Acting Governor Richard Codey

Codey Announces Landmark Regional Agreement to Combat Global Warming
Initiative Advances New Jersey's Continuing Efforts to Address Global Climate Change(TRENTON)� Acting Governor Richard J. Codey today announced an historic seven-state agreement to combat global warming by reducing carbon dioxide (CO2) emissions from power plants. The plan will advance efforts to combat global warming, promote energy efficiency, and place New Jersey at a competitive advantage to address future energy challenges.

The agreement follows the state’s adoption of the California Clean Car program, which will strengthen vehicle emission standards. In concert, these actions address the leading sources of carbon dioxide emissions.

“New Jersey has taken a lead role in shaping a visionary and historic agreement to combat global warming,� said Codey. “In the absence of federal leadership, these states have come together to take real steps to cut carbon dioxide emissions.�

Through the Regional Greenhouse Gas Initiative (RGGI), New Jersey, represented by Department of Environmental Protection Commissioner Bradley M. Campbell and Board of Public Utilities President Jeanne M. Fox, has negotiated for two years with other northeast states to address global warming, one of the most pressing environmental challenges of our time. Today’s agreement, approved by seven states (New Jersey, New York, Delaware, Connecticut, New Hampshire, Vermont and Maine) calls for a mandatory cap on emissions, coupled with a market-based trading program to achieve the lowest possible compliance costs.

The seven states today released a Memorandum of Understanding (MOU) that will be signed by each state. The MOU details the key components of the program. The participating states also plan to issue a detailed set of draft model regulations for the RGGI program in early 2006 for public comment. After comments are received on the draft regulations, each state will pursue the necessary regulatory and/or legislative approvals necessary to adopt the program. The program is slated to begin Jan. 1, 2009.

Under the plan, regional CO2 emissions will be capped at 121.3 million tons per year beginning in 2009 through 2014 (a level approximately equal to 1990 emissions), and will be reduced to 10 percent below this level by 2018. The cap-and-trade program established in the agreement sets limits on regional emissions, but allows companies to trade emissions allowances. Companies that do not have enough allowances to cover CO2 emissions must either reduce their emissions or purchase allowances from sources able to reduce their emissions below their prescribed cap.

“This regional, market-based, bipartisan program will demonstrate to other states and to the world that carbon dioxide pollution can be reduced in a way that expands markets and economic opportunities,� said Campbell. “Ultimately, the success of this model will lead the way to a national program to cut greenhouse gas pollution and reduce the threat of global climate change.�

This regional agreement provides additional flexibility by allowing power companies to meet some reduction requirements through the use of offset credits, which represent approved emissions reductions achieved outside the electric sector. Examples of offset credits include energy efficiency measures to reduce natural gas consumption in the building sector and the capture of methane from landfills.

“The RGGI agreement not only helps the environment by reducing pollution, but it also helps grow our economy by building markets for new energy technologies that complement New Jersey’s more aggressive clean energy initiatives,� said Fox. “Taken together both RGGI and our Clean Energy Program will be able to offset the need for additional power plants.�

The RGGI agreement also provides that at least 25 percent of the emissions allowances will be used to benefit energy consumers. Under this mechanism, electric generators would purchase these allowances, and the funds generated would be used to support additional energy efficiency, clean energy technology investments and consumer rebates to protect low-income consumers. New Jersey has stated its intention to dedicate a significantly larger portion of allowances to support consumer benefits.

“RGGI is vital turning point in the race to reverse global warming, a planet-threatening problem with real-life consequences here at home,� said Dena Mottola, executive director of the New Jersey Public Interest Research Group Law and Policy Center. “By taking this historic first step to cut greenhouse gas emissions from power plants, New Jersey and the other northeast states pave the way for the whole nation to adopt responsible solutions to global warming.

“We thank Governor Codey, Jeanne Fox, and Brad Campbell for their strong leadership, which ensured this plan was designed to deliver both real reductions in global warming emissions and savings for consumers on their utility bills,� Mottola added.

The RGGI program is expected to result in very modest direct impacts on average residential household electricity bills. In 2015, the program is expected to increase average household bills in New Jersey between $3 and $5 per year, representing an average increase of 0.3 percent to 0.5 percent. Support for increased energy efficiency, achieved through both the RGGI program and other clean energy policies enacted by New Jersey, is projected to produce average household bill savings that exceed the price impact of the RGGI program. This combination of policies is expected to result in a net reduction in average household electricity bills.

In October, New Jersey took a crucial first step to tackle global warming by classifying carbon dioxide as an air contaminant. New Jersey was one of the first states in the nation to take such action. The adopted regulations established the framework to allow the Garden State to quickly move forward with the RGGI program.

These regulations and New Jersey’s participation in RGGI reflect Codey’s ongoing commitment to improve air quality and reduce pollution. Also announced today was the adoption of new rules to reduce ozone, fine particles and toxic air pollution by establishing new, cleaner vehicle emission standards. The vehicle emission rules adopt the California Low Emission Vehicle standards for CO2, and apply them to new vehicles delivered for sale in New Jersey starting Jan. 1, 2009. Automobiles are also significant contributors of greenhouse gas emissions.

Carbon dioxide is a greenhouse gas that traps the sun’s heat in the atmosphere, contributing to a rise in the earth’s average temperature and in sea levels. Numerous studies have determined that global warming is responsible for adverse environmental impacts today, and that projected further climate change will worsen serious impacts on the environment, ecosystems, wildlife and human health.

Global warming is a serious threat to New Jersey, with projections forecasting average temperature increases between two and 10 degrees Fahrenheit by 2100. Such severe climate change would contribute to air quality problems by exacerbating smog and ozone.

New Jersey is especially vulnerable to sea level rise (due primarily to thermal expansion of the oceans and melting of polar ice caps) and increases in the intensity of extreme weather events because of its gently sloping, highly developed coastline. These consequences could have serious impacts on New Jersey’s environment and coastal communities. There is a strong scientific consensus that severe consequences will result if action is not taken to reduce greenhouse gas emissions.

For more information please visit http://www.rggi.org/.