Testimony given by Marc Brown of the New England Ratepayers Association to the NH House Science, Technology and Energy Committee on February 26, 2013 on HB 630 – repeal of NH Regional Greenhouse Gas Initiative
Thank you members of the committee. My name is Marc Brown and I am the Executive Director of the New England Ratepayers Association and I am here to offer my support for this bill on behalf of ratepayers in New Hampshire.
The Memorandum of Understanding that was signed in 2005 by participating RGGI states clearly asserts that the CO2 emission cap and trade program is “aimed at stabilizing and then reducing CO2 emissions within the signatory states”. When the program began the 2012 emissions cap was set at 165 million short tons. In fact, regional emissions in 2012 are estimated to be around 91 or 92 million short tons. RGGI’s mission has been accomplished despite its implementation being rendered superfluous.
These numbers have caused panic in the carbon trading world as carbon allowance have been selling at or near the floor price since the summer of 2010 and as much as 80% of allowances have gone unsold at some quarterly auctions. The low demand for CO2 allowances, the result of a down economy, low natural gas prices and higher gas-fired generation, has been a blessing to ratepayers. Thankfully, these market factors saved ratepayers from footing the bill for what could have been significantly more costly carbon allowances.
There is currently discussion about reducing the cap to increase the cost of allowances. Reducing the allowance cap will have a negative impact on ratepayers in New Hampshire, especially those in the lower income brackets as the cost of these allowance will be felt most sharply by those who spend a higher percentage of income on utility bills.
According to the United States Bureau of Labor Statistics, since January of 2008, when compliance with RGGI began, New Hampshire has lost nearly 12,000 manufacturing jobs, constituting 64% of New Hampshire job loss through November of 2012. New England states have lost over 98,000 manufacturing jobs or 62% of all jobs lost. Both of these numbers are significantly higher than the national average of 55%, likely a result of New England having the highest regional energy costs in the United States. Most elected officials in New Hampshire, and every other state in the region, have been talking about trying to create or save good manufacturing jobs. The data indicates that RGGI may be having a negative impact on these very jobs. Good intentions aside, we shouldn’t be continuing a policy that is harming our ability to grow the economy, especially when the market is helping us to over achieve our initial emissions goals.
Proponents of RGGI will argue that ratepayers should absorb these taxes to combat climate change. The reality is that, however you feel about climate change ideologically, capping CO2 emissions in the RGGI states will have no effect on the climate. The reduced cap would place CO2 emissions just south of 90 million short tons. The United States alone contributes approximately 6 billion short tons of CO2, meaning RGGI states are accountable for only 1.5% of total emissions in the United States and only one quarter of one percent (34 billion tons) globally. This means that CO2 reductions in RGGI states are, literally, useless. Add to the fact that the Kyoto Treaty has now expired, most major western countries are quietly walking away from CO2 caps and China and Russia have no intention of imposing any type of caps on their emissions – why are we imposing higher costs on ratepayers when we actually have hit our targets.
So why should we continue with a program which has already far surpassed its original goal? The only answer I can imagine is to keep charging ratepayers in order to subsidize the renewable energy industry and provide loan guarantees and “energy efficiency” programs to corporations. Ratepayers have rarely seen any benefits from RGGI despite bearing all the costs. The biggest beneficiaries have been companies like Dannon Yogurt and Dartmouth College – large, well funded organizations that don’t need RGGI money to pay for their energy efficiency programs.
The implementation of RGGI was bad policy. Ironically, RGGI compliance was overwhelmed by market factors that reduced the need and cost of CO2 allowances. Let’s not continue to impose higher costs on our ratepayers and our economy. It’s time to declare victory and get rid of RGGI.