Cap-And-Trade Scam: Funds Diverted To The Poor

Money meant for energy efficiency programs will instead go to help low- to moderate-income households pay their electric bills after Maryland lawmakers agreed this past April to recommendations from the Department of Legislative Services.

The House of Delegates and the Senate disagreed on whether to funnel 50 percent of the money Maryland receives from selling carbon emissions allowances through the Regional Greenhouse Gas Initiative, or RGGI, to bill assistance in fiscal 2012. The House had rejected the measure, but budget conference committee members agreed to the Senate's version of the budget.

The Regional Greenhouse Gas Initiative, or RGGI, is an agreement among ten Northeastern and Mid-Atlantic States (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont) to reduce greenhouse gas emissions from power plants.

RGGI's purpose is to reduce the carbon emissions of power plants by requiring their owners to purchase carbon allowances based on the amount of pollution they emit. The participating states have committed to cap and then reduce the amount of carbon dioxide that certain power plants are allowed to emit, limiting the region’s total contribution to atmospheric greenhouse gas levels.

The decision allocates 50 percent of Maryland's RGGI proceeds to low-income energy assistance and 17.5 percent for energy efficiency, conservation and programs to control customer electricity use on peak demand days. Residential rate relief has a 23 percent share of the money, clean energy and climate change programs get 6.5 percent and 3 percent goes to administration of the fund.

Originally, 17 percent of Maryland's money went to bill assistance and 46 percent was supposed to go to energy efficiency. The rest went to residential rate relief, renewable and clean energy programs and fund administration.

Through March 2010, Maryland sold 41.7 million carbon allowances, and raised $113.3 million. It is second among 10 states in sales and proceeds, behind New York, which sold 79.2 million allowances and made $213.4 million.

(Source: The Baltimore Daily Record, April 8, 2010)

In New York, government officials found $90 million to pay for schools by dipping into money generated by the multistate greenhouse gas initiative.

In New Hampshire, the state took $3.1 million from a similar environmental fund. And in New Jersey, the government diverted its whole share: $65 million.

In just over two years, the initiative, known as RGGI, has generated more than $729 million for the 10 states that have participated. Each state is supposed to use its share of the money raised to invest in renewable energy and to promote energy efficiency and consumer benefits, like programs that help low-income electricity customers pay their utility bills.

Critics say that diverting money from the fund for general spending, instead of using it on emissions control and energy savings, makes the initiative little more than a hidden tax on electricity.

Already, RGGI opponents in New Jersey have sponsored a bill to end the state’s participation.

(Source: NYT)

[The cost of the allowances sold in the auctions are, of course, passed on to the rate-payers, making this a stealth tax-- a redistribution of wealth by any standard.      --Editor]