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The Origin and Demise of New Jersey's Open Market Emissions Trading Program

January 2005

Citation: ELR 10032

Author: Devin DeMarco

On August 2, 1996, the New Jersey Department of Environmental Protection (NJDEP) promulgated rules governing its Open Market Emissions Trading (OMET) program. With a goal to provide industry with a greater degree of flexibility in meeting federal air compliance directives and simultaneously support the state's progress toward the attainment of federal air standards, this program has now been terminated following scrutiny from the U.S. Environmental Protection Agency (EPA), environmental groups, and a new NJDEP administration.

This Article discusses the basis for this scrutiny and other program flaws discovered through interviews with, and public comments from, NJDEP and EPA officials, industry representatives, environmental advocates, and former members of the New Jersey State Legislature. The results of this work are also placed against the political background that gave rise to open market trading in New Jersey, and may have hindered the program's success. Finally, recommendations are offered for future open market trading (OMT) programs that may help to prevent some of the shortcomings witnessed in New Jersey's initiative.

Devin P. DeMarco received a B.S. in environmental science from The University of Scranton in 2000. This Article articulates the conclusions of a thesis entitled "The Rise and Fall of Open Market Emissions Trading in New Jersey" that was presented to the faculty of the New Jersey Institute of Technology in partial fulfillment of the requirements for the M.S. degree in environmental policy studies. Recognition is given to the many individuals of the government, private, and special interest sectors that offered both professional and personal time to be interviewed for this research project. Gratitude is also extended to thesis advisor. Dr. Maurie Cohen who provided valuable insight to the research and constructive content review. Mr. DeMarco can be reached at dpdemarco@optonline.net.

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