New Jersey Adopts Stringent Emission Standards
July 26, 2007
The Act establishes New Jersey as a leading state addressing global warming.Earlier this month, New Jersey Governor Corzine signed "The Global Warming Response Act" (the Act) making New Jersey the state with one of the strictest emissions reduction laws to date. The Act requires greenhouse gas emission (GHG) levels for the state to be reduced to 1990 levels by the year 2020 (a 16 percent reduction), and further requires that emission levels not exceed 80 percent of 2006 levels by 2050. The Act tasks the state Department of Environmental Protection (the department) with establishing an inventory of the 1990, 2006 and current statewide GHG emissions and requires the department to adopt a GHG emissions monitoring and reporting program by January 1, 2009. GHG emissions to be inventoried and capped include carbon dioxide (CO2) methane, nitrous oxide, sulfur hexafluoride, hydroflurocarbons and polyflurochemicals (such as those found in household cleaners, insulation, air conditioning and inhalers).
The Act establishes New Jersey as a leading state addressing global warming, which New Jersey legislators hope will set a precedent for other states to follow. Many U.S. states, including New Jersey, have taken action individually and through regional groups to address global warming, such as through the Regional Greenhouse Gas Initiative (RGGI) of Northeast and Mid-Atlantic states or the Climate Registry, moving toward a workable emissions trading platform as the Congress debates mandatory emission regulations.
The Regional Greenhouse Gas Initiative
RGGI includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Vermont and Rhode Island, with other states and Canadian provinces as observers, and hopes to link efforts with California and other western states. RGGI’s goal is to implement a flexible market-based cap-and-trade program to reduce CO2 emissions from power plants in the participating states. Under RGGI, participating states adopted an action plan to establish a working group to set guiding principles for a cap-and-trade program design with a learning phase and two development phases. The two development phases focuses on the design of the cap-and-trade program with model rules, and the development of a reliable offset mechanisms to provide credit for verifiable and surplus emissions reductions outside the electricity sector.
In 2006, RGGI released its model rules for a cap-and-trade program where participating states will launch a regional cap-and-trade system using emission credits or allowances to limit the total amount of carbon dioxide emissions in those states, beginning in 2009. The RGGI program initially caps U.S. regional CO2 emissions at 150.6 million short tons of CO2 each year from 2009 until 2015. This initial yearly cap is approximately equivalent to 1990 CO2 emissions levels. Each state receives an emissions budget setting the state’s share of the regional budget or cap. This budget is then allocated by the state among CO2 producing generators. Under the RGGI cap-and-trade program, power plants are able to buy and sell allowances, and other entities can produce emissions offsets, allowing generators to comply with the caps. RGGI continues to discuss auction designs for the sale of allowances. Although RGGI addresses CO2 from power plants, RGGI may expand to cover other GHG emissions and sources.
In 2006, New Jersey’s annual CO2 emissions cap was set at 22.89 million short tons. Beginning in 2015, each state’s emissions budget will decline by 2.5 percent per year so that by 2018 each state’s budget will be 10 percent below its initial base annual emissions budget. New Jersey anticipates placing RGGI allowance auction rules in place by the fall of 2008. New Jersey’s Act expands caps on emissions beyond CO2 to include other GHGs and creates an emission reporting and monitoring program by 2009.
Building on such state and regional efforts, Congress also continues to debate several proposed bills aimed at cutting GHGs through market mechanisms such as the Bingaman-Specter Climate Change Bill introduced on July 11, 2007, that reduces GHG emissions to 1990 levels by 2030.
