New Jersey latest state to raid carbon auction funds
WASHINGTON (Reuters) - New Jersey has become the latest state in a regional cap-and-trade market on greenhouse gases to take money meant to support clean energy programs to help ease its budget deficit.
"Pain had to be distributed across the board," Elaine Makatura, director of New Jersey's Department of Environmental Protection, said in an interview on Wednesday. She said Gov. Chris Christie has decided to move $65 million from New Jersey's Global Warming Solutions Fund to its General Fund.
The move, which includes revenues expected to be raised through June next year, would help fill a huge deficit New Jersey is facing, she said.
The money comes from quarterly auctions of permits allowing power plants to emit the main greenhouse gas carbon dioxide. New Jersey is one of 10 states that formed a cap-and-trade market in the Northeast known as the Regional Greenhouse Gas Initiative that holds the auctions.
RGGI seeks to cap the emissions from power plants and allow energy companies and investors to trade the permits bought in auctions and earned by cutting emissions.
The group had wanted the vast majority of the revenues to go to programs promoting clean energy like solar and wind power and energy efficiency.
The auctions have raised more than $580 million after the latest one held last week. New Jersey has raised nearly $65 million in the auctions, which have been held since late 2008.
Green groups, including the Sierra Club, said New Jersey's move would hurt the environment and crimp job creation in low-carbon energy.
New York Gov. David Paterson decided last year to use $90 million from RGGI auctions to help ease that state's deficit.
The issue hints at the difficulties that a national cap-and-trade program could face in filtering money from such markets to clean energy programs.
U.S. Senators John Kerry, a Democrat, Lindsey Graham, a Republican, and Joe Lieberman, an independent, are trying to craft a climate bill that would include a cap-and-trade program on power plants, which emit 40 percent of U.S. greenhouse gases. The bill faces tough opposition from lawmakers in fossil fuel-rich states.
It is unlikely any national program would auction a high percentage of the credits at first. But auctions could play a bigger role later in a national program.
(Reporting by Timothy Gardner; Editing by David Gregorio)
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