AFP-NJ Comments to the Department of Environmental Protection on the RGGI

Feb 19, 2019 by AFP

Commissioner McCabe:

Through broad-based grassroots outreach, Americans for Prosperity (AFP) is driving long-term solutions to the country’s biggest problems. AFP activists engage friends and neighbors on key issues and encourage them to take an active role in building a culture of mutual benefit, where people succeed by helping one another.

I write to express our disagreement with the proposal to have New Jersey rejoin the Regional Greenhouse Gas Initiative (RGGI).

New Jersey’s power sector emissions in 2015 were 42 percent lower than in 2005, and in this period coal-fired generation has also decrease dramatically, going from 12.7 percent in 2005 to just 2.3 percent in 2015.[1]

Supporters of the RGGI argue that the program has produced substantial decreases in power plant emissions since its inception. Nevertheless, a peer reviewed study from the Cato Institute[2] looks at the period from 2007-2015 and challenges this assertion by showing that RGGI states simply tracked with reductions seen across the country in reaction to natural gas prices and a slew of new regulations promulgated by EPA during the past administration.

The fact is that carbon dioxide emissions began falling in RGGI states before the initiative went into effect. An analysis by the New York State Energy Research and Development Authority concluded that “fuel-switching from petroleum and coal to natural gas (due to relatively low natural gas prices)” was a primary driver of declining CO2 emissions in RGGI states from 2005 to 2009.[3]

However, while the program did little to contribute to the stated goal of emission reductions, the impact of the higher electricity prices in the RGGI states has contributed to in a 12 percent drop in goods production and a 34 percent drop in the production of energy intensive goods. While the non-RGGI comparison states increased goods production by 20 percent and only lost 5 percent of energy-intensive manufacturing.[4]

This is clearly appreciated in RGGI states 18 percent drop in industrial electricity demand, while non-RGGI comparison states fell only 4 percent.[5]

It is a reasonable expectation that in the medium term RGGI implementation will likely lead to the export of emissions to other states with no positive global impact through the export of electricity generation and manufacturing jobs.

The proposed new rules and amendments establish the New Jersey Carbon Dioxide (CO2) Budget Trading Program might seem like a well intention effort to control pollution, but the fact remains that micromanaging the state power systems would lead to unnecessary and painful results for families, workers, and business in the state.

As the last decade in America power markets shows, a cleaner fuel mix was brought about by technological innovation and market forces, not government diktat.

We believe that an honest Regulatory Impact Analysis is likely to show that the cost of this regulation far exceeds the benefits.

AFP-New Jersey believes it is fundamental that public policies are judged by their results, rather than their intentions. Considering this, we encourage you to rethink your approach to this harmful and ineffective regulation.

Sincerely,

Erica Jedynak

State Director

Americans for Prosperity- New Jersey.

[1] An Examination of Policy Options for Achieving Greenhouse Gas Emissions Reductions in New Jersey September 2017 https://www.georgetownclimate.org/files/report/Achieving%20Greenhouse%20Gas%20Emissions%20Reductions%20in%20NJ.pdf

[2] A Review of the Regional Greenhouse Gas Initiative By David T. Stevenson https://www.cato.org/cato-journal/winter-2018/review-regional-greenhouse-gas-initiative

[3] RGGI: A Faulty Model for “Successful” Cap-and-Trade https://instituteforenergyresearch.org/analysis/rggi-a-faulty-model-for-successful-cap-and-trade/

[4] Non-RGGI states are not all states that do not participate on RGGI, rather a sample of 5 states used by the author of the study for comparison purposes. A Review of the Regional Green Gas Initiative https://object.cato.org/sites/cato.org/files/pubs/pdf/working-paper-45_1.pdf

[5] Ibidem.