assembly passed a resolution by a 46-32 margin that said the DEP’s decision to repeal the state’s carbon budget rules in August was not in line with the legislature’s intent.

That action gives the DEP 30 days to amend or withdraw its action. The DEP did not immediately reply to questions about how it would respond to the legislature’s action.

If no action is taken, the state’s legislature can pass an identical resolution that would invalidate the rule or regulation passed by the DEP. That would allow the New Jersey carbon rules to remain as valid rules in the state.

However, it would not formally put the state back into the programme.

“New Jersey doesn’t automatically go back into RGGI, and even if it did, the state would need to adopt new rules because the programme has gotten stronger,” said Doug O’Malley, the director of advocacy group Environment New Jersey.

If reinstalled, New Jersey’s carbon rules would not include structural changes made to RGGI during the 2012 programme review. Those rules cut RGGI’s cap by nearly half at the beginning of 2014 and added some other structural mechanisms to strengthen the programme.

RGGI officials said these addressed some of the concerns brought up by Christie.

O’Malley said the assembly’s action would create momentum for the state to take some action to regulate carbon emissions from power sources.

Experts do not believe Christie will alter his stance of cap-and-trade programme while he is running for the Republican nomination for president, because cap-and-trade programmes are opposed by most Republican voters.

Altering his stance could diminish his ability to attract Republican primary voters.

It is also unlikely that New Jersey will rejoin RGGI in an effort to comply with the Environmental Protection Agency’s (EPA’s) Clean Power Plan, which is also opposed by Republicans. Those rules would reduce overall power emissions by 32% from 2005 levels by 2030.

States would have the ability to make their individual compliance programme, and they could opt to join regional programmes, such as RGGI. Numerous environmental think tanks have urged New Jersey to rejoin RGGI in order to comply the EPA’s rules.

At the earliest, states would not have to submit plans to the EPA until this fall, but that deadline can be extended. dan.mcgraw@icis.com