Gary Lambert, a Republican state senator in New Hampshire, is responding to Dan Morain's May 27 column "Can market for clean-air credits resist profiteers?" In his column about California's cap and trade program, Morain wrote: "California has an alliance with Quebec to create a market in which emission credits will be bought and sold, overseen by a nonprofit headquartered in Delaware. Goldman Sachs will be involved. What could possibly go wrong?"
Don't fear a market-based approach to cutting greenhouse gas emissions. We've been doing it on the East Coast for years, and it works just fine.
In his column Dan Morain asks questions about the emissions trading program being created in California under AB 32, the Global Warming Solutions Act. But he doesn't mention that many of these questions have already been answered in the Northeast, and over the past several years, by Californians preparing the groundwork for carbon trading. Far from being a mysterious program, the Regional Greenhouse Gas Initiative, or RGGI, a market-based program for the Northeast to reduce greenhouse gas emissions from power plants, has proven to be straightforward and successful.
As a Republican state senator in New Hampshire and as a business owner I support RGGI, because it is good for the economy, good for jobs and good for the environment. An independent study of the RGGI states has found that our region is on track to enjoy $1.6 billion in economic growth because of this program. That includes the creation of more than 16,000 net jobs. The verdict is also in when it comes to our program's impact on the environment. Average annual CO 2 emissions have fallen by 23 percent compared to emission levels before the start of the program in our region.
RGGI like California's emissions trading program under AB 32 harnesses the power of the market to put a dollar value on something that society is usually forced to absorb and pay for: greenhouse gas pollution. However, both programs recognize that emitters, not regulators, should decide how to meet targets in whatever way makes the most economic sense.
In California, the utilities, oil refiners and others covered under the state's cap and trade program understand better than the state how to most cost-effectively cut emissions. RGGI and AB 32's emissions trading program ensure that businesses remain in the driver's seat when it comes to their own operations.
In the Northeast, each RGGI state has decided to use the money generated from sales of greenhouse gas emissions allowances to boost energy efficiency, to spur investment in renewable energy, to close budget shortfalls or to fund other emissions-cutting projects. By investing in emissions-cutting projects, California, like the Northeast, can produce positive economic results.
Market-based emissions trading programs originated as a Republican concept. Such programs have been used successfully to address acid rain nationwide and to tackle nitrous oxide emissions in the Northeast. Both RGGI and AB 32 provide a common-sense, market-friendly method for cutting pollution.
RGGI has been good for the state of New Hampshire. A market-based solution that cuts costs for business while reducing greenhouse gas emissions can also be a good thing for the state of California.