BP America: N.J. lawmakers can lead the way to a cleaner climate

By Susan Dio

The states have long been pioneers of progress in America, running experiments that help us discover solutions to our toughest challenges. Today, New Jersey has a chance to tackle the defining issue of our time: climate change.

Leaders in Trenton should seize the opportunity and embrace a regional plan to reduce greenhouse gas emissions in the transportation sector.

Transportation accounts for nearly a third of all U.S. emissions. But a plan from the Transportation and Climate Initiative (TCI) – a multi-state collaborative effort facilitated by the Georgetown Climate Center – would cap and reduce those emissions in participating states.

How does it work? It uses the power of competitive markets to change behaviors and encourage innovation, first by placing a regional cap on emissions and then requiring companies to buy or trade allowances to emit up to the limit of the cap. Because the cap reduces annually, the allowance price will rise every year. This gives the certainty companies need to invest and develop new technologies faster and at the scale required for real progress.

The proposal follows a model used in power markets known as the Regional Greenhouse Gas Initiative (RGGI), which New Jersey has taken steps to rejoin. This highly successful policy program helped the Garden State and others reduce emissions from the power sector across the Northeast and Mid-Atlantic.

Since 2008, power sector emissions have plummeted in the states belonging to RGGI at a rate almost double the rest of the U.S. Critically, GDP in these states outpaced growth elsewhere by 31% over the same decade, proving states don’t have to choose between the economy or the environment.

That’s the power sector, but we don’t need to reinvent the wheel to get the same results in transportation. And because the TCI plan follows RGGI’s market-based approach, public servants can feel confident they’re following a proven model.

They’d also give the people of New Jersey a reason for optimism on climate change. While there’s no doubt global carbon emissions are trending in the wrong direction, RGGI’s success shows how targeted carbon pricing programs are working across the region.

These proposals also help sustain low carbon policies more broadly. Carbon pricing policies like RGGI and TCI help create carbon reduction projects that earn the credits essential to making pricing programs – like those in California and others around the world – work as designed.

Like states, businesses also drive innovation and progress. And BP wants to do its part in reducing global emissions.

BP’s new CEO Bernard Looney recently announced our ambition to become a net zero company by 2050 or sooner. BP’s support for carbon pricing is part of this bold vision. We believe in it so much, we’re stopping corporate reputation advertising and re-directing that money to promote net zero policies, ideas and collaborations instead.

But while companies like BP can – and must – play a leading role in bringing about a lower carbon future, strong and effective government policy is essential. Put simply, the world isn’t moving fast enough to curb emissions and limit the impacts of climate change. While a national carbon pricing program could become the gold standard in the future, state and regional plans can play a critical role now – and we can’t wait.

That’s why BP supports well-designed carbon pricing programs. Gov. Murphy’s climate leadership is known and appreciated, and New Jersey has a real opportunity to further reduce regional carbon emissions.

Carbon pricing is the most efficient and comprehensive way to reduce greenhouse gas emissions. By putting the TCI plan into action, Gov. Murphy and the legislature can act not only in their region’s best interests, but also in its best traditions dating back to our nation’s founding: boldly testing ambitious new ideas to improve the lives of Americans.

As Supreme Court Justice Louis Brandeis said, states are the “laboratory of democracy.” That’s happened with RGGI on carbon emissions in the power sector, and it can happen again with TCI in transportation. BP urges Trenton lawmakers to give America a model that will help move the nation closer to a low carbon future.

Susan Dio is the chairman and president of BP America.

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