New Jersey’s Implementation of its Global Warming Response Act

New Jersey’s Implementation of its Global Warming Response Act
From the May 2009 Riker Danzig <i>Energy UPDATE</i>

New Jersey is leading the way in addressing the effects of greenhouse gases (GHGs) on climate change. With the Global Warming Response Act, N.J.S.A. 26:2C-37 et seq. (the "Act"), the State has established aggressive goals to reduce emissions of GHGs in the state to 1990 emissions levels by the year 2020, and to 80% below 2006 levels by 2050. The Act requires the New Jersey Department of Environmental Protection (the "NJDEP") to develop regulations to monitor statewide GHGs, to require reporting of emissions from significant sources of GHGs and to make policy recommendations to achieve the emission reductions.

In response, the NJDEP has prepared a draft Global Warming Response Act Recommendation Report (the "Report") that recommends new legislation, regulations and policies needed to meet the goals of the Act. The Report touches on wide-ranging aspects of our lives: energy production, building construction and maintenance, and all means of transportation. Some of the effects and legal implications for the regulated community are obvious, such as those arising from green building requirements or performance standards to control GHG emissions; others are less so, such as new vehicle requirements, goals for vehicle miles traveled (VMT) and land use planning. According to the Report, there are three short-term measures that the State must fully implement in order to meet the 2020 goal: the Energy Master Plan (EMP), the Low Emission Vehicle (LEV) program, and the Regional Greenhouse Gas Initiative (RGGI).

Energy Master Plan: The EMP's objectives are: maximize energy conservation and energy efficiency; significantly reduce peak electricity demand; generate 30% of the state's electricity demand from renewable sources by 2020; invest in clean energy technologies to stimulate the industry's growth in New Jersey; and develop a 21st Century energy infrastructure. Implementation of elements of the EMP is already underway, such as the Renewable Portfolio Standard providing incentives for renewable and clean energy technology, but further statutory authorizations likely are necessary.

Low Emission Vehicle: The LEV program targets one of the primary sources of GHG, vehicles. In order for the State to obtain roughly half of the GHG emission reductions expected from New Jersey's LEV program, however, the federal government must first provide a waiver under the Clean Air Act that permits states to adopt California's more stringent auto emissions standards. The Bush Administration refused to permit such a waiver, but the Obama Administration has instructed the United States Environmental Protection Agency to reconsider the Bush Administration's refusal. Requiring greater mileage per gallon also will be necessary.

Regional Greenhouse Gas Initiative: RGGI is a multi-state program designed to reduce carbon dioxide emissions from power production facilities by capping the total amount of emissions that may be emitted, and auctioning the rights to those emissions. New Jersey has participated in the last two (of three) RGGI auctions. So far, the auctions appear to be successful: all available GHG emissions credits were sold and the bidding was competitive. In part, the money received by the State is slated to be used for projects that will further the goals of the EMP.

Even if the State can fully implement these three measures in time to meet the 2020 goal, it must still find other ways to meet the 2050 goal. To that end, the Report also discusses actions that must be commenced within the next 18 months if the 2050 goals are to be met. Some of these additional actions are:

Controlling Emissions from Electric Generating Units and Industrial Sources: NJDEP will immediately begin developing efficiency standards for state-of-the-art electric generating units that will receive Global Warming Response Act funding. In addition, it will develop a minimum CO2 emissions performance standard for all fossil fuel-fired generating plants and lay out an approach (e.g., performance standards, cap-and-trade, or mandatory planning) and schedule to reduce GHGs from the industrial sector.

Green Building: Energy conservation and efficiencies are expected to be achieved by new "green" requirements for buildings, appliances and other equipment. The Report recommends incorporating green building requirements into the state building code, new tax incentives for green buildings, and upgrades to older residences. The objective is to increase energy efficiency by 30% and to develop zero emission buildings. These requirements will affect commercial and residential developers, the siting of projects, and the cost to construct and operate facilities.

Open Space and Forests: Open space, forests, and other natural resources play a role in climate regulation, carbon storage and sequestration. NJDEP recommends on-site tree preservation requirements for new developments, reforestation requirements for state-funded projects, reauthorization of the Garden State Preservation Trust to conserve open space, and creation of a GIS-based registry of creditable forestation projects. These projects will put certain lands off-limits for development but will also provide potential carbon offset credits.

Other Actions: NJDEP recommends a host of other actions, addressing landfill closure, recycling, wastewater and stormwater projects that reduce energy usage, and implementing farming and greenhouse initiatives to reduce GHG emissions. NJDEP will establish GHG monitoring and reporting requirements. It will award a contract to develop the Garden State Climate Fund, a brokerage to facilitate development of GHG emission offsets, reductions and sequestration projects. The Department of Transportation will also develop a series of demonstration projects to assess the feasibility of significant structural changes in modes of transportation.

Ultimately, the Report concedes that achieving the 2050 goal to reduce GHG emissions by 80% below 2006 levels will require "significant ... shifts in public policy, lifestyle and markets" and a "climate friendly economy." Some of the more aggressive shifts that it envisions are: