Peter Rothstein is President of the New England Clean Energy Council and has many years of venture, entrepreneurial, executive and deal experience across the cleantech venture market.
Personality outdid policy when Governor Chris Christie announced his intention to withdraw New Jersey from the Regional Greenhouse Gas Initiative (RGGI), a multi-state climate and energy program that is a bipartisan model for using the market to reduce energy costs, reduce air pollution from fossil fuels, and stimulate the clean energy innovation economy. The news coverage focused on politics instead of policy, leaving untold one simple truth: RGGI works, and has been a resounding success.
Even a quick examination of the benefits of RGGI reveals how effective this program has been. The market-based RGGI program has contributed to reduced emissions from power plants burning fossil fuels, as well as increases in energy efficiency, job creation and economic development. On a dollar-for-dollar basis, RGGI is a winner across the board, with ratepayers benefiting from investments in energy efficiency and other clean technology programs that provide $3 to $4 in savings for every $1 invested, thereby sparking local economies.
What is especially frustrating about Governor Christie’s announcement is the claim that his decision comes in response to, among other areas, concerns from the business community. Yet when we talk to business owners, executives and entrepreneurs in the clean technology space -- likely to be the next big economic development sector for our country -- I hear the exact opposite message. Indeed, they voice steady support for RGGI and keen disappointment that Governor Christie would fail to appreciate the value of this market-based program.
RGGI is part of a suite of policies enacted throughout the Northeast -- including Renewable Portfolio Standards, energy efficiency and more -- that has enabled the creation of new clean energy businesses and jobs in this growing innovation sector. The result? The energy efficiency and clean energy sectors are among the fastest-growing industries in the nation, and RGGI states have effectively positioned themselves as an attractive region for clean technology innovation, manufacturing and deployment. Clean energy has the potential to be the 21st century’s largest global industry, with hundreds of innovative companies across the Northeast working around the clock to develop new technologies, bring cost-effective clean energy solutions to market, and grow their companies, jobs and the regional economy.
Governor Christie’s announcement is a setback to these entrepreneurs who look at environmental, renewables and efficiency targets as market signals for their investments and efforts to grow their companies. They recognize that the multi-state agreement delivers positive benefits for their companies and states, as well as improved energy and climate security. They recognize that RGGI’s modest utility charges are in fact investments in our region’s energy system, enabling us to avoid having to pay far more for costly new power generation facilities.
RGGI has been accused of being a tax, but when used as designed, RGGI is an electricity efficiency fee. Most states require this utility charge to be invested in initiatives that positively impact our use and generation of electricity. That’s why so many in the industry recommend improving RGGI to eliminate diversions of RGGI funds into general funds as New Jersey recently did to balance their budget.
Legislators in Maine, Delaware, and New Hampshire have heard what many New Jersey legislators are now hearing and understand: that RGGI still makes sense for them. If New Jersey does follow through on the Governor’s poorly considered intention, RGGI would go on without New Jersey. RGGI will continue to be a valuable part of the New England and Northeast states' portfolio of clean energy programs, providing substantial net economic benefits across the region, and remain a strong signal for business investment. But New Jersey and the regional pact would greatly benefit from New Jersey’s continued participation.