The Garden State appears to be returning to its days as a clean energy leader. Its new governor, Phil Murphy (D), signed an executive order on Monday mandating that the New Jersey Department of Environmental Protection (DEP) and the state Board of Public Utilities begin the process of reentering the state into Regional Greenhouse Gas Initiative (RGGI). Within 30 days, the DEP will begin determining rules and guidelines necessary to facilitate New Jersey’s participation in the regional compact.
New Jersey’s status as a clean energy leader started to wane when former Gov. Chris Christie (R) took office in January 2010. His administration delayed progress on offshore wind and favored increased use of natural gas to generate energy. Most prominently, Christie withdrew New Jersey from the RGGI, a program that placed a regional cap on the amount of carbon that fossil-fuel-based power plants can emit.
By withdrawing from the program, New Jersey lost out on an estimated $279 million in revenue that it could have received as a result of participation in the initiative’s carbon budget trading program. New Jersey’s energy efficiency and clean energy efforts could have benefited from that revenue. As a result, from 2006 to 2016, the state fell to 24th from seventh on the American Council for an Energy-Efficient Economy’s energy-efficiency scorecard.
“Pulling out of RGGI slowed down progress on lowering emissions and has cost New Jerseyans millions of dollars that could have been used to increase energy efficiency and improve air quality in our communities,” Murphy said in a statement Monday. “With this executive order, New Jersey takes the first step toward restoring our place as a leader in the green economy.”
Under the Murphy administration, New Jersey also has submitted a motion to the U.S. Court of Appeals for the District of Columbia Circuit to withdraw from litigation challenging the Obama administration’s Clean Power Plan, a rule to reduce carbon dioxide emissions from existing power plants. The Christie administration had joined more than two dozen other states in litigation to stop implementation of the plan, claiming it overstepped federal authority and unfairly punished New Jersey. Following through on its campaign promise, the Trump administration announced in October it plans to repeal the Clean Power Plan.
New Jersey was a founding member of RGGI when it was launched in 2007. The state Global Warming Solutions Fund Act, enacted in 2008, provided New Jersey with the authority to create an allowance auction program and to reinvest the funds.
RGGI’s other founding states were Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. In the coming years, Virginia also is expected to forge a relationship with the regional compact. Virginia Gov. Ralph Northam (D) is moving forward with making the state carbon trading-ready, allowing the state to link to a multi-state carbon allowance trading program such as RGGI.
The RGGI carbon cap program represents a regional budget for carbon emissions generated by the power sectors in participating states. Participants can allocate, award, and transfer carbon allowances. Revenue is generated through quarterly auctions of these allowances. RGGI has raised more than $2.78 billion since the program started in 2007, which includes more than $1 billion in investments in energy efficiency and $270 million for clean and renewable energy investments.
“New Jersey has a long and proud history of being a leader on effective and innovative environmental policy,” Jeanne Herb, associate director of the Environmental Analysis and Communications Group at Rutgers University, said in an email to ThinkProgress. “While significant, rejoining RGGI is only one piece of that agenda. Having it proceed so early in the governor’s first few weeks is definitely sending a signal that, through implementation of a portfolio of actions, New Jersey is well on its way to becoming a leader in innovative climate change policy.”
Under state law, auction proceeds must be invested in a variety of ways to benefit consumers, including investment in clean energy efforts in the industrial and commercial sector; providing funds for consumers who struggle to keep up with energy costs; investment in actions at the municipal level that result in reductions in greenhouse gas emissions, and investment in efforts to restore and steward forests and marshes that sequester carbon.
In addition to reducing carbon emissions, those investments could deliver other benefits, including creating clean energy jobs, building more livable communities, and increasing New Jersey’s capacity to adapt to a changing climate through natural systems restoration, Herb said.
On Monday, the clean energy campaign group ReThink Energy NJ said in a tweet that Murphy’s decision to rejoin RGGI represents a boost for the state’s “already growing clean energy economy.” According to a report released by the group last spring, 79 percent of all energy generation and efficiency jobs in New Jersey are in clean energy, with 41,000 jobs in solar, wind and energy efficiency.
Under Christie, the state’s focus on climate change may have waned, but the solar energy industry continued to thrive. In 2012, the Republican governor signed a bill into law intended to help expand and stabilize New Jersey’s robust solar industry. In 2017, New Jersey’s solar industry surpassed 80,000 solar projects, with a combined installed solar energy capacity exceeding 2.25 gigawatts. The state ranks fifth in the country in total installed solar capacity, according to the Solar Energy Industries Association.
And yet, Christie will be best remembered among clean energy advocates for his decision to leave RGGI. Prior to its departure from the pact, New Jersey participated in 14 carbon allowance auctions that brought in a total of $115 million that should have been reinvested in energy efficiency and renewable energy programs, ratepayer relief, and forest and tidal marsh stewardship and restoration, said Marjorie Kaplan, associate director of Rutgers Climate Institute in New Brunswick, New Jersey. Roughly half of those funds were diverted by the Christie administration to other state programs, she said.
By now, New Jersey would have had the revenue from nine additional auctions to reinvest in such programs if the state had not left RGGI, according to Kaplan. Although the allowance prices fluctuate, the clearing price generally has been higher more recently than it was before New Jersey pulled out of RGGI in 2011, she said.
Once New Jersey rejoins RGGI, Kaplan said she would be surprised if funds again get diverted from their legislative intent, “as this issue has become more pronounced in New Jersey in recent years.” Upon signing the executive order on Monday, Murphy directed the state DEP to consider allocation of funds to communities disproportionately burdened by environmental exposures, she noted.
The governor’s decision to rejoin RGGI sends a signal that addressing climate change, Kaplan said, “while seemingly daunting, is a task where states can play a key role and by working together, can make a difference.”