Pa. Withdraws From RGGI

After years of legislative and legal maneuvering, Pennsylvania’s participation in the Regional Greenhouse Gas Initiative is officially over. The Legislature recently voted to withdraw from the regional initiative as part of its deal on the state’s overdue budget.

RGGI is a regional carbon emissions cap-and-trade program with 10 member states in the Northeast and Mid-Atlantic. In RGGI’s system, power plants would be required to purchase credits per ton of carbon dioxide emitted from their processes, which would provide incentives for moving to clean energy sources with the money collected for credits used to fund climate and environmental efforts.

The state’s participation in RGGI has been on hold after legal battles ensued following the final rule being published by the state Department of Environmental Protection (DEP) in the Pennsylvania Bulletin in April 2022. RGGI was a priority of the previous Wolf administration, and the governor in 2019 used a regulatory process through DEP to win approval because the plan was not supported by the Legislature.

Proponents of RGGI argued that the benefits of participation outweigh the potential negatives. According to DEP estimates, Pennsylvania’s participation would have abated 227 million tons of carbon emissions by 2030, and raised approximately $200 million annually from auction funds for environmental improvement projects. Since 2005, the 10 states in RGGI have reduced annual power sector emissions 50%, and have so far raised over $8.6 billion to invest into local communities.

Opponents argued that joining RGGI would raise consumer energy bills by an average of 30% by 2030 and put jobs at stake by hindering economic development. With the rapid rise in demand for energy in the past several years due to increasing data center development, it would have impeded Pennsylvania’s ability to compete, opponents believe.

Gov. Josh Shapiro has expressed skepticism of the program since before he took office in 2022. He has instead proposed his own cap-and-invest program, the Pennsylvania Climate Emissions Reduction Act (PACER). It would allow Pennsylvania to determine its own cap on carbon and invest directly in lowering consumers’ electricity bills. The proposal will require legislative action, however.

In his remarks during the budget-signing ceremony, Shapiro said he hopes that withdrawing from RGGI will spur the legislature to address energy policy. “For years, Senate Republicans have used RGGI as an excuse to stall substantive conversations about energy,” he said.

“It’s time to look forward - and I’m going to be aggressive about pushing for policies that create more jobs in the energy sector, bring more clean energy onto the grid, and reduce the cost of energy for Pennsylvanians,” he continued.

The fiscal code bill that accompanied the budget also expedites permitting for some air and water-related general permits. In addition, it improves transparency in the permitting process among DEP and other state agencies, by requiring them to compile and maintain publicly available lists of all types of permits issued by that agency and track those permits on a timeline.