The New Hampshire House has voted by an overwhelming margin to end the state’s cap-and-trade program. The 246-104 vote approved a halt to the state’s participation in the Regional Greenhouse Gas Initiative (RGGI). The RGGI calls for Northeastern states to reduce pollution and certain emission levels or join in an auction to bid for carbon dioxide credits.
Senate Republicans an Obstacle
The bill now moves to the Senate, where its fate is uncertain. Two looming obstacles are Senate Energy and Natural Resources Committee Chaif Bob Odell (R-Lempster) and Senate President Peter Bragdon (R-Milford). Odell and Bragdon were cosponsors of the 2008 legislation authorizing New Hampshire to join the RGGI.
“You don’t have to believe in global warming to believe RGGI is a good idea,” said Bragdon in the Feb. 28 Concord Monitor. “It helps to encourage a diversity of fuel sources for our state.”
New Hampshire voters, however, voiced strong opposition to excessive government regulation in the November 2010 elections, and other states have introduced similar legislation to renounce climate pacts.
Grant Bosse, lead investigator for the Josiah Bartlett Center for Public Policy, a New Hampshire independent public policy organization, said his organization’s study of RGGI system revealed many flaws.
“Our study found two significant challenges with the RGGI program,” said Bosse. “First, the market for credits has plummeted. The price has dropped to its reserve price of $1.86, and only 57 percent of the available credits sold at that price in the last auction.”
The weakening in the government-created market indicates participating states could have difficulty selling their credits—and recouping their investments—in year three of the program, Bosse explained.
“Second,” he continued, “the revenues from the RGGI program in New Hampshire have been handed out to a number of private groups that could certainly afford to upgrade their own energy systems.”
Examples of such taxpayer-funded subsidies include Stonyfield Yogurt and Dartmouth College, Bosse said.
Cap-and-trade programs, either at regional or national levels, ought to be abolished, says Clint Woods, director of the energy, environment, and agriculture task force of the American Legislative Exchange Council.
“EPA’s regulatory train wreck and regional cap-and-trade programs rank as two of the biggest threats facing economic recovery and electric reliability,” Woods said. “ALEC is strongly opposed to regional or national cap-and-trade programs. They drive up energy costs for those least able to afford it, reduce state competitiveness, and represent an unacceptable intervention in our affordable energy marketplace.”
Other states throughout the nation are likewise questioning the sensibility of regional cap-and-trade pacts. Woods says the Western Climate Initiative and the Midwestern Greenhouse Gas Reduction Accord are dying slow deaths as states move to pull out.
“This move by New Hampshire’s legislature is in line with a broader questioning of these climate pacts across the United States,” Woods said. “Legislation to repeal participation in a regional climate initiative has been introduced in seven states besides New Hampshire: Connecticut, Iowa, Maine, Minnesota, New Mexico, Oregon, and Washington.”
Subsidies to Special Interests
One common reason many states are reconsidering regional cap-and-trade participation, syas Bosse, is wasteful spending of revenue generated by cap-and-trade programs. The cap-and-trade programs raise state energy prices, but the fees collected by the states to somewhat offset the price increases are being handed out to special interests and otherwise spent in a questionable manner.
“After reading our findings” about cap-and-trade revenues being distributed as subsidies to private and profitable organizations, “many lawmakers are questioning if we’re spending RGGI revenues wisely,” said Bosse.
Cheryl K. Chumley ([email protected]) writes from northern Virginia.