Gov. Christie Broke The Law When Pulling New Jersey Out Of Northeast Cap-And-Trade System, Court Rules

CREDIT: Shutterstock

A New Jersey appeals court ruled Tuesday that Gov. Chris Christie broke the law when he withdrew the state from the Regional Greenhouse Gas Initiative (RGGI) back in 2011.

The Appellate Division of the New Jersey Superior Court ruled that the state Department of Environmental Protection must formally repeal the membership regulations in order to withdraw from the program. To do this, the administration must seek public comment — a process which the court gave the state 60 days to initiate. Gov. Christie effectively ended the program three years ago by posting notice on the Department of Environmental Protection’s website that power plants would no longer be required to comply.

“Neither Governor Christie nor the New Jersey Department of Environmental Protection can simply repeal state laws by fiat,” said Susan Kraham, Senior Staff Attorney at Columbia University’s Environmental Law Clinic in a statement.

Kraham represented Environment New Jersey and the Natural Resources Defense Council who filed a lawsuit against the Department of Environmental Protection back in 2012.

RGGI is a nine state cap-and-trade system in the northeast that started operating in 2008. It sets an overall cap on the amount of carbon dioxide that can be emitted by the participating states. Then it breaks that amount into permits — each allowing for one ton of emissions in a given year — and auctions them off to the companies subject to the system, which for now, consists exclusively of power plants. Businesses are thus incentivized to reduce carbon emissions and consequently the number of permits they have to purchase.

RGGI has been criticized for setting the carbon emissions “cap” too high — resulting in meaninglessly low permit prices. In 2010, a permit for one ton of carbon cost less than $2. To address this issue, RGGI states recently dropped the cap from 165 million tons in 2013 to 91 million tons in 2014. The cap will continue to drop 2.5 percent every following year until 2020.

At the first auction of permits earlier this month since the cap was dropped, the price of a ton of carbon had doubled. This development is significant, not only for the overall health and effectiveness of the program going forward, but also for New Jersey’s potential future participation. In withdrawing the state from RGGI, Christie cited the ineffectively low permit pricing as partial justification for his actions.

The New Jersey Legislature has, on multiple occasions, attempted to take action to rejoin RGGI. This week the Senate Environment and Energy Committee is scheduled to take up a bill, S-151, that would require New Jersey to participate in RGGI. Gov. Christie has previously vetoed two similar bills.