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Koch Brothers Fund Assault on Climate Legislation, Seek To Destroy RGGI

This guest post comes from the eloquent and thoughtful Patriot Daily News Clearinghouse.

After DC failed to enact comprehensive climate change legislation, it was good to see states take the lead on regional cap-and-trade programs. We now have 3 regional initiatives to address greenhouse gas emissions (GHG) involving more than 30 states. That so many states are involved shows that people want to address climate change. One regional program has been operative since 2008 and the other two are scheduled to commence operations next year. The operational program has been effective in reducing GHG emissions as well as providing economic benefits and jobs from the over $861 million raised from allowance proceeds. Thus, we now have a model for federal legislation that can incorporate what is actually working and tweak any shortcomings.

Except now the climate deniers are in a war to nix these existing cap-and-trade programs. Campaigns by familiar climate denier groups partially funded by Koch brothers have convinced some states to withdraw from the existing operational program and the programs scheduled to commence operations next year. True to their hypocritical denier advocacy, the Koch brothers work to end the very same cap-and-trade program in which they are participators in order to ensure their competitors do not gain an advantage over them.

The first mandatory cap-and-trade program was established in 2005 with the Regional Greenhouse Gas Initiative (RGGI) in the Northeast established by governors of 7 states: Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont.  The membership grew to 10 with the addition of Massachusetts, Maryland and Rhode Island in 2007.

There are several regional initiatives or accords programs to address GHG emissions involving more than 30 states as active participants or observers. Observer membership allows the state to remain informed about the initiative but it is not required to comply with the initiative.  States may move from observer to participant status after establishing state policies.  

RGGI is the only cap-and-trade program operating in the U.S. It requires member states to cap carbon dioxide emissions from power plants, auction emission allowances, and then proceeds are invested in building a clean energy economy.

RGGI has already shown that the economic skies don’t fall down as climate deniers claimed that cap-and-trade programs would be bad for our economy. Since its first online auction in 2008, RGGI has raised more than $861 million by auctioning these allowances. Each state decides how to invest its share of allowance proceeds, but generally the states have decided to improve energy efficiency, focus on renewable energy technologies and provide energy bill assistance to low-income ratepayers.

RGGI has not only reduced GHG emissions but also “created new jobs and lowered state energy bills.” Last year, Maine Gov. John Baldacci credited RGGI for creating 10,000 jobs. RGGI proceeds also contributed to green capital investments with positive economic and job creation impacts in member states of Maine, New Hampshire and Massachusetts. As for ratepayers:  ”On a dollar-for-dollar basis, RGGI is a winner across the board, with ratepayers benefiting from investments in energy efficiency and other clean technology programs that provide $3 to $4 in savings for every $1 invested, thereby sparking local economies.”

A recent report showed that 80% of the hundreds of millions raised by auctioning carbon credits has “gone back to ratepayers and businesses for renewable energy projects and energy efficiency upgrades. As we reported last week, three states – Delaware, Maine and New Hampshire – have attempted to pull out of RGGI. But after evaluating the economic benefits, all three states decided to remain in the program.”

Climate deniers, afraid that success of regional programs will “help build momentum for a national cap-and-trade climate program,” have made the regional programs the new battlefield for climate deniers:

Conservative activist Clint Woods of the Koch-funded American Legislative Exchange Council (ALEC) stated that RGGI and other regional cap-and-trade regimes had become the “new battlefield” since federal climate legislation was defeated.

The opposition is partially funded by Koch brothers:

Observers attribute most of the opposition’s momentum to campaigns mounted by Americans for Prosperity (AFP) and the American Legislative Executive Council (ALEC), groups funded in part by billionaire oil executives Charles G. and David H. Koch, respectively.

ALEC also drafts templates for legislation that can be used by states on a variety of energy, environmental and climate change issues, including “State Withdrawal from Regional Climate Initiatives.”

Recently, the GOP-led New Hampshire legislature voted to withdraw the state from the RGGI.  Democratic Gov. John Lynch opposes the measure and might veto, but now lawmakers are considering a bill to modify rather than repeal RGGI participation.

Last month, New Jersey Gov. Chris Christie stated that his state will withdraw from this carbon market by the end of this year contrary to the wishes of likely voters in a survey who widely support investing in alternative energy sources, prefer solar and offshore wind over coal, will pay increased costs on monthly energy bill, and support a program that curbs climate change while creating jobs and a clean energy economy.

NJ Democrats are now pushing 5 bills in an attempt to stop withdrawal.  Christie will likely veto, but the hope is that these measures might “at least influence future lawsuits or other enforcement actions” regarding the state’s participation in RGGI.

Last May, bills by some GOP to remove Maine and Delaware from the RGGI failed.

Some states have shifted RGGI money to cover budget shortfall, such as NJ and New York. State law prevented Rhode Island from doing the same. In these bad economic times, it is understandable that states would appreciate a new source of revenue. However, when Gov. Christie diverts funds to cover the budget, he might also appreciate the fact that such diversion can help render the RGGI programs less effective, which in a circular manner then supports his claims that RGGI is a failure.

Gov. Christie maintained that RGGI is a “failure” after he “took more than $65 million in the state’s designated RGGI money to help offset a $10.7 billion budget deficit for fiscal year 2011. The state has so far received more than $100 million in proceeds from RGGI.”  Very convenient that Christie is not legally required to pay back the funds that should have been used for green energy programs designed to provide green jobs, which is one measure of benefits and success of RGGI.

This is not a new GOP tactic. Same rationale is presented by Jon Huntsman, GOP presidential candidate, on the national issue of cap-and-trade that he supported “last decade as a way to curb greenhouse gas emissions,” but now rejects.  Now that years of GOP policies have created an “economic implosion,” cap-and-trade is no longer viable because we can’t have “any kind of hamper on economic growth” notwithstanding the economic successes of RGGI.

Now  opposition groups charge that the RGGI market has “crashed” because in the most recent auction on June 8th only 30% of carbon credits were sold. It is true that RGGI faced its “biggest shortfall since auctions began” in 2008 at the June 8th auction.  Demand for allowances is down “because power-plant pollution has dropped below required levels” and there is a “black cloud” hanging over RGGI’s future as states exit creating a doubt of viability.

Programs not operational yet, like the Midwest Greenhouse Gas Reduction Accord scheduled to commence in 2012, are also targeted.  Americans for Prosperity announced that a Republican would introduce a resolution to withdraw Michigan and similar resolutions would be introduced in other member states.  Arizona Gov. Jan Brewer used an executive order to withdraw from the Western Climate Initiative, also scheduled to commence regional emissions trading in 2012.

The Kochs work to nix the cap-and-trade program even though they reap benefits from their participation in the program.  David and Charles Koch “are spending part of their oil fortune to attack a practical and relatively modest — though hardly secretive, as they contend — environmental initiative. They’re doing so here, and in New Jersey and in California as well….  Another of the Koch brothers’ affiliates, Koch Supply and Trading of Wichita, Kan., has benefitted from the very cap-and-trade auctions they’re so vehemently denouncing.”

While one Koch hand works to defeat RGGI, the other hand is  participating in RGGI auctions, including auctions that AFP claimed were secret.  So while the mantra is that regional cap-and-trade programs are unjust taxes on businesses and bad for our economy, Koch spokeswoman explained that Koch has “participated in the RGGI market since its inception” because they “will not turn our backs on incentives available to our competitors.”  Incentive, “something that incites or tends to incite to action or greater effort, as a reward offered for increased productivity.” The Koch brothers want to make sure that their competitors do not gain advantages over them by participating in cap-and-trade.

DC, are you listening? Create the cap-and-trade programs and then listen to the climate deniers whine all their way to the bank.

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