Keeping RGGI Is Good For The Environment And Economy

by Michele S. Byers, Executive Director, New Jersey Conservation Foundation

The same week that Governor Chris Christie publicly acknowledged that global climate change is real and is at least in part human-caused, he pulled New Jersey out of the Regional Greenhouse Gas Initiative (RGGI) – a “cap-and-trade” program that attempts to address climate change.

In response, after a major advocacy effort by environmentalists, citizens and legislators, the New Jersey Legislature voted to support RGGI, an agreement with nine other northeastern states that was enacted in 2008.


Here’s how RGGI works:

  • A target “cap,” or limit, is established for certain types of pollution produced by utilities;
  • Utilities must purchase “offsets” to pay for any pollution they produce in excess of the caps;
  • Utilities that voluntarily reduce pollution may receive free “offsets”;
  • Offsets become assets that can be traded among utilities;
  • Pollution caps are gradually lowered over time to meet long-term pollution reduction goals;
  • Revenue generated from sales of offsets can be rebated to consumers, or used to fund other pollution reduction initiatives.

By state law, 60 percent of revenue from RGGI comes back to the private sector through grants and loans for energy-saving projects. Another 20 percent goes to state and local programs that reduce greenhouse gas emissions or support forest stewardship and tidal marsh restoration projects that naturally clean the air. The other 20 percent goes to reduce electricity demand and costs for low- and moderate-income residents. All of these projects contribute to the state’s economy by creating jobs.

The measures just passed by the Legislature would affirm and require New Jersey’s participation in RGGI. It remains to be seen whether this effort will ultimately keep New Jersey in the program.

Ratepayers should not expect to see lower energy bills if the state withdraws from RGGI. Already, RGGI has helped deliver energy savings to small businesses and consumers by funding efficiency and conservation programs. Pulling out would be counterproductive and could stunt the growth of our state’s emergent green economy.

Reinvestment of RGGI auction proceeds in energy efficiency and renewable energy allows cap-and-trade programs to address carbon dioxide emissions at both the supply side (power plants) and the demand side (energy use), delivering emission reductions at lower cost.

Staying in RGGI sends a critical message to our partner states that New Jersey takes climate change seriously and we are in this for the long haul. According to climate scientists, we must drastically reduce our greenhouse gas emissions below current levels just to slow down climate change.

There’s simply no evidence that RGGI has a negative impact on New Jersey’s business climate. In the long run, in fact, RGGI should make New Jersey more attractive to business by increasing energy supplies from alternative sources, reducing demand through energy efficiencies and bringing down electricity costs. And cleaner air in the Garden State means a higher quality of life for all residents.

When he announced the withdrawal of New Jersey from RGGI, Gov. Christie professed his commitment to the state’s environment. However, a recent poll of New Jersey voters shows that 47 percent of respondents said withdrawing from RGGI would be inconsistent with the Governor’s stated clean energy goals. And 74 percent agreed with the goal of expanding New Jersey’s pool of renewable energy resources, decreasing demand and keeping energy dollars in the state.

Dropping RGGI isn’t change we can believe in. RGGI is an effective program that cuts air pollution, creates jobs and provides millions of dollars for investment in renewable energy projects that will make energy cheaper – and our state more attractive to business.

Learn more at, and contact Governor Christie at or 1-609-292-6000 to urge him to keep New Jersey in RGGI.

If you’d like more information about conserving New Jersey’s precious land and natural resources, please visit the New Jersey Conservation Foundation’s website at or contact me at

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