From my Washington Examiner Local Opinion Zone post
Maryland Governor Martin O’Malley (D) took another swipe this week at his bête noire Chris Christie the Republican Governor of New Jersey. O’Malley slammed Christie for withdrawing New Jersey from the Regional Greenhouse Gas Initiative, a multistate cap and trade compact with the ostensible goal of reducing greenhouse gas emissions.
Under RGGI power producers buy emission allowances at auction to power, states then use the proceeds to subsidize renewable energy and efficiency programs. Utilities pass on costs to ratepayers
"This program is not effective in reducing greenhouse gases and is unlikely to be in the future," Christie said. "The whole system is not working as it was intended to work. It’s a failure."
In a statement O’Malley said “I reject his assertion that the initiative is ineffective in reducing greenhouse gases…Governor Christie is simply wrong when he claims that these efforts are a failure. Here in Maryland, RGGI has avoided dangerous carbon dioxide emissions equivalent to taking nearly 3,500 cars off the road.”
However, RGGI’s record supports Christie’s claim, because in reality it is a political Potemkin village masquerading as a policy initiative.
As one RGGI insider noted:
I do not think RGGI cap was set to reduce emissions because that wasn’t theIndeed, as the New York Times noted as RGGI took effect:
purpose of RGGI. At the start of the RGGI process there was a tacit understanding amongst the participants that the real goal of RGGI was to develop the framework for a CO2 cap and trade program that could be used as a model for a national program. After all, the unstated reality is that it could never hope to actually have any impact on global warming.
So auction demand may be weak at the start, with millions of allowances the states planned to sell not immediately needed. And with the cap on emissions most likely to be higher, at least initially, than the plants’ actual carbon-dioxide output, it may be many months before utilities have an incentive to cut pollution…Since trading began, the cost of RGGI allowances has dropped from $5.58 per ton to the preset floor of $1.86 per ton.
“The supply of allowances is more than what the market needs,” said Milo Sjardin, head of the North America division of New Carbon Finance, a research and analysis firm. “Prices are not going to be high, not for the foreseeable future.” He also noted that the market was also “not going to produce a lot of emission reductions” as long as the supply of allowances outstrips utilities’ need.
Even The New Jersey Star Ledger—no fan of Christie—admitted contrary to O’Malley’s claim, “emissions dropped of their own accord, due to the economic slowdown and the discovery of new supplies of cleaner natural gas.”
Furthermore, O’Malley lacks credibility on the issue given he raided some RGGI funds to help balance this fiscal year’s budget.
Unlike RGGI a federal cap and trade program, like the failed Waxman-Markey bill would be economically ruinous. The Heritage Foundation estimated that had Waxman-Markey passed Maryland would lose over 31,000 jobs and see a $2.7 billion reduction in gross state product by 2012 as a result.
While the rest of the nation is safe from cap and trade—for the moment—Marylanders are not as O’Malley has pressed ahead with an equally ruinous carbon reduction plan, which purports to reduce emissions 25 percent below 2006 levels by 2020 without having an adverse effect on jobs or the state economy. O’Malley proposes to achieve these impossible goals through cumbersome taxes, fees, regulations and, cap and trade.
O’Malley’s reaction only serves to reiterate Christie’s point that RGGI is a cheap façade used to create support for a larger cap and trade boondoggle.