panorama view of Trenton, New Jersey

New Jersey Just Announced Big Climate Actions. How Far Do They Go?

We brought charts.

Last month, New Jersey Governor Phil Murphy significantly ramped up his state’s response to the climate crisis by announcing a suite of measures designed to incentivize clean energy and boost resilience. The new initiatives come less than a year after RMI released the New Jersey Scorecard, which found that the state had “substantial work to do” to meet its target of cutting emissions in half by 2030.

Governor Murphy’s proposal includes six pillars of action, which are intended to reduce emissions from the electricity, transportation, and building sectors while increasing support for residents vulnerable to climate change-induced flooding. If enacted fully by the state, RMI’s Energy Policy Simulator shows that the pillars will get the Garden State over a third of the way closer to its 2030 goal when compared to its current policy scenario, and over 50 percent closer to its target of reducing emissions 80 percent below 2006 levels by 2050 (known in New Jersey as the 80×50 target). Enacting these pillars will also increase jobs, economic investments, and health benefits.

The six pillars are outlined below:

  • Pillar 1: Executive Order No. 315 pulls the 100 percent clean energy target from 2050 up to 2035, along with support for a statewide Clean Energy Standard
  • Pillar 2: Executive Order No. 316 sets a 2030 target to install electric space heating and cooling systems in 400,000 homes and 20,000 commercial properties, and make 10 percent of all low-to-moderate income (LMI) properties electrification-ready
  • Pillar 3: Executive Order No. 317 directs the New Jersey Board of Public Utilities to plan for the Future of the Natural Gas Utility in New Jersey
  • Pillar 4: Allocates $70 million in Regional Greenhouse Gas Initiative (RGGI) auction proceeds towards medium- and heavy-duty EV incentives
  • Pillar 5: Sets the state on the path to adopt Advanced Clean Cars II, which would require all new cars and light-duty truck sales to be zero-emission vehicles (ZEV) by 2035
  • Pillar 6: Proposes the provision of enhanced flood protection for homeowners, businesses, and infrastructure

Without the pillars, New Jersey’s bankable climate policies are largely composed of the Climate Energy Act of 2018, offshore wind tax credits, and the adoption of Advanced Clean Truck rules. This policy scenario only got the state 60 percent of the way towards climate alignment, defined by RMI as a 46 percent reduction from 2005 emissions by 2030. If fully implemented in the state, the addition of these pillars would accelerate New Jersey’s progress to 72 percent of the economy-wide reductions needed to meet 2030 climate alignment.

In this graph, a 46 percent reduction in emissions by 2030 is indicated by 100 percent climate alignment.

While the governor’s non-binding executive orders lay out a possible climate leadership path, all eyes will be on how and when the state legislature moves to adopt the recommendations and commitments. This is especially true for the proposed Clean Energy Standard and Advanced Clean Cars II, both of which require additional legislative action to be implemented. Recent RMI analysis shows that these provisions are two of the highest-impact policies that a state can enact to achieve their climate goals. In New Jersey — where the transportation and electricity sectors account for 44 percent and 16 percent of current emissions, respectively — these two policies alone account for 64 percent of the anticipated emissions reductions in 2030. Adopting these policies in New Jersey through legislative action, along with the solid start towards building electrification outlined in Executive Order No. 316, would get the state significantly closer to climate alignment.

Compounding Economic and Health Benefits

Beyond carbon emissions reductions, full enactment of the governor’s pillars will bring new clean jobs, substantial economic investment, and better health outcomes to the residents of New Jersey. From renewable energy construction and operation to clean heating and cooling system installation, enacting the six pillars is expected to create an additional 12,000 jobs in the state, per Energy Policy Simulation modeling.

In addition, the state’s plan primes consumers to take advantage of federal funding through the Inflation Reduction Act (IRA). RMI analysis found that if New Jersey were to fully leverage IRA tax credits to meet their climate targets, they could see over $20 billion invested in the state. Not only will this keep investment dollars in-state, it will also lower the federal tax burden of residents in one of the highest-taxed states in the nation.

Governor Murphy’s proposals are largely aligned with RMI’s suggestions to make the most of IRA federal funding — for example, the new and improved clean energy tax credits within the IRA make a Clean Energy Standard extremely cost-effective, and state incentives for medium- and heavy-duty vehicles can be stacked on federal incentives included in the IRA to strategically boost uptake.

Finally, the electric vehicle incentives and sales targets would replace nearly 3 million pollution-emitting vehicles with electric models by 2035, resulting in less overall air pollution and over 3,500 fewer asthma attacks per year. High-use roadways and freight corridors tend to run through low-income communities of color, which means these neighborhoods bear the disproportionate burden of tailpipe pollution. These proposed transportation provisions would supplement the state’s 2020 Environmental Justice Law to reduce pollution in New Jersey’s overburdened communities, which primarily focuses on facility siting.

Building Momentum in the Garden State

Governor Murphy’s recent announcement builds on nearly two decades of climate leadership in New Jersey. In 2007, the New Jersey legislature passed the Global Warming Response Act (GWRA) establishing a target to reduce their emissions by 80 percent from their 2006 levels by 2050. Murphy supplemented the GWRA — colloquially known as 80x50 — in 2021 with an interim target to achieve a 50 percent reduction in emissions by 2030 and 100 percent clean energy by 2050.

He also tasked the New Jersey Board of Public Utilities (BPU) to draft a roadmap outlining the ways that the state could equitably and cost-effectively meet these aggressive targets. Developed in 2019 with RMI analysis, the resulting Energy Master Plan included seven strategies ranging from increased efficiency within the transportation and buildings sector to broad decarbonization of the state’s energy system.

Despite the ambitious proposals put forth in the Energy Master Plan, RMI’s June 2022 New Jersey State Scorecard showed that the state was still falling short of these economy-wide targets based on their current policy scenario. Specifically, RMI’s research found that additional and accelerated investments in building and transportation electrification would be needed to meet 80x50 and interim targets.

Governor Murphy’s six pillars take that recommendation in stride, with dedicated funding for electric vehicles and clean heating and cooling. However, even with these bold policies considered, New Jersey has work to do to achieve its 80x50 target. The governor and other state policymakers must continue to drive emissions reductions, leveraging historic IRA federal funding wherever possible to ensure that solutions are cost-effective and equitable.

Details about this Analysis

RMI used our Energy Policy Simulator to model the actual emissions reduction impact of these policies, if implemented fully. Pillars 1, 2, 4, and 5 together account for an additional 6.5 million metric tons (MMT) per year reduction in CO2e in 2030 when compared to New Jersey’s current policy scenario. By 2035, the impact of these new policies and investments increases to 15.6 MMT per year, and by 2050 they account for an additional 26.8 MMT per year of CO2e reduction beyond the current policy scenario.

More details about the current policy scenario can be found in the State Climate Scorecards Methods and Documentation.