The Practical Implications of Climate Change Legislation on New Jersey Businesses

Environmental Law: Climate Change Law: During the past year, the New Jersey legislature has made clear its intention to enact laws that will reduce emissions of greenhouse gases and ultimately redress the effects of global warming. On July 6, 2007, the State enacted the Global Warming Response Act (the “Act”), its first legislation aimed at regulating the CO2 gas emissions that are thought to be a significant cause of global climate change. Under the Act, the New Jersey Department of Environmental Protection (“NJDEP”) is required to develop regulations aimed at monitoring emissions of CO2 gases by requiring reporting of such emissions by those entities deemed to be significant sources. In addition, the NJDEP must develop policy recommendations as to how the State can (a) reduce emissions to the 1990 level by 2020 and (b) reduce emissions to 80% below the 2006 level by 2050.

In response to this forward-thinking legislation, the NJDEP developed and circulated a draft report called the “New Jersey Greenhouse Gas Inventory and Reference Case Projections 1990-2020.” The report quantified New Jersey’s CO2 gas emissions and identified the primary sources of such emissions. According to the report, in order to meet the far-reaching goals set forth under the Act, the State will need to target not only power plants, transportation and heavy industrial production, but also building occupancies such as homes and offices.

In addition to its passage of the Global Warming Response Act (and the subsequent report issued by the NJDEP), the New Jersey state legislature also enacted the RGGI Act, a cooperative effort across a number of Northeastern and Mid-Atlantic states to reduce CO2 gas emissions from electrical power plants. The RGGI Act requires that certain facilities obtain “allowances” for emissions of greenhouse gases, which will be capped and auctioned by the NJDEP. The monies collected from these auctions will be used for various public purposes aimed at achieving the goals of the RGGI Act. In addition, allowances may be purchased by entities that do not emit greenhouse gases, which will serve to reduce the available allowances and encourage efforts to reduce emissions.

New Jersey businesses would be wise to heed the legislature’s increasing efforts to address greenhouse gas emissions and global warming. In order to adapt to the recent legislation and prepare for future climate change regulation, New Jersey businesses may want to start taking stock of their CO2 gas emissions and thinking about ways to reduce them. In addition, certain businesses might consider whether their facilities can be altered or reconstructed in accordance with “green building” standards.

In light of the State’s growing tendency to regulate in this area, new climate changes laws are sure to come. Businesses that take the initiative to prepare now may not only get a head start on competitors, but may also set themselves up take advantage of the new opportunities that will undoubtedly arise.

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