New Jersey Governor Announces Withdrawal from RGGI

By Julia Ciardullo

On May 26, 2011, New Jersey Governor Chris Christie announced that New Jersey will withdraw from the Regional Greenhouse Gas Initiative (“RGGI”) by the end of the year.  RGGI is a regional cap-and-trade system encompassing 10 Northeast and Mid-Atlantic states.[1]

Governor Christie’s authority to withdraw arises from the Memorandum of Understanding (“MOU”) signed by the governors of the participating states.  Section 5B of the MOU provides that, “[a] Signatory State may, upon 30 days written notice, withdraw its agreement to this MOU and become a Non-Signatory State.”

However, the process for withdrawal does not end with Governor Christie’s announcement.  As required by the MOA, New Jersey adopted administrative rules for the state’s component of the CO2 Budget Trading Program (N.J.A.C. 7:27C).  To repeal this rule, the appropriate agency must give at least 30 days’ notice and afford all interested persons a reasonable opportunity to submit comments (N.J. Stat. § 52:14B-4). 

The more interesting question is what will happen to A-4559, the law adopted by the New Jersey State Legislature to implement RGGI (codified at P.L.2007, c.340).  Despite New Jersey’s technical withdrawal from RGGI, A-4559 would remain on the books unless the New Jersey State Legislature took action to repeal it.

Governor Christie’s announcement is not the first time New Jersey politicians have threatened to withdraw from RGGI.  Earlier this year, Republican members of the New Jersey State Legislature introduced legislation – S-2250 in the Senate and A-3147 in the Assembly – that would not only repeal the relevant provisions of A-4559, but would also repeal the “Global Warming Response Act” (codified at P.L.2007, c.112), which requires the state to reduce greenhouse gas emissions 20 percent by 2020 and 80 percent by 2050.  Passage of S-2250 and A-3147 would secure New Jersey’s withdrawal from RGGI, making it more difficult for future politicians to restore the state’s participation.

Two Democratic Assemblymen, John F. McKeon and Upendra J. Chivukula, have indicated that within the next several weeks, they intend to propose legislation that would revoke the Governor’s authority to withdraw from RGGI.

Governor Christie’s announcement comes less than a month after the New Hampshire Senate voted to remain in RGGI.

[1] Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

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