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August 16, 2006


Contact: Elaine Makatura (609) 292-2994
Janeen Lawlor (973) 648-2595



(06/48) TRENTON -- New Jersey Department of Environmental Commissioner Lisa P. Jackson and New Jersey Board of Public Utilities President Jeanne M. Fox announced that New Jersey and six other states have released a set of model regulations aimed at reducing carbon dioxide (CO2) emissions from power plants. New Jersey is a participant in the Regional Greenhouse Gas Initiative, a cooperative effort by Northeastern states to reduce carbon dioxide emissions - a greenhouse gas that causes global warming.

The regulations establish a mandatory cap-and-trade program to reduce CO2 emissions from power plants, the first such program of its kind in U.S. history. The unique program relies on a market-based approach to curb power plant emissions, while at the same time promoting energy efficiency.

"Global warming is one of the most pressing environmental challenges of our time," said Commissioner Jackson. "This market-based strategy will serve as a national model for reducing greenhouse gas pollution."

"This regional approach will put us on a path to address our contribution to global warming in a way that will help to expand economic growth in our state and make us more economically competitive. The more wisely we generate and use electricity, the better our competitive position," said President Fox. "Together with our fellow Northeast states, we will have a compounded impact in reducing greenhouse gas emissions, by generating more energy with clean and renewable fuels and by using energy more efficiently in our homes and businesses."

In December 2005, the governors of seven states (New Jersey, New York, Delaware, Connecticut, New Hampshire, Vermont and Maine) reached a landmark agreement outlining the key components of a program to address global warming. The agreement established under RGGI specified that the states would work to create draft regulations, which would be subject to public meetings and a 60-day comment period. The model set of regulations reflects and incorporates many of the comments received. New Jersey will use the model rule as a starting point for writing its own regulations to implement the program.

Under the plan, regional CO2 emissions from power plants will be capped at 121 million tons per year beginning in 2009 through 2015 (a level approximately equal to 1990 emissions), and will be reduced to 10 percent below this level by 2019.

The cap-and-trade program established under the model rules sets limits on power plant emissions across the region, but does not restrict the emissions of any single power plant. A power plant must hold an emissions credit, known as an "allowance," to cover each ton of its emissions. It can purchase more allowances to cover more emissions, but since the number of allowances is fixed, there are fewer allowances remaining to cover other plants' emissions. As a result, emissions from plants across the entire region cannot exceed the regional cap.

The program outlined in the model regulations provides additional flexibility by allowing power companies to meet some reduction requirements through the use of offset credits, which represent approved emissions reductions achieved outside the electric sector. Examples of offset credits include energy efficiency measures to reduce natural gas consumption in the building sector and the capture of methane from landfills.

The RGGI plan also provides that at least 25 percent of the emissions allowances will be used to benefit energy consumers--a provision that New Jersey strongly advocated for inclusion. Under this mechanism, electric generators would purchase these allowances, and the funds generated would be used to support additional energy efficiency, clean energy technology investments and consumer rebates to protect low-income consumers. New Jersey has stated its intention to dedicate a significantly larger portion of allowances to support consumer benefits.

These regulations and New Jersey's participation in RGGI reflect New Jersey's ongoing commitment to improve air quality and reduce pollution. In December 2005, New Jersey adopted new rules to reduce ozone, fine particles and toxic air pollution by establishing new, cleaner vehicle emission standards. The vehicle emission rules adopt the California Low Emission Vehicle standards for CO2, and apply them to new vehicles delivered for sale in New Jersey starting Jan. 1, 2009. Automobiles are also significant contributors of greenhouse gas emissions.

Global warming is a serious threat to New Jersey, with projections forecasting average temperature increases between two and 10 degrees Fahrenheit by 2100. Such severe climate change would contribute to air quality problems by exacerbating smog and ozone.

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Last Updated: August 16, 2006