While all eyes were on the huge showdown in Wisconsin last week, another state policy fight with significant national implications took a big step forward in New Hampshire.
Here's what you missed: The New Hampshire House of Representatives voted overwhelmingly -- 246 to 104 – to become the first state to move to repeal an already up-and-running global warming cap-and-trade energy tax scheme.
The Granite State's repeal appears headed for a similarly veto-proof repeal in the State Senate that will make Governor John Lynch powerless to stop it.
The repeal effort was spearheaded by New Hampshire’s new conservative stalwart House Speaker William O’Brien, who made it a leadership priority, to withdraw from the 10 state cap-and-trade scheme known as the Regional Greenhouse Gas Initiative (RGGI).
O’Brien told my organization, Americans for Prosperity:
“The Regional Greenhouse Gas Initiative has always been a backdoor tax increase on the citizens of New Hampshire. RGGI is a perfect example of the cost of regulation to the public. Rarely has a program been as transparent in its attempts at income redistribution.”
He's got that exactly right. The $28.2 million the state has raised from hidden cap-and-trade taxes since 2008 has been almost completely diverted to special interest giveaways for politically-connected corporations. An exposé from a recent report from Grant Bosse of the Josiah Bartlett Center broke down who the winners were, at taxpayer expense. And RGGI is set to slam New Hampshire’s ratepayers even harder with energy taxes hidden in their electric bills, with an estimated price tag of $70 million over the next year.
O’Brien correctly told us the vote was a green light for businesses to come to New Hampshire:
“Eliminating RGGI sends a clear signal to the business community that we are reversing the direction that the state is taking in terms of creating a regulatory environment that is pro-business. That’s critical in terms of sending a strong message that we are open for business and ready to work with employers to help grow our economy and create good, new jobs here.”
There are major implications for cap-and-trade well beyond New Hampshire.
At the regional level, it’s a direct blow to RGGI and raises the pressure in New Jersey, the birthplace of regional cap-and-trade. It was there that Lisa Jackson, now our EPA administrator, cooked up the idea for RGGI when she ran New Jersey’s Department of Environmental Protection. New Jersey's repeal effort is already moving fast and it will get a shot in the arm from the New Hampshire vote.
At the national level, it cements the extremely strong opposition to cap-and-trade in New Hampshire and therefore colors how the issue will play in the Republican presidential primaries. In 2008, both parties nominated pro-cap-and-trade candidates for president, and again this year there are a number of pro-cap-and-trade Republicans vying for the nomination. They will have a difficult time explaining to voters why a program that has failed and been overwhelmingly rejected at the state level should be taken national.
When RGGI was launched in 2008, the original sales pitch to industry was that they could get a jump on the rest of the country by buying cap-and-trade permits at a couple bucks apiece, and make a fortune when a national program came in with much higher prices. But if a national program is no longer coming, then RGGI is a big loser for everyone except the politicians who get to spend the money and the special interests receiving subsidies. RGGI is currently limping along; the most recent permit auction didn’t even sell all of the permits offered, even at the floor price of $1.86 per ton.
It’s time to stop cap-and-trade permanently—at the state and federal level. Speaker O’Brien and the New Hampshire House deserve enormous credit for taking a big step towards that goal.
Mr. Kerpen is national vice president for policy and Mr. Lewandowski is New Hampshire state director at Americans for Prosperity.
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