One of the advantages of a federal system is that states can act as laboratories. A policy can be tried in one state (two-year community colleges in CA, gay marriage in Massachusetts, assisted suicide in Oregon) and if it works, other states or the national government might adopt the same policy.
Cap and trade, now so unpopular that President Obama no longer advocates it, is already working to reduce greenhouse gases in ten states. That’s right--it really does work. All six New England states, New York, New Jersey, Delaware, and Maryland are members of the Regional Greenhouse Gas Initiative, or RGGI. Where’s Pennsylvania? It is an “observer,” along with three Canadian provinces.
Permits for emissions from large power plants were auctioned in 2008, and RGGI is now in its first three year compliance period. There have been nine auctions so far, and the states have made $729 million. The money is supposed to be used for energy conservation and renewable energy.
Cap and trade uses the free market to reduce pollution by setting a limit on the amount of emissions. If a company goes over its allowance, it may buy pollution credits from another company. Companies have an economic incentive to reduce pollution, and every few years the overall emission totals are reduced, making the credits more valuable.
California is poised to adopt more stringent cap and trade regulations than RGGI. The problem with adopting cap and trade by state or region is noted in an article in today’s New York Times. A polluting industry can simply move out of state.
Amazingly, cap and trade was originally a REPUBLICAN idea. According to Governing magazine, however, 86 of the 100 freshmen Republicans elected to Congress in November are opposed to any climate legislation that would increase government revenue. How can this many stupid people be elected in one year?
The RGGI program is complicated, but you can read more about it in the December issue of Governing or check out the official RGGI website at <www.rggi.org>.
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