December 17, 2008
Nashua Telegraph
If it’s true that the country tends to follow New Hampshire’s lead – which is the whole idea of our presidential primary, after all – then today’s auction of the right to send 1.2 million tons of carbon into the air has extra significance.
New Hampshire is participating for the first time in the 10-state Regional Greenhouse Gas Initiative (RGGI, or “reggie”), the hemisphere’s first cap-and-trade system designed to curtail the gas that most contributes to global warming.
The recession has reduced both the need and likely return from the sale, but nonetheless, the process is so new that attention remains high.
“Given that the economy is slow, emissions are down,” said Joanne Morin, climate and energy programs manager for the state Department of Environmental Services.
Still, she added, “A lot of people are watching.”
They’re watching because RGGI is the first cap-and-trade system aimed at greenhouse gases in this hemisphere, which makes it a model of practices to emulate – or avoid.
Among the interested spectators are a half-dozen Western states, including California, that have announced plans to institute some greenhouse-gas controls, plus the new presidential administration. President-elect Barack Obama has expressed interest in a sort of nationwide version of RGGI to cut greenhouse gases.
Also watching are the many critics of cap and trade, of which there are many. The political right sometimes decries the system as a hidden, unnecessary tax, while the environmental left sometimes decries it as a bureaucratic mess that won’t accomplish anything.
Europe has had a cap-and-trade system for carbon emissions for two years, although with some significant differences than the RGGI model, and so far it hasn’t done much to curtail pollution. On the other hand, the Northeast successfully used cap-and-trade to curtail acid rain.
RGGI conducted what might be considered an “alpha test” in September, when seven of the 10 states – excluding New Hampshire, New York and New Jersey – participated in the first of what will be quarterly auctions.
It did better than some had feared, with all 12 million allotments sold (each allotment allows 1 ton of carbon dioxide pollute to be emitted by a utility) at a price of $3.07 each, in the middle of the predicted price range.
Today’s quarterly auction could be called a “beta test,” since all states will participate this time, but it’s still a “precompliance” sale, because utility companies don’t have to start owning allotments to offset their pollution until Jan. 1.
The sale will involve 31.5 million CO2 emission allowances. New Hampshire will sell 1.2 million of them.
The sale has a floor price of $1.87, so New Hampshire will make at least $2.24 million – as long as all the allotments are sold, that is.
The recession has reduced energy consumption by industries, cutting the amount of electricity produced by utilities and therefore the amount of pollution they have to produce, which, in turn, cuts their need to stockpile allotments to offset carbon emissions.
Combined with the fact that RGGI has a “loose cap” – it will sell 188 million tons of CO2 annually, whereas the New England utilities generated only 150 million tons a year – and it isn’t clear how much need utilities have to buy allotments.
It’s likely that the sale price will be less than the $3.07 of September’s sale. Figures probably won’t be available until late in the week or early next week.
Partly as a result, activists are urging environmental groups to buy allotments to increase the cost of pollution.
The money from the sale is distributed to the participating states, which use it as they see fit. New Hampshire will use its money to improve energy efficiency, hoping to reduce the need for future allotments.
“Already, $1.2 million has been earmarked for the StayWarm initiative,” said Morin, talking about the volunteer effort to help low-income residents weatherize their homes. “Money (from today’s sale) will go directly into the weatherization initiative.”
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Comments by Jordan Ulery:
The Regional Greenhouse Gas Initiative (RGGI) is a tax upon you and I based upon junk science that has no correlation to reality. The goal of the tax is to reduce or limit CO2 emission by trading among producers so that they can buy and sell stock, essentially, in air.
This program is designed to punish the very people who produce electricity, power, and manufacture those things we use daily. The recent ice storm illustrated just how dependent each of us is upon electricity. The tax imposed upon the consumer can double an individual’s electricity bill in one fell swoop.
Because energy use is on a decline due to a variety of factors means that each of us is going to pay, and pay through the nose for the privilege of having a single electric light in our house. Lights and power, once the main-stay of everyman may become the status of only the rich.
The so-called science of global warming is debunked daily by thousands of scientists across the world. Common sense tells us that insignificant man has no power over God’s creation – nature. These recent ice and snow storms are perfect examples of that salient truth.
That does not mean, however, that we should not be aware of our environment and respect nature and use it wisely. To tax, literally air, is not rational nor reasonable. All the RGGI does is tax, create money to spend by the most inefficient means possible, a government enterprise.