June 7, 2012

New Jersey Sued Over Cap and Trade Reversal

Since Gov. Chris Christie pulled New Jersey out of the multistate carbon trading system known as the Regional Greenhouse Gas Initiative last year, supporters of the program have been clamoring for a reversal of the decision.

The legislature has voted twice to return the state to the program, known as RGGI (pronounced reggie), but the governor has already vetoed one of the bills. Environmental groups have faulted the governor for withdrawing New Jersey from a program that produces revenue that participating states invest in renewable energy and energy efficiency programs.

Now, two of those groups, the Natural Resources Defense Council and Environment New Jersey, have gone to court. In a lawsuit filed on Wednesday in Superior Court in Trenton against the state’s Department of Environmental Protection, the groups seek to reinstate New Jersey’s participation, arguing that the withdrawal was illegal because it was accomplished without following the state’s administrative laws, which they say would require giving the public an opportunity to comment.

New Jersey’s withdrawal left RGGI with nine participating states, including New York. The program caps carbon dioxide emissions from electric power providers and allows those that exceed their targets in reducing pollution to sell their allotted carbon “allowances” to other companies at public auctions as an incentive to further reduce emissions.

Governor Christie questioned the program’s effectiveness, saying that New Jersey was reducing its emissions in any case because it is relying more on natural gas and less on coal to meet its energy needs. Critics of cap and trade programs argue that RGGI constitutes an illegal form of taxation because it imposes additional costs on electric utilities that are then passed on to customers.

Officials with the New Jersey Department of Environmental Protection told The Star-Ledger of Newark that the withdrawal was undertaken in consultation with the attorney’s general office and was in full compliance with the law.

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