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Jobs and Savings Help Regional Carbon Market Survive GOP Attacks

New Hampshire, Delaware and Maine have decided to stay in RGGI for now, but New Jersey's exit is still possible

By Maria Gallucci, SolveClimate News

May 23, 2011
Merrimack Coal-Fired Power Plant

Efforts to unravel a regional carbon trading program have hit a wall in recent weeks after lawmakers in New Hampshire, Delaware and Maine moved to reaffirm their states' participation in the market.

"The tide has definitely turned against these ideas of pulling out of RGGI," Seth Kaplan, vice president of policy and climate advocacy for the (CLF), told SolveClimate News.

"It is a classic political pattern. You have a small group of committed folks trying to make something happen, and they do not realize the depth of the people who oppose them," he said from CLF's Massachusetts office.

But in New Jersey, where a group of lawmakers is still trying to repeal RGGI, the decision could go either way with potentially serious consequences for the future of the scheme, experts say. The state emits nearly as many greenhouse gases as New Hampshire, Delaware and Maine combined.

Among those considering pulling out, "the most important state of all is New Jersey," said Emilie Mazzacurati, head of carbon research for North America at , a Thomson Reuters research firm.

RGGI, or the , is a carbon market between 10 Northeast and Mid-Atlantic states and the first mandatory emissions trading plan in the country. The program has come under fire this year mostly from GOP legislators, who have accused RGGI of raising energy prices and putting businesses in participating states at a competitive disadvantage.

Observers attribute most of the opposition's momentum to campaigns mounted by (AFP) and the (ALEC), groups funded in part by billionaire oil executives Charles G. and David H. Koch, respectively.

In New Jersey, the claims that energy taxes under RGGI have cost businesses and consumers more than $66 million.

But proponents of RGGI — which include business owners, trade groups and environmental organizations — have evidence that the pact reduces energy costs by promoting energy efficiency, and creates jobs by offering clean energy companies incentives to move to the region.

So far, their data has swayed lawmakers to remain in the program.

Under RGGI, power plants in participating states are required to cap carbon dioxide emissions at 188 million short tons per year through 2014, with additional annual reductions of 2.5 percent from 2015 to 2018. States sell carbon allowances through quarterly auctions and invest the earnings in energy efficiency and clean technology efforts.

RGGI was launched in 2005 and held its first online auction for carbon credits in 2008. States have since raised nearly $861 million in carbon allowances from 11 auctions, according to the posted by RGGI.

"With what happened [in mid-May], it may be the beginning of the end for a lot of these efforts" to repeal RGGI, said Luis Martinez, an energy attorney for the (NRDC) in Washington, D.C.

RGGI Survives N.H. Vote, with Caveats

On May 10, the New Hampshire Senate to amend the state's participation in RGGI, rather than repeal it, as a March bill passed by the state House of Representatives sought to do.

The GOP-led House Science, Technology and Energy Committee approved the initial bill to withdraw New Hampshire from RGGI in mid-February.

Gov. John Lynch has said he would veto the repeal bill if it passed in the Senate, though advocates said that a positive vote from both chambers could be enough to potentially override him.

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