Cap-and-trade is stalled in Congress but it’s already up and running in 10 Northeastern states – and it isn’t pretty. With a drumbeat building in New Jersey for repeal of the state cap-and-trade legislation and attention in the global warming debate being increasingly focuses on the states, this could be a key turning point in the state-level fight over global warming taxes.
Mark Lagerkvist of New Jersey Watchdog has blown the lid off the secretive – and possibly corrupt – working of the so-called Regional Greenhouse Gas Initiative (RGGI, pronounced like the name Reggie), the nation’s only currently-operating cap-and-trade scheme for greenhouse gases and the model for a the proposed national program.
In his stunning expose, Lagerkvist revealed that the $662 million in cap-and-trade permits sold since the RGGI scheme started two years ago have been sold largely to “Goldman Sachs, Morgan Stanley, Merrill Lynch, JPMorgan Chase and other Wall Street heavyweights.”
RGGI is refusing to comply with Lagerkvist’s requests under state open records laws. They referred him instead to the New Jersey Department of Environmental Protection (NJDEP) – the perch from which Lisa Jackson, now Obama’s national EPA administrator, originally designed the RGGI program.
NJDEP, however, refused to comply with his requests, opting instead to protect to secrecy of the Wall Street giants profiting from the cap-and-trade program.
These traders – with the specifics kept secret – are pocketing trading profits while consumers pick up the costs of the new scheme in the form of higher energy prices.
The stakes are considerably higher than even the very real hundreds of millions of dollars in higher prices being imposed on electricity users in the participating ten Northeastern states (New Jersey, New York, Connecticut, Massachusetts, Maine, Rhode Island, New Hampshire, Vermont, Delaware and Maryland).
Other regional programs modeled on RGGI are set to begin operating in the Midwest and in the West in 2012.
In all, 23 states, who comprise a substantial majority of the United States population, will be covered by state cap-and-trade programs if they are allowed to come into full effect.
Left-wing activist Adam Doster, an editor of the far-left magazine In These Times recently pointed to the Midwestern Regional Greenhouse Gas Accord, modeled on RGGI, as the way forward: “If cap-and-trade is dead in Washington, leaders in this region could move forward on that front, as well.”
Doster then goes on to note that all the regional systems will eventually be linked together: “Ultimately, members of the accord imagine linking the Midwest program with similar systems in other regions that are already proposed or up and running.”
Regional cap-and-trade systems suffer the same principal defect as a national cap-and-trade system: they impose the enormous cost of -- in President Obama’s words – making electricity prices “necessarily skyrocket.”
And because it’s easier for employers to move across state borders than national borders, state-level cap-and-trade programs are even more economically damaging.
Additionally, a national program would have no impact on atmospheric concentrations of carbon dioxide or on global average temperature, because the rest of the world will – absent that always-elusive binding, enforceable global treaty – continue to rapidly increase their emissions. State programs are even more futile.
In Arizona, Governor Jan Brewer has already issued an executive order nullifying the policy recommendations of the Western Climate Initiative to protect her state from her predecessor Janet Napolitano’s costly cap-and-trade policies.
Now all eyes are on Governor Chris Christie in New Jersey, the heart of RGGI, where state-level cap-and-trade was first conceived and implemented.
Since RGGI began in 2008, New Jersey’s consumers have paid more than $66 million in higher electric bills to cover the cost of the program. Much of it was likely pocketed by those big Wall Street banks – but the details are being kept secret.
Fortunately, Assemblyman Michael Patrick Carroll and Assemblywoman Alison Littell McHose have introduced A3147 to repeal the Global Warming Response Act of 2007 and withdraw from RGGI.
Governor Christie should support their bill, muscle it through, and be a hero on cap-and-trade.
The rest of the country should watch carefully, because if cap-and-trade can’t be stopped in New Jersey it could be right around the corner in lots of other states.
Mr. Kerpen is vice president for policy at Americans for Prosperity, which is fighting the New Jersey cap-and-trade fight at www.NoNJCapAndTrade.com. He can be reached on Twitter, Facebook, and through www.PhilKerpen.com.
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