RGGI Funding Plan Will Be A Green Investment For NJ

Environment New Jersey

Trenton, NJ — Three New Jersey state agencies today jointly announced the final Regional Greenhouse Gas Initiative (RGGI) Strategic Funding Plan which will guide the disbursement of dollars from New Jersey’s first participation in a RGGI auction in close to a decade. New Jersey officially rejoined the RGGI program on January 1, directly following Gov. Phil Murphy’s Executive Order 7 directing the state to rejoin the program. The agencies are the NJ Department of Environmental Protection (NJDEP, NJ Board of Public Utilities (NJBPU) and NJ Economic Development Agency (NJEDA).

“RGGI clean energy investments have never been more needed. These funds are a green economic stimulus for New Jersey and provide a hefty down payment on electrifying diesel trucks and vehicles across the state,” said Doug O’Malley, Director of Environment New Jersey. “The RGGI program has allowed our neighboring states to invest in a clean energy economy for more than a decade and reap the benefits of reducing carbon pollution from our power plants and investing in clean energy solutions. Especially amidst the COVID-19 crisis, we need to make investments that further public health and expand the clean energy economy.”

The final $80 million plus RGGI Strategic Funding Plan follows the directives of the Global Warming Solution Fund legislation, which divided up RGGI revenue with 60% dedicated to NJEDA for investments in the commercial and industrial sector, 20% dedicated to BPU with a focus on low-income communities, and 20% dedicated to NJDEP (divided equally between assisting towns and sequestration measures).

Seventy-five percent of the estimated annual $80 million plus in funds will focus  primarily on investing in electrification strategies for the transportation sector with an emphasis on environmental justice communities and investments in electrifying NJ Transit buses and infrastructure, electrifying medium and heavy-duty diesel vehicles, like sanitation and drayage trucks and vehicles at the Port of Newark and Elizabeth, and expanding EV charging stations via the Pay To Plug In Program. The remainder of the $80 million plus will be divided between the creation of a Green Bank (housed at NJEDA) and carbon sequestration/adaptation projects (housed at NJDEP).

According to O’Malley, the plan announced today charts a future where the clear skies of our state could be spurred by electrification of our vehicles as opposed to the stay-at-home orders of a pandemic. This is multi-agency climate step for the Murphy Administration. However, it will be critical to supplement RGGI dollars by maintaining investment in energy efficiency programs, especially through Comfort Partners for low-income communities as part of the Clean Energy Fund to ensure that energy efficiency and electrification for low-income communities are equally prioritized. These funds can also be used for deep home retrofits which will be crucial both for energy efficiency companies and non-profits to continue this work after stay-at-home orders are lifted and to ensure direct energy efficiency assistance for communities in need.

The creation of a Green Bank – and the funding to capitalize the initiative – brings New Jersey in line with other leading clean energy states and provides a critical public-private partnership to spur investment in clean energy technologies during a moment of severe economic contraction.

Former Gov. Chris Christie pulled the state out of the program in 2011. Gov. Murphy promised to rejoin the RGGI program as a common-sense program to help the state reduce carbon pollution and invest in New Jersey’s clean energy future.

O’Malley said it is critical the RGGI funds be put to work immediately to spur investments. The electrification technology focus, with coupled with the Volkswagen Settlement dollars, will New Jersey on the map for moving to electrify every part of its transportation sector. The climate crisis for our communities is not going to wait and today’s funding means a green stimulus to spur emissions reductions across the state, especially for transportation.

The RGGI program has gotten much stronger over the past 8 years and other states, including New Jersey, have reaped the benefits, with more than $773 million in consumer savings through energy efficiency and $5.7 billion in health benefits. In RGGI states, carbon emissions from fossil fuel power plants have been reduced by 50 percent since 2005 with $3 billion in net economic benefits, including the creation of 30,000 more jobs. In New Jersey alone if we didn’t rejoin the program, we would lose out on more than $500 million in clean energy investments. RGGI is the program that shows we can expand our clean energy economy and reduce carbon pollution.

RGGI was formed through bipartisan cooperation in the depths of the Bush Administration inaction on climate during the 2000s. Gov. George Pataki (NY) and Gov. Mitt Romney (MA) helped to build support for the program and New Jersey initially joined the program under Gov. Jon Corzine in 2008. During the program’s existence, New Jersey has been the only state to pull out. Subsequently, there was bipartisan agreement from states to strengthen the program. Virginia is joining the agreement, which will further  strengthen the program, and Pennsylvania is taking steps to join. Seven plus years after the destruction from Hurricane Sandy in New Jersey and New York, the need for climate action couldn’t be clearer According to a Union of Concerned Sciences study, more than 20 New Jersey towns, primarily along the Shore, will face coastal flooding severe enough in 17 years (2035) to cover 10% of their town’s land mass once every two weeks.

Environment New Jersey, in the immediate aftermath of Gov. Christie’s decision to unilaterally pull us out of the program, filed litigation with the New Jersey Superior Court, arguing that the Governor had illegally pulled us out of the program. In March 2014, the court agreed with our lawsuit and required Gov. Christie’s administration to follow a regulatory process. In the resulting public hearing at NJDEP, there was overwhelming public support to stay in the program, which was ultimately ignored by the Christie Administration.

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