Failure of Federal Climate-Change Bill May Leave NJ at Competitive Disadvantage
The collapse of efforts to pass climate change legislation in the U.S. Congress left many clean energy advocates disillusioned,
but it was doubly disappointing here in New Jersey where residents and businesses already are footing the bill to reduce
greenhouse gas emissions.
With New Jersey embracing cleaner technologies like solar and offshore wind power, some analysts suggested the higher costs
reflected by those alternative energy sources are turning up in electric bills. The prospect of even higher utility costs because
of national climate control legislation may have doomed the bill in a year with a weak economy and mid-term elections in Congress.
"Given the current economic climate, there is some apprehension about aggressive green energy goals which could drive up
electricity costs, said Paul Patterson, an energy analyst with Glenrock Associates in New York. "People are counting their nickels
and dimes and green energy is not excluded from that consideration."
Cap and Trade
Last week, Democrats in the Senate said they would give up on a goal of passing global climate legislation involving a cap-and-trade
system to limit greenhouse gases this summer. While there is some talk of trying to get a bill passed before November or in the
lame-duck session, the failure to act in the wake of the nationís worst oil spill in the Gulf of Mexico angered some.
"Itís a significant setback," said Dave Pringle, campaign director for the New Jersey Environmental Federation. "You would think
with the Gulf situation, it would have been an impetus, but it seems to have been an impediment."
New Jersey joined with 10 other northeastern states to regulate greenhouse emissions, setting up a program to limit carbon dioxide
emissions from power plants, which took effect last year. The voluntary system uses a cap-and-trade system where utilities trade
allowances to emit greenhouse gases, the cost of which eventually ends up in consumersí bills.
Environmentalists and others have praised the regional program, but noted a nationwide effort is needed because other neighboring
states not participating in the program end up running older, more polluting power plants more frequently. Those plants can offer
their energy at lower prices because they do not pay the carbon tax, a problem which has been dubbed "leakage."
Assemblyman Upendra Chivukula (D-Middlesex), one of the leading energy experts in the New Jersey legislature, noted Pennsylvania
and other states in the Midwest can offer electricity from coal plants at a cheaper price than the generating stations in New
Jersey and elsewhere because they are not part of the regional initiative.
"We are getting a lot of dirty energy from those states," Chivukula said. "Without a nationwide program, we have no answer for leakage."
In the future, New Jersey ratepayers may question why the Northeast states are going it alone, clean energy advocates warned. "In
the next year or two, if we donít break this logjam in Congress, it could cause a backlash in New Jersey for sticking our necks out,"
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