The Regional Greenhouse Gas Initiative is a joint effort by seven northeast states to reduce carbon dioxide emissions from the region’s power plants. It aims, admirably, to fill the void left by George W. Bush’s refusal to do anything serious about climate change at the national or international level. It has therefore been welcomed by environmentalists and much praised in the media.
If implemented as proposed, RGGI would stabilize power plant carbon dioxide emissions at current levels starting in 2009, and cut them 10 percent by 2019. It would do this through a cap-and-trade program that would begin with the states issuing free pollution permits to historic polluters. The polluters could use these permits themselves or sell them for cash to other utilities or speculators. States are developing the final rules now.
There’s just one problem with this plan, but it’s a big one. The problem is that it’s a huge giveaway of a common asset — the atmosphere — to a few private power companies. It’s the equivalent of giving the airwaves to private broadcasters for free, or selling timber from national forests at below-market prices. It will enrich the utilities and their shareholders at the expense of northeast consumers, who’ll pay more money for less energy in the future. And it will set a dangerous precedent for other regional plans, as well as for the nationwide plan we must eventually adopt.
The root question RGGI poses is, whose atmosphere is it? Does the air we breathe belong to all of us together, or is it rightfully the property of polluting corporations? This isn’t just a philosophical question; it makes a huge economic difference. One answer means that polluters pay for the right to pollute; the other answer means consumers pay. Billions of dollars are at stake.
RGGI’s actual answer — for which it offers no explanation — is that 75 percent of the atmosphere belongs to polluting corporations and 25 percent belongs to the rest of us. It thus gives 75 percent of the emission permits to power companies, and 25 percent to consumers and clean energy providers.
This giveaway needs to be — and will be — challenged in the coming months. Consumer groups are organizing protests. They’ll try to persuade state legislatures to amend the rules before it’s too late. If they fail, a legal challenge is clearly in order.
As a non-lawyer, I can see at least two possible arguments: (1) the public trust doctrine, and (2) the Equal Protection clause of the 14th Amendment.
The public trust doctrine holds that the people’s property (for which the state is trustee) can’t be given away without fair compensation. It harks back to Roman law, which declared that air and water are res communes, common assets that belong to all. It has been invoked by U.S. courts numerous times, most relevantly in 1892 when the Supreme Court overturned a giveaway of Chicago’s waterfront to the Illinois Central Railroad. “The state can no more abdicate its trust over property in which the whole people are interested…than it can abdicate its police powers,” the court declared sternly.
Yet that’s exactly what RGGI does. It gives away more than a waterfront; it gives away the air over seven states (or 75 percent of it) to a few polluting corporations. If that isn’t an abdication of the states’ role as trustees, it’s hard to imagine what would be.
The equal protection argument would be based on another Supreme Court decision, this one involving the Alaska Permanent Fund. In the 1970s, Alaska leased land on Prudhoe Bay to several oil companies. It then divided the proceeds into two parts: one part went to the state government, the other into a separate fund which would pay dividends to all Alaskans. Originally, the dividends paid to each Alaskan would depend on how long they had lived in the state. Old-timers would receive more than newcomers.
However, an Anchorage attorney who had lived only briefly in the state challenged this unequal distribution formula — and won. By 8 to 1, the Supreme Court required Alaska to pay dividends on a one person, one share basis. (Zobel v. Williams, 457 U.S. 55, 1982.) ‘When a state distributes benefits unequally, the distinctions it makes are subject to scrutiny under the Equal Protection Clause of the Fourteenth Amendment. Generally, a law will survive that scrutiny if the distinction it makes rationally furthers a legitimate state purpose.’ But in this case, the court found no legitimate purpose.
In the RGGI case, the resource in question is air rather than oil, but the same reasoning should apply. Property rights to a common asset are being distributed by the states in an unequal way. What’s the “legitimate state purpose” in discriminating against one set of citizens (those who own little or no stock in the power companies) in order to favor another set of citizens (those who own lots of stock in the companies)? In truth, there’s no legitimate state purpose, and the unequal treatment shouldn’t stand.
There’s an historic opportunity here to establish that all citizens are equal inheritors of the atmosphere — and that polluters must pay US for the right to pollute, not vice-versa. Let’s hope the legislatures in the northeast — or, failing that, the Supreme Court — will make this fundamental principle clear.