WolfeNotes.com

Once again, political deals in Trenton on the global warming front are being missed by media coverage.

For the inquiring reader and intrepid journalists out there, here is a different perspective on the story, with the critical facts and policy context that are so lacking in the news coverage.

I write particularly for those who – like me – agree with the scientists that global warming is real and that significant actions need to be taken to reduce emissions of green house gases now, before it is too late and a critical threshold is reached and irreversible impacts are triggered.

Yesterday, the Assembly Environment Committee released the Corzine Administration’s first step to implement the aggressive goals of the Global Warming Response Act he signed in July.

Those goals call for a 20% reduction in emissions by the year 2020, and a steeper 80% reduction by 2050. The goals have been praised, but the law criticized as lacking any funding or programs to achieve the goals – see: Star-Ledger Op-Ed: “No Teeth in ‘tough. pollution law”.

As we go through the details, keep in mind – for the mathematically challenged out there – that a REDUCTION in current emissions is very different than a slower rate of projected growth in pollutant emissions.

The committee released a bill that would set up a pollution “cap and trade” program. Even the name is a misnomer – it should be called the “pollute and profit” program.

Today’s news coverage leads with a quote by Department of Environmental Protection Commissioner Lisa Jackson, about “brave steps”

“This is about brave steps,” Lisa Jackson, the state’s environmental commissioner, said during the hearing in Trenton. “Just by having the opportunity to move forward on this legislation, we will continue to put pressure on the federal government to act.”

Given the following account, you decide if what was done yesterday could possibly be described as “brave steps”.

First of all, the Committee engaged in a classic bait and switch.

The Committee agenda listed Assembly bill No. A4559, sponsored by Chairman McKeon. The McKeon bill was general in nature and strictly limited in scope to the “Regional Green House Gas Initiative” (RGGI). RGGI is a pollutant “cap and trade” program that applies to power plants. The McKeon bill would authorize the DEP to develop a RGGI program and auction off the 22.9 million tons of pollution allowances allocated to NJ under the RGGI program to the highest bidder. The money from the auction would be invested in energy efficiency and renewable power (solar, wind etc).

RGGI is a cooperative agreement between the Governor’s of 10 northeastern and mid-Atlantic states to reduce green house gas emissions. These Governors got tired of waiting for the Bush administration to take action at the federal level.

But the Committee actually heard a substitute bill crafted in secret late last week by Senator Sweeney (S2976). Sweeney just happens to have a planned new 600 megawatt coal power plant in his district seeking DEP permit approvals, and seems to be meeting with construction unions and power utilities. The Sweeney bill was not formally introduced or even made available to the public until late Monday.

I was not aware that it was on the Thursday agenda. But enough of the political process arguments – here’s some facts to consider.

1. RGGI would “cap” NJ emissions of carbon dioxide at 22.9 million tons. I put the word cap in parenthesis, because the cap has many loopholes – tons of additional emissions effectively could be allowed by various private market “emission offset” programs. The emissions “cap” would be reduced by 10% by 2019. However, the 22.9 million ton “cap” is 9% MORE than current average emissions, so the actual best case “reduction” RGGI could produce is closer to 1%. Keep in mind that the Corzine emissions reduction goal for 2020 is 20%. So RGGI is comparatively small potatoes.

This discrepancy is misleadingly spun by Corzine officials who state that RGGI would result in “a 17% reduction from business as usual” (see Senate Environment Committee testimony of DEP Commissioner Jackson. April 14, 2007). The term “business as usual” is not defined, but it represents a large projection in electric energy demand. So now you can see the significance of my early emphasis on the difference between an actual reduction in emissions versus a slower rate of projected growth.

Shockingly, no intrepid reporter, legislator, or environmental activist has ever called the DEP Commissioner of this glaring spin. However, national environmental groups have lambasted exactly the same methodology by the Bush administration’s Department of energy “energy intensity” indicator.

So, with the best case and 100% compliance, RGGI can provide a 1% reduction – is this “brave”?

2. In her testimony, the Commissioner and the Committee emphasized the need to limit economic impacts on homeowner electric bills. The Commissioner pledged to limit the RGGI auction program to “$40 – 50 million” – that’s a quote – which would result in less than a 1% increase in typical homeowner electric bills.

If typical electric bills are 100 per month, is a dollar a month to prevent global catastrophe brave?

3. NJ electric consumers currently fund a $400 million per year energy efficiency program under the Board of Public Utilities’ supervised “Societal Benefits Charge”.

Green house gas emission reductions would have to greatly exceed than those resulting from the current $400 million program. So, I assumed the RGGI program would generate funds in excess of $400 million.

However, DEP Commissioner Jackson’s testimony pledged to keep the RGGI revenues between “$40 – $50 million”.
Is investing 10% more than what we’re currently already spending on energy efficiency brave?

4. The “deal” that was cut by the Assembly Committee in the compromise bill that was released stripped enforcement provisions. These safeguards are designed to assure that any emission reductions and emissions “offset projects” meet five tests to assure that they are:

a) real, b) additional, c) verifiable, d) enforceable, and e) permanent.

These safeguards are necessary to make the program work and to assure that sham counterfeit allowances are not created by sham projects. This protects not only the environment, but the energy efficiency and renewable investments of legitimate businesses.

Without government oversight and enforcement, the market can’t work.

Was it “brave” to strip enforcement provisions from the bill?

5. The ratepayer advocate, a champion of economic regulation of public utilities, opposed the bill on grounds that market competition was needed – she provided this analogy: “when we embarked on the recycling program, we didn’t guarantee the landfill operators revenues and profits for reduced garbage disposed due to recycling”.

Was it brave to provide monopoly profits to the big energy utilities?

6. Another provision of the bill would make global warming emission reduction programs at DEP voluntary and incentive based. This amounts to a preemptive strike against regulation by DEP. The business community strongly opposes DEP regulation in favor of voluntary measures, and instead supports incentives (subsidies to polluters). For example, DEP could revive the 1990 Clean Air Act Employer Trip Reduction program to reduce car emissions from single occupant vehicles commuting to major corporate campuses. Or

DEP could mandate that new development meet LEED Green Building standards and offset new emissions.

Was it “brave” to support a stealth voluntary incentive approach instead of fighting for the ability to impose necessary regulatory controls?

7. The bill released would generate $40 – $50 million, an auction price of less than $2 per ton of emission allowance. But economic studies say carbon allowances would have to be in the range of $30 – $50/ton to “internalize” the pollution costs of carbon and change utility economic decisions to continue to operate coal plants..

Was it “brave” to support a bill that would have NO impact on the price signals or economic decisions of coal power?

8. The $40 million RGGI auction revenue expectation concession was established BEFORE the first RGGI auction scheduled for June 2008. Could you imagine an auctioneer announcing his bottom line in advance of the auction?

Was it “brave” to announce your auction bottom line before the auction?

9. In the original version of the bill, DEP was slated to receive 2% of $70 million in RGGI auction revenues to support program administration (or about $1.4 million to DEP). In the compromise bill, DEP administrative costs were doubled, from 2% to 4% of $40 – 50 million in auction revenues (or about $1.6 – $2.0 million to DEP).

Was in “brave” to support a bill that guts RGGI revenue but doubles the share of funds to DEP?

10. The environmental lobbyists applauded the DEP Commissioner for avoiding an even worse train wreck! It’s gone from a simple sham, to shame.

Given all these facts and how bad this bill was, was this a “brave” move on their part?