Yesterday NJ Governor Chris Christy announced that NJ would exit the 10 northeast state Regional Greenhouse Gas Initiative (RGGI).
The RGGI is a puzzling regulatory system because it (and related state RPS standards) necessarily forces up energy costs in participating states, but delivers no benefits to the states, even if the initiative actually achieves its goals of a slight reduction in local CO2 emissions.
Christie chose to argue against the program on efficiency grounds, rather than play up the more meta issue of lack of benefits. "This program is not effective in reducing greenhouse gases and is unlikely to be in the future. This program is not effective in reducing greenhouse gases and is unlikely to be in the future."
Like many "green energy" programs, the RGGI creates a slush fund from its cap-and-trade system to finance favored energy projects and interest groups. In recent years states including NJ have raided the funds to finance general government programs.
This spring the New Hampshire house voted overwhelmingly to exit the RGGI as well but the NH senate voted to remain in the alliance. The Governor Lynch also favors staying with the RGGI, arguing that NH is just too reliant on the cash it generates.
NJ and NH illustrate the competing forces in play for the RGGI. While the program is not designed to produce tangible environmental benefits (but rather only statistical ones) it faces inevitable pressure from those paying its mounting costs. Yet the cash generated from the program, even if only partially available for general spending, becomes increasingly addictive to state government. And the more of the program revenues taken from the system to fund general spending instead of green initiatives, the less effective the program becomes against even its relatively meaningless statistical goals.
In a related previous post I noted that states with regional cap and trade, and RPS, programs also tend to correlate with states with anti-right-to-work (forced unionism) laws. So it is interesting that while some states are moving away from these green energy regimes, movement is also picking up among some states to convert to right-to-work laws. New Hampshire, Indiana, and Ohio are among states with some movement to change their current laws.