Special Report

A Capper for Christie?

Anti-regulatory efforts in New Jersey could unwind Kyoto-type environmental schemes in other states.

By 9.28.10

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An anti-regulatory earthquake is stirring in New Jersey that could potentially free other states and regions from economically unsound energy restrictions and renewable mandates that have further burdened America's already beleaguered consumers with higher costs.

Representatives from private industry have joined with the state branch of Americans for Prosperity (AFP), a grassroots free market advocacy group, to organize a series of protests and media events targeting global warming policies modeled after the Kyoto Protocol, an international agreement that came into force in 2005. Most recently, the New Jersey Restaurant Association (NJRA), which represents the state's largest employment sector, announced its support for a bill introduced in the state assembly that would both repeal "cap and trade" legislation and rescind N.J.'s membership in the Regional Greenhouse Gas Initiative (RGGI).

If successful, this one-two punch could reverberate in other parts of the country that have succumbed to higher energy prices. Michael Patrick Carroll (R-25) and Alison Littell McHose (R-24) are leading the charge for A 3147 on the Assembly side. They are now joined in this effort by Sen. Mike Doherty (R-23) and Sen. Steven Oroho (R-24), who have introduced mirroring legislation in the upper chamber.

"The opposition that is building up against 'cap and trade' in our state could have national implications since the program here was crafted as a model for what President Obama had in mind for the whole country," Steve Lonegan, a former mayor of Bogota, who heads up AFP's N.J. chapter, said in an interview. "The American people are opposed to these costly environmental regulations but they are still growing right under our feet at the state level with these regional initiatives. It's shocking how few people realize New Jersey already has the program."

A key figure here is Lisa Jackson, President Obama's Environmental Protection Agency (EPA) administrator, who previously served as the N.J. environmental commissioner under former Democratic Gov. Jon Corzine. Jackson helped formulate what is arguably the most restrictive and economically damaging global warming regulatory regime now in operation throughout the country. The N.J. law, which became effective in 2008, calls for greenhouse gas emissions to be reduced to where they were in 1990 "no later" than 2020. It further requires that emissions not exceed 80 percent of their 2006 levels "no later" than 2050.

Unfortunately, the New Jersey experience is part of a larger story.

Although the Kyoto Protocol has been held at bay on the federal level, environmental pressure groups have successfully lobbied for greenhouse gas regulations within various states. A crucial player in this area has been the Center for Climate Strategies (CCS), an unheralded but politically potent outfit that has worked successfully to bypass state legislatures and formulate regulatory policy with compliant governors in both parties. Chris Horner, a senior fellow with The Competitive Enterprise Institute (CEI), has documented the organization's activities and methodology in a very detailed report for the Capital Research Center (CRC) that is worth reviewing in light of recent developments.

"The activists' new state-based strategy avoids open political debate," Horner explained in his report. "Instead, it depends on having the full range of left-wing pressure groups -- feminists, abortion and animal rights activists, labor organizers and other leftist factions -- make 'global warming' part of their message and mission. CCS is among those activist groups. This is the familiar 'crazy quilt' strategy of the Left, a long-march approach by which activists lobby states to adopt policies that cannot advance on their merits under the brighter glare of national legislating."

Under the existing Kyoto Protocol requirements, participating countries must commit to reducing their greenhouse gas emissions to five percent below 1990 levels by 2012. Thus far, 187 countries have signed and ratified the treaty. While the U.S. was a signatory, President Clinton declined to seek ratification after the U.S. Senate voted 95-0 in favor of a resolution that opposed the treaty on economic grounds. For his part, President Bush described the treaty as "fatally flawed" and also refrained from pursuing Senate approval.

Although the House narrowly passed an anti-emissions bill in June 2009 co-sponsored by Rep. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), the effort has stalled in the U.S. Senate. Majority Leader Harry Reid (D-Nev.) stripped emission limits from the most recent anti-energy scheme offered up before the summer recess acknowledging he did not have the votes. White House spokesman Robert Gibbs has suggested that it may be possible to re-insert climate change provisions into a Senate bill later this fall. But, even sympathetic policy analysts acknowledge that this is an unlikely scenario.

To be sure, free market proponents should remain mindful of the potential for legislative gamesmanship in the lame duck session, to say nothing of the EPA's extra-constitutional ambitions. But the most constructive and effective campaigns organized against environmental restrictions may be occurring at the state level, most especially in New Jersey. Lonegan, the state AFP director, suspects the "climategate" scandal that involves emails leaked to the Internet from the Climate Research Unit (CRU) from the University of East Anglia in Great Britain has given further impetus to his cause.

The electronic correspondence between researchers suggests that they were willing to falsify and manipulate data to the point where warming trends were either exaggerated or manufactured for political purposes. An investigation into the United Nations Intergovernmental Panel on Climate Change (IPCC) has also raised questions about that organization's methodology and practices. Meanwhile, over 31,000 American scientists have signed a petition that rejects the Kyoto Treaty and declares that there is no "convincing scientific evidence" that human activity has translated into dangerous levels of global warming.

"There are many credible members of the scientific community that have questioned the theory of global warming," notes state Sen. Doherty, who has been instrumental in advancing the anti-regulatory bill. "New Jersey's citizens and businesses do not need economically damaging regulations or energy based taxes that are prompted by the global warming hysteria of recent years."

Although "cap and trade" schemes remain the preferred method politicians have applied in an effort to achieve emission reduction goals, they are typically married in with other practices that restrict industrial activity. Under this arrangement, government officials set a cap or limit on how much carbon dioxide can be emitted into the air; a company can then buy or trade "carbon credits" to offset these emissions. Because the limits are set for political reasons as opposed to economic or even legitimate environmental concerns, there is a large opening for mischief and favoritism in the regulatory and legislative process.

The Institute for Energy Research (IER) recently released a study on state-level energy policy that should give consumers and policy makers pause.

"Where states get their electricity is the key to the price of electricity," Dan Simmons, IER's director of state affairs observed in a recent conference call. "Thirteen of the 15 states that have the cheapest electricity in this nation either get a majority of electricity from coal or get a majority of their electricity from hydro-electric power and the problem here is that we're not building new coal or new hydro electric power at least large hydroelectric power in the U.S. and that is a problem for electricity prices going forward."

By contrast, states that have renewable mandates and other burdensome anti-energy restrictions have electricity costs that are almost 40 percent higher than states that do not, according to the study.

State-level regulatory efforts that mimic the Kyoto Protocol began in earnest with California's Global Warming Solutions Act that Gov. Arnold Schwarzenegger signed into law almost four years ago on Sept. 26, 2006. It is much more open-ended and flexible in comparison to what has been imposed on N.J. businesses and does not spell out any regulatory directives.

Other states that took action subsequent to California have also set limits on what regulatory bodies can do without legislative consent. However, the anti-democratic impulses of environmental groups that Horner, the CEI expert, so deftly describes should caution against any suggestion that these provisos will hold over time.

In fact, several states have already joined together to form regional greenhouse gas initiatives. The idea here is to establish de-facto Kyoto regimes across wider areas as a substitute for federal legislation. This evolutionary approach to policymaking could unravel if the free market activism in N.J. gains momentum; that's why the Garden State is so strategically critical going forward.

New Jersey is part of the oldest, most restrictive and most entrenched regional greenhouse gas initiative nationwide. Most notably, the Northeastern and Mid-Atlantic states that are part of this equation have also agreed to set the only binding emissions limits in the country.

Earlier this month, AFP organized hundreds of grassroots activists who protested outside of the Regional Greenhouse Gas Initiative (RGGI) offices on 90 Church Street in Manhattan. This demonstration was timed with the latest auction of carbon permits. RGGI has also been accused of operating in contradiction to the state's Open Records Act (OPRA) by way of concealing its carbon auction activities from the public. An online investigative website called New Jersey Watchdog is filing suit against the N.J. Department of Environmental Agency seeking disclosure of RGGI activities.

"If N.J. pulls out of RGGI the whole scheme could collapse," Phil Kerpen, AFP's policy director said. "Power plants in N.J. would have a significant price advantage versus competitors connected to the same grid. It also would dramatically raise the political profile of the issue and create enormous pressure for repeal in other states. RGGI has gotten by so far by hiding its costs in the rate base so that customers do not see what they're paying and do not hold politicians accountable. The N.J. repeal fight has the potential to collapse the whole RGGI scheme."

Gov. Chris Christie has been non-committal toward AFP's efforts and his office did not respond to a call from TAS seeking comment. Even so, Kerpen believes the governor could be persuaded to come on board as public support for the repeal of anti-energy policies continues to grow.

"I think the prospects are pretty good and will become excellent if we can convince Governor Christie to join the reform effort," Kerpen suggested. "He has hesitated so far, preferring to use the funds for offshore wind and other green boondoggles. But enough pressure from conservative activists could bring him around which would give repeal a huge shot in the arm. Even with the governor on the sidelines we think if we can get hearings we can show a huge grassroots interest and possibly attract a few Democrats concerned enough about higher energy prices for their constituents to get on board the effort."

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About the Author

Kevin Mooney is an investigative reporter with free market think tanks associated with the Franklin Center for Government and Public Integrity. He has also written for the Daily Caller, the Washington Times, the Washington Examiner, NetRightDaily.com and NewsBusters.