Feature:Opinion

New Hampshire smacks down cap and trade

Photo of Phil Kerpen
Phil Kerpen
President, American Commitment

The New Hampshire House of Representatives today voted overwhelmingly — 246 to 104 — for New Hampshire to become the first state to repeal an up-and-running global warming cap-and-trade energy tax system. The state senate is expected to follow suit with a similarly veto-proof repeal. The move has major implications both in the region and nationally.

Since 2008, New Hampshire has been one of the 10 members of the Regional Greenhouse Gas Initiative (RGGI), a power plant-only cap-and-trade system that holds quarterly auctions requiring electric utilities to buy carbon dioxide permits. The cost of those permits is buried in the rate base and passed on to customers in the form of higher electricity prices. The tab is $28.2 million so far and rising — the state budget estimate for the next year jumped to $70 million in hidden energy taxes under the RGGI cap-and-trade program. Moreover, the program has become a honey pot for corrupt special interest giveaways to corporations, as a recent report from Grant Bosse of the Josiah Bartlett Center showed.

RGGI was supposed to segue directly into a national cap-and-trade system, and was designed by Lisa Jackson, now EPA administrator, when she ran New Jersey’s Department of Environmental Protection. The pitch to industry was that they could get a head start on buying cap-and-trade permits for two or three dollars each, and make a fortune when a federal bill passed with permit prices ten times that or higher. Now that a federal bill is dead, RGGI is a lose-lose for everyone except the politicians who get to spend the money and the special interests receiving subsidies.

The overwhelming veto-proof, bipartisan vote today means that New Hampshire is now on a path to doing something that looked impossible just a couple years ago — repeal a cap-and-trade program. In the process, it could deal the death blow to cap and trade both regionally and nationally.

While RGGI can survive the loss of a small state like New Hampshire, it could probably not survive the loss of a large state like New Jersey, where a repeal effort is picking up steam fast, with at least 37 co-sponsors. The bill, sponsored by Alison Littell McHose in the state assembly and Mike Doherty in the state senate, added its first Democratic co-sponsor last week in State Senator Paul Sarlo. Activists in the state are making state cap-and-trade repeal the top issue in a campaign year where the entire state legislature is in cycle, and the New Hampshire repeal could raise the New Jersey bill’s profile enough for Governor Chris Christie to finally come off the fence and support repeal.

The national implications are also huge, considering the brick wall of opposition Barack Obama ran into on his cap-and-trade plan in 2009. It now looks like the only path to a national cap-and-trade bill would be for Republicans to again (as they did in 2008) nominate a pro-cap-and-trade presidential candidate. But the presidential nomination runs through New Hampshire, and with debates set to start soon, there will be tremendous pressure on one-time cap-and-trade supporters like Jon Huntsman and Tim Pawlenty to distance themselves from that advocacy and take a strong anti-cap-and-trade stance in a state that overwhelmingly rejected the policy on the state level.

With the New Hampshire fight well underway, green groups will go all out to pressure and intimidate state senators not to support repeal and kill their cap-and-trade dream. New Hampshire state senators should hold firm and follow the strong message sent by today’s bipartisan 246 to 104 House vote. If they do, they can deal the death blow to cap-and-trade — not just in New Hampshire, but perhaps nationally.

Phil Kerpen is vice president for policy at Americans for Prosperity.