Senate Votes to Disapprove Pennsylvania Joining the Regional Greenhouse Gas Initiative (RGGI)

HARRISBURG – Seeking to assert the Pennsylvania General Assembly’s role regarding the Commonwealth entering into multi-state compacts and levying taxes, the state Senate today (October 27) voted to disapprove a regulation by the state Environmental Quality Board (EQB) to have Pennsylvania join the Regional Greenhouse Gas Initiative (RGGI), according to Sen. Pat Stefano (R-32).

Gov. Tom Wolf three years ago said Pennsylvania was doing a great job reducing carbon dioxide (CO2) emissions, and that it wasn’t necessary to sign on “to something we’re already doing a better job on.”

However, two years ago the governor flip-flopped and then circumvented the legislative process, unilaterally forcing Pennsylvania to join the current 11-member coalition of RGGI states. No other RGGI state has joined the coalition without the approval of that state’s legislature, and none of the other states comes close to having Pennsylvania’s number of electricity production facilities.

The RGGI coalition operates what is called a CO2 “cap-and-trade” program, though the cost of the “emission allowances” traded within the program is, effectively, a tax on CO2 emissions by electricity producers.

Sen. Stefano and his Republican colleagues have stressed the carbon tax would not only violate the state Constitution, which grants exclusive power to the legislative branch to levy taxes, but would also result in the closure of Pennsylvania’s coal-fired power plants, the loss of family-sustaining jobs and negative impacts on the state’s economy.

“Joining RGGI would block Pennsylvania from using its own abundant natural resources, forcing residents to pay other states more to fulfill their energy needs. Especially when families are already facing rising costs for food and gas, we must avoid further financial strain,” Sen. Stefano said.

When the governor announced his unilateral decision to join RGGI in 2019, the carbon tax rate was $5.20 per ton of CO2. Models produced for the state Department of Environmental Protection emphasized that the RGGI tax rate would not surpass $7 per CO2 ton until at least 2025. Nevertheless, since Gov. Wolf’s 2019 announcement, the RGGI tax rate has increased 79% to $9.30 per ton of CO2.

While proponents of RGGI promise only positive returns, reviews of the RGGI “cap and trade” effort indicate it has produced no added emissions reductions or associated health benefits, while exporting CO2 emissions to states from which RGGI states import their electricity, such as Pennsylvania. And a review of reported emissions changes by RGGI states within the context of federal regulatory changes for power plants that began in 2012, as well as lower natural gas prices for several years, suggests any CO2 emissions changes in RGGI states were due to the regulatory changes and lower natural gas prices.

As the governor said in 2018, Pennsylvania has actually done a great job reducing CO2, all while being a major electricity exporter to other states, including RGGI states. In fact, the state Independent Fiscal Office last month reported that while Pennsylvania’s electric generation has held steady during the last decade, its CO2 emissions from power plants have fallen by 37%.

Additionally, spending of CO2 tax revenue by RGGI states on energy efficiency, wind power, solar power, and low-income fuel assistance was found to have minimal positive impact in those states, while RGGI added to already high electric bills in the coalition states.

The concurrent resolution now goes to the state House of Representatives, which has a window of 10 legislative days or 30 calendar days to pass the resolution and present it to the governor.

If Gov. Wolf vetoes the resolution, it will return to the Senate, which may consider overriding the veto. Two-thirds of the Senate must support the resolution to override the veto. Should the Senate override the veto, the measure would then go to the House where the same two-thirds vote is required.

Even if a veto is not overridden, the process is probably far from complete, with an expectation this will end up in the courts, which will likely be asked to determine if imposing a CO2 tax is beyond the scope of the executive branch’s unilateral authority. Additionally, as this was initiated by executive order and not by state law approved by the General Assembly, Pennsylvania could very well be withdrawn from the RGGI by a future governor.

VIDEO: Sen. Stefano speaks against Pennsylvania joining the Regional Greenhouse Gas Initiative.

CONTACT: Mark Fetzko, mfetzko@pasen.gov