Council’s Eastern Regional Energy Summit Concludes on High Note

NEW BRUNSWICK, N.J.—Organizers and participants in the nation’s only working cap-and-trade program for carbon emissions called the fledgling attempt to reduce greenhouse gas emissions a success Wednesday during the Council’s Eastern Regional Energy Summit at Rutgers University in New Jersey.

Jeanne Fox, the head of New Jersey’s Board of Public Utilities, said she hopes the Regional Greenhouse Gas Initiative will soon fall victim to its own success.

The original idea was to serve as a national model for reducing the greenhouse gas emissions many scientists blame for global warming, she said, noting that the U.S. House now is considering legislation to create a similar national program.

“It’s working,” said Fox, a member of the initiative’s board of directors. “We’ve succeeded in creating a program that shows cap-and-trade can work nationwide. It’s a model for what they can do in Washington.”

The 10-state initiative is preparing to hold its fourth auction of carbon credits June 17 for more than 200 power plants that rely on fossil fuels, such as coal, oil and natural gas. The first auction was Sept. 25. Regional groups now are exploring similar initiatives in the Midwest and West.

The goal has been to provide a financial incentive for power plant owners to embrace conservation, without placing themselves at a competitive disadvantage to companies that do not invest in new technology that emits less carbon.

Cap-and-trade programs achieve that goal by limiting carbon emissions and establishing a price for them in the form of offset credits. Power plant owners that spend the money needed to curb pollution or embrace renewable energy sources receive credits that can be sold to those who do not, Fox said.

Ralph Izzo, chief executive officer of Public Service Enterprise Group Inc. (PSEG), said investors would be wary of utilities at the forefront of conservation efforts without the financial framework provided by the regional initiative. PSEG owns New Jersey’s largest utility. “It enables the industry’s good citizens to do the right thing,” Izzo said.

The Regional Greenhouse Gas Initiative includes Connecticut, Delaware, New Jersey, New York, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island and Vermont.

New Jersey Gov. Jon Corzine said the initiative is not perfect but is off to a good start. He spoke at the opening of the Summit Wednesday on energy efficiency and the regional initiative at Rutgers University.

“It’s the only real cap-and-trade program that is operating in this country,” Corzine said. “It’s not perfect—I think it (excludes) far too many carbon producers—but it’s off to a good start.”

The governor’s energy master plan calls for a 25 percent reduction in greenhouse gas emissions and 20,000 green jobs in New Jersey by 2020, Corzine said. It also calls for 20 percent of the state’s energy to be generated from renewable sources, such as wind and solar.

Fox said the next step for the regional initiative is to extend the cap-and-trade program beyond power plants to other carbon emitters, such as the transportation sector, which accounts for about 37 percent of New Jersey’s greenhouse gases. Power plants generate about 15 percent, she said.