The RGGI budget raid and cap & trade credibility

I haven’t been watching the Regional Greenhouse Gas Initiative very closely, but some questions from a colleague prompted me to do a little sniffing around. I happened to run across this item:

Warnings realized in RGGI budget raid

The Business and Industry Association of New Hampshire was not surprised that the Legislature on Wednesday took $3.1 million in Regional Greenhouse Gas Initiative funds to help balance the state budget.

“We warned everybody two years ago that this is a big pot of money that is ripe for the plucking, and that’s exactly what happened,” said David Juvet, the organization’s vice president.

Indeed, the raid happened without any real debate at all. In fact, the only other RGGI-related proposal – backed by Republicans – was to take even more money from the fund.

… New York state lawmakers grabbed $90 million in RGGI funds last December. Shortly afterwards, New Jersey followed suit taking $65 million in the last budget year. And “the governor left the door wide open for next year. They are taking it all,” said Matt Elliott of Environment New Jersey. …

This is a problem because it confirms the talking point of “cap & tax” opponents, that emissions revenue streams will be commandeered for government largesse. There is a simple solution, I think, which is to redistribute the proceeds transparently, so that it’s obvious that a raid on revenues is a raid on pocketbooks. The BC carbon tax did that initially, though it’s apparently falling off the wagon.

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