Gov. Phil Murphy has proposed a cap-and-trade system on electricity generation in what would essentially be a carbon tax on New Jersey businesses and residents.
The move is part of the plan to rejoin the Regional Greenhouse Gas Initiative (RGGI), a collection of mid-Atlantic states voluntarily participating in a cap-and-trade program on greenhouse gas emissions.
Murphy’s plan, in the form of regulations proposed by the Department of Environmental Protection, would cap carbon emissions by electricity utilities at 18 million tons in 2020. Utilities that cannot meet the limits on emissions would have to purchase credits from those that have reduced emissions beyond what’s required by the cap.
New Jersey was an original member of RGGI when it was formed in the mid-2000s, but Gov. Chris Christie withdrew from the group after winning election in 2009. NJBIA has opposed participating in RGGI since its beginning, in part, because New Jersey ratepayers already fund programs for renewable energy subsidies and oftentimes that money is siphoned out of the Clean Energy Fund for budgetary purposes.
“Rejoining RGGI basically represents a carbon tax on ratepayers,” said NJBIA Vice President Tony Bawidamann. “It asks them to pay more for their energy, which is already very costly. From a business perspective, it makes New Jersey uncompetitive in this region.”
Additionally, the move will do little to improve the environment. New Jersey’s energy sector is already one of the cleanest in the PJM Region: much of its in-state power generation comes from carbon-free nuclear energy; and coal plants have been replaced by cleaner natural gas, renewable energy, and energy efficiencies. Being a part of RGGI would also do nothing to prevent New Jersey from receiving emissions from upwind, non-RGGI states with dirtier power sectors like Pennsylvania and Ohio.
“Now as New Jersey returns to RGGI, our residents and businesses will absorb additional compliance costs – on top of having some of the highest retail electricity costs in the nation,” Bawidamann said. “In other words, New Jersey will incur more costs and have little benefit in air quality to show for it.”