Archive for the ‘Delaware Constitution’ Category

Nine northeastern states from Maryland to Maine sell power plant carbon dioxide emission allowances in quarterly auctions, reducing the number of allowances over time, and the allowance cost is added to electric bills.  A new study from the Caesar Rodney Institute titled “A Review of the Regional Greenhouse Gas Initiative”, finds there were no added emissions reductions, or associated health benefits from the cap and trade program.  Spending of program revenue on energy efficiency, wind and solar power, and low income fuel assistance had minimal impact.

The allowance costs added to already high regional electric bills, and the combined pricing impact resulted in a 13 percent drop in goods production and a 35 percent drop in the production of energy intensive goods.  Comparison states increased goods production by 15 percent.  The regional program shifted jobs to other states.  A national emissions tax would shift jobs to other countries.  A better policy to reduce emissions is to eliminate carbon dioxide emission taxes and regulation, and encourage innovation.

The nearly decade-old Regional Greenhouse Gas Initiative (RGGI) was always meant to be a model for a national program to reduce power plant carbon dioxide emissions.  The EPA explicitly cited it in this fashion in its now-stayed Clean Power Plan.  The program is often called a “cap and trade” program, but its effect is the same as a direct tax or fee on emissions.  That is because RGGI allowance costs are passed on from electric generators to electric distribution companies to electric consumers.

Most emissions reductions track lower generation from coal-fired power plants.  Coal’s decline began with dramatically falling natural gas prices beginning in 2009, and was accelerated by restrictive EPA regulations beginning in 2012.  Many older, smaller power plants were shut down rather than invest in expensive filtration equipment that would be needed to meet new standards. Lower natural gas prices indirectly influenced the decisions to close down the coal-fired generation.  We can parse the relative impact of these two forces and find, both nationally and in the RGGI states, EPA regulations impacted 28% of coal’s decline with 72% directly due to lower natural gas prices.

RGGI revenue expenditures had a marginal impact.  Between 2007 and 2015 low income utility bill assistance from RGGI revenue added only about $5 a year net to an existing federal program.  Grants for wind and solar power only accounted for about 1% of all the wind and solar power added by the RGGI states.   Over the same time period non-RGGI comparison states saw a 20% greater increase in energy efficiency.

New power plant construction in RGGI states didn’t keep up with closings leading to a doubling of electricity imports to 17% between 2007 and 2015.  Importing more power results in effectively exporting carbon dioxide emissions accounting for almost a fifth of the RGGI state emissions reductions.  A similar national loss of power plants could lead to electricity outages.

The United States has already reduced emissions more than the rest of the world since 2005 through innovative natural gas drilling techniques.  Emissions are down 12 percent in 2015 from the 2005 base year, about twice the rate of other developed countries, while emissions are up 45 percent in the rest of the developing world according to the European Commission in their report “CO2 time series 1990 – 2015 per region/country”.  We have many other opportunities to invest in innovation, such as, improved solar photovoltaic cells, more efficient batteries, small modular nuclear reactors, or nascent technologies that use fossil fuels without emitting carbon dioxide.

So, RGGI states exported carbon dioxide emissions and jobs.  It is one thing to export well-paying manufacturing jobs from one state with poor energy policies to another with better policies.  There is quite a more profound impact on the U.S. economy from exporting those jobs to countries with even worse emissions.  That is what a national cap and trade, or tax policy on carbon dioxide emissions would do.  The regional example has failed to show emission reductions, and there is little to show for several billion dollars in expenditures of RGGI tax revenue.  What do you know, the RGGI experiment did work as a national example of what not to do!  The RGGI states are thinking about extending the program for ten more years.  Perhaps they should kill it instead.

Link to full working paper: https://www.cato.org/publications/working-paper/review-regional-green-gas-initiative

-by Mr. Stevenson is director of the Caesar Rodney Institute center for Energy Competitiveness, and author of the Cato Institute working paper “A Review of the Regional Greenhouse Gas Initiative”

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If you missed the recent news update about the lawsuit Dave Stevenson and CRI board member John Moore filed against DNREC and former DNREC Secretary Collin O’Mara, you can read about it here.
While the ruling by Superior Court Judge Richard Stokes means Dave et. al. can proceed with the case because they have the standing to do so (a decision we expected- the state constitution says that on matters related to the state constitution and its interpretation any Delaware citizen has standing) they still have to win the case outright. Winning the case means tossing out the decision DNREC made last November when O’Mara was the Secretary- a decision to limit the number of carbon permits allowed to be sold to “polluters” in exchange for “permission to pollute”- a decision which has netted the state over $13.3 million this year from the private sector as of October 1. Losing the case means the decision stands- and DNREC’s action to limit the number of permits allowed to be auctioned for sale will cause electric companies to pay more for “polluting”, and they in turn will pass the buck to the consumers- all of us who live and/or work in the state. We believe what DNREC did was unconstitutional, and this is why Dave is the lead plaintiff in this lawsuit. Note: CRI itself is not involved in the lawsuit.
We need your help to make sure Delaware’s carbon tax vanishes. Please click here to open a PDF attachment with a letter asking your state representative to end Delaware’s participation in our cap-and-trade tax scheme. Then, mail or e-mail the letter to your representative. They may or may not listen to CRI, but all of us together can stop state agencies from raising taxes or fees on we the people whenever they feel like it, in direct violation of the state constitution!

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