June 23, 2007
New Jersey To Cut Greenhouse Gas Emissions

The New Jersey legislature has passed legislation that will require the New Jersey economy to cut greenhouse gas emissions and Governor Jon Corzine says he will sign it into law.

Under the new law, greenhouse gas emissions generated by every aspect of the state’s economy, not just electricity-generating stations, will have to drop about 13 percent, to 1990 levels, by 2020. The bill further requires that emissions be capped at 80 percent of 2006’s levels by 2050.

Whether the federal government will allow state governments to regulate emissions of CO2 and other gases for the purpose of avoiding climate change remains to be seen. California and a few other states have also adopted laws for greenhouse gas emissions reduction but none go as far as New Jersey's.

The eventual cap at 80% of 2006's level by 2050 is probably easier to achieve than the 13% reduction by 2020. Technologies developed in the 2010s and 2020s will greatly lower the costs of a switch to nuclear, solar, biomass, geothermal, and wind power.

The longer range goal is also easier to achieve because it is easier for energy-intensive industries to migrate out-of-state in the longer run. Companies can make plans to stop enhancing capital plant and not to initiate new plant construction, for example. Notably, this new regulatry policy will probably gradually drive much of the chemical industry out of the state.

If the US federal government allows individual states to enforce their own greenhouse gas emissions regulations then expect business executives to invest more in states that are big coal producers. Why? Because the states that are big coal (and oil and natural gas) producers have governments that favor the continuation of fossil fuels resource extraction and use. We see this in national politics where Barack Obama of Illinois favors federal subsidies for coal-to-liquid plants for example. West Virginia, Kentucky, North Dakota, and Wyoming all make good bets for energy intensive industries that want to avoid state-level green house gas emissions regulations and taxes.

What I want to know: Even if states gain some legal standing to regulation greenhouse gas (GHG) emissions how will that play out with electric power purchased across state lines? If, say, New Jersey requires a big reduction in GHG emissions in electric power plants can the state regulate utilities to require even out-of-state electric power brought into the state be made from plants that emit fewer GHG? My guess is the US constitution's Interstate Commerce Clause will pose an obstacle for that sort of regulation and therefore coal states like West Virginia and Kentucky might become big electricity exports to New Jersey and other northeastern states that also regulate GHG.

I'm especially interested in how this gets applied to the electric power industry because at a national level electric power accounts for 39% of total energy-related carbon dioxide emissions.

The data in Table 11 represent estimates of carbon dioxide emissions for the electric power sector. These emissions when taken as a whole account for 39 percent of total U.S. energy-related carbon dioxide emissions; in calculating sector-specific emissions, electric power sector emissions are distributed to the end-use sectors.

What I also want to know: How much is this law going to cost? Already New Jersey's electricity costs 12.8 cents per kwh as compared to coal-burning West Virginia at 6.2 cents per kwh or less than half New Jersey's cost. The people of New Jersey could find themselves paying New York prices (16.19 cents/kwh) or even Connecticut prices (18.51 cents/kwh - ouch). Though perhaps nuclear and wind power will put a ceiling on medium term electricity price rises.

Also see my post California Bill To Cut Greenhouse Gases 25% By 2020.

Share |      Randall Parker, 2007 June 23 04:03 PM  Climate Policy

Fat Man said at June 23, 2007 8:38 PM:

No more dumping bodies in the meadowlands.

morpheus said at June 25, 2007 10:32 PM:

what this gay talk here lately about

this emisions?:),

like somebody said befores, those who are stuck with co2 and grehouses gases, obviusly have no clue in life:)

and about what is really important

just like some feagot animals lovers wowossys, that have nothing better to do, then so to save some fakin

toed species from same fakin jungle in africa or somthings,



Innovation Catalyst said at June 28, 2007 9:54 PM:

New Jersey also has some of the best incentives for solar photovoltaic construction, over $5/watt.

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