N.J. enacts far-reaching greenhouse gas standards
Demands 80% emissions drop by 2050; how to do it remains uncertain
BY CHRIS GAETANO
Staff Writer

New Jersey residents have heard it all before. Their home state has been called everything from "the armpit of America" to the "landfill of opportunity," all while being asked, repeatedly, "So, what exit?"

On July 7, however, it was the Garden State that got the last laugh as Gov. Jon Corzine signed into law the most stringent greenhouse gas legislation in the country.

The Global Warming Response Act seeks to dramatically reduce the amount of greenhouse gases coming from New Jersey in order to stave off the negative effects of global warming. By 2020, emissions should be reduced to pre-1990 levels, and by 2050 they should be cut by 80 percent of 2006 levels.

Exactly how this will be done, whether through an emissions voucher program, a cap and trade system, a carbon tax, or some other option, has been left open-ended in the legislation, with the specifics to be figured out by various state agencies within the next few years. Supporters praised this lack of specific prescriptions, seeing it as a way to maintain flexibility in order to confront a multi-faceted problem.

"It doesn't prescribe how to get from today to 2050. I think that's the best part of this thing - what we don't want is the government prescribing how you do it, picking technological winners. The government has no experience in this," said Chris Miller, an energy expert with Greenpeace. Miller went on to say that the open-ended nature of the global warming bill allows for a more market-oriented solution to be sought. "The same is true at the federal level for fuel efficiency standards for cars. Congress posts a target, it doesn't say, Detroit, make X number of hybrids."

This same open-ended approach, however, was called arbitrary by members of the New Jersey Business and Industry Association, which opposed the legislation. Sara Bluhm, the organization's energy specialist, said that the bill's passage will end up hurting the consumer through higher utility rates.

"If we're putting new policies on them [power companies], they're going to have compliance costs which, realistically, are going to be passed on [to the ratepayer]," said Bluhm.

Paul Rosengren, a spokesperson with the Public Service Enterprise Group (PSEG), the state's largest electricity provider, agreed that utility rates could go up as a result of implementing this law, but said that harm from such a turn of events can be mitigated with work from both the public and private sector.

One way, he said, was through the research into newer, more efficient technology that can help bring costs down. The company has already proposed a $100 million loan program that would help expand and improve solar energy, which he said is currently more expensive than traditional fossil fuels. Another suggestion was the implementation of a cap and trade system, which allows companies to redistribute emissions costs on the open market while still staying below the total emissions standards set by the government. Rosengren also said that higher prices might encourage more people to think in terms of energy conservation, which he noted has always made economic as well as environmental sense.

"Conservation makes economic sense now in many cases and people just are not necessarily making the most cost-effective decisions. It makes sense to switch from the old traditional bulbs to the new [fluorescent] ones ... so there may be some need for incentives to have people make the right decisions," said Rosengren.

With this in mind, Bluhm and her associates in the private sector feel that this law will negatively impact New Jersey companies through rate increases, as business owners already pay very high utility costs. During her testimony before an Assembly committee debating the legislation, she said that New Jersey industries pay the fourth-highest electric bills in the country.

Greenpeace's Miller, however, said that the law could well be a boon to the state's economic health, and it would not be wise to underestimate New Jersey's ability to be an example for other states and the federal government. With global warming becoming a more visible issue across the nation, he said that it is likely that a set of federal standards is not far behind, and when these are passed, New Jersey will have already been in the process of adapting for years while other areas might be struggling to catch up.

"I think most who watch this issue now understand that it is likely that the Congress will pass some sort of a cap over the next year or two, and I think what this does is put New Jersey ahead of the curve. New Jersey will be, once the federal government passes a cap, ahead of the game," said Miller. "Far from this being a weight on business and industry, I think this will give New Jersey a competitive advantage."

Climate change's effects in N.J.

Slowing down global warming may have other, more indirect, economic advantages for the state, especially along the shoreline. According to a DEP report in 2004 called "Holocene Sea-Level Rise in New Jersey," overall sea levels are rising at a rate of 3 millimeters a year, with about 1 to 2 millimeters being attributed directly to human involvement. Rising sea levels are generally viewed as disruptive to the economy, though Patrick O'Keefe, executive vice president of the New Jersey Builders Association, said that he has not heard reports of this being a major concern to people investing in land.

While utilities have attracted much attention in discussions of this bill, measures taken to combat global warming may need to have cars and other modes of transportation be a central focal point of emission reduction efforts. According to data from the federal Environmental Protection Agency, transportation accounted for 49 percent, or 61.45 million metric tons, of all New Jersey's total carbon dioxide output in 2003, the date of the last inventory. This dwarfs the output of electric power, which stands at 14 percent of total tonnage.

The other two states with greenhouse gas emissions caps have similarly high percentages in the transportation sector. In California, it accounts for 59 percent of total carbon dioxide emissions, a little higher than Hawaii's 54 percent. Many other states place electric power at a higher share of total emissions.

State, companies must cooperate

New Jersey's bill has been touted as the toughest in the nation - according to Assemblywoman Linda Greenstein (D-Middlesex/Mercer), only this state's global warming measure looks so far into the future. Funding the implementation of this law was a point of contention during the time it spent in the Legislature. Originally, a fund supported by the major emissions producers was going to fuel all efforts in executing whatever measures were found to be necessary, but this was taken out after protest from the business community. Now fees can be leveled on a case-by-case basis, in line with much of the bill's open-ended character.

Greenstein said that the state will act as an enforcer for the emissions cap and will constantly be monitoring the progress in reducing greenhouse gases in New Jersey's atmosphere, but that it will take a joint effort between the public and private sector to come up with lasting solutions.

"I imagine that the state will work hand in hand with the companies, but I think the companies will play a large role on how they will get to that place," Greenstein said. She went on to say that a close relationship between companies and the state is also needed to insulate consumers from sudden price increases.

Starting the process

With the bill's passage into law, the DEP will begin working out the specifics for the best way to tackle the problem of greenhouse gas emissions. The first order of business is to put together a complete greenhouse gas emissions inventory of 2006 and 1990 to act as a guide from which the state can work. This inventory is expected to be completed by the end of next year. By June 30, 2008, the DEP, the Board of Public Utilities, the Department of Agriculture and the Department of Community Affairs will make a report on specific recommendations for reducing greenhouse gas emissions to pre-1990 levels. By New Year's Day in 2009, the DEP is scheduled to have constructed a mechanism through which progress on whatever recommendations were adopted can be monitored, with reports published every two years. By 2010, the state is expected to release recommendations on meeting the 2050 emissions goal.

By 2015, the impact of the program on both an environmental and ecological level will be assessed. It is expected that by 2012, 4 percent of all energy sold in the state will come from renewable energy sources.

While there might be disagreement over how exactly the new law will change things within the state, there is little doubt that things will, indeed, be different when it is implemented.

"What's certain is, we know the state has an open-ended greenhouse gas emission policy and we don't know what they'll be doing, but we do know electric prices will go up as a result," said Bluhm.

"This bill, now law, is going to force companies and others to reduce energy use to be more efficient and to essentially be cleaner and greener; [it] is to have an effect beyond simply CO2 emissions. ... To the degree we reduce energy use, this would be good for public health," said Miller. "Let's be honest, if politicians in New Jersey thought this would destroy the economy, this would not be signed into law."