After months of indecision over whether Pennsylvania should enter the multi-state Regional Greenhouse Gas Initiative (RGGI), Gov. Josh Shapiro finally found his answer.
Create one of his own.
On Wednesday, the Democratic governor unveiled his own cap-and-trade carbon credits system for the Keystone State.
“This plan is tailored for Pennsylvania,” he said at an event in Scranton. “We will not take direction from anyone outside this commonwealth. This initiative will be established by us, run by us, and benefit us. We will set our own cap. We will set our own price for those carbon credits.”
Shapiro was light on details of his Pennsylvania Climate Emissions Reduction Act (PACER) proposal but heavy on promises. He pledged that it would reduce emissions, create 14,500 jobs, and save consumers $252 million via electricity rebates over five years.
“[The] Department of Environmental Protection (DEP) will set a cap on the amount of carbon that large power plants can produce and release into the air in our commonwealth,” said Shapiro. “In other words, to produce that carbon the 55 or so power plants in Pennsylvania will have to purchase credits from the commonwealth to offset the pollution that they’re putting out.”
He vowed that 70 percent of the money generated by PACER would be used for the electricity rebate, and the rest would be used for large energy-producing facilities in Pennsylvania. “No one in Pennsylvania will pay more for their electricity because PACER, and in fact, many will pay less,” Shapiro said.
Those promises didn’t convince cap-and-trade skeptics like Sen. Gene Yaw (R-Bradford).
“Why would anyone come to Pennsylvania with the idea of a new tax,” Yaw told DVJournal. He portrayed PACER as another version of RGGI. “That just makes no sense at all…It’s RGGI 2. I see no benefit to Pennsylvania.”
Yaw added he’s extremely concerned about a recent study that said Pennsylvania’s electric grid could be extremely strained in 2028 due to increased demand and a lack of new generation. That could lead to blackouts in extreme weather events.
“That point is not addressed at all,” he said. “[The plan] penalizes the power plants that provide our baseload. He wants to increase renewables, [but] you can install millions of acres of solar panels, and it’s not going to solve the problem of where the power comes from at 3 a.m. …It’s not going to come from solar panels, and it’s not going to come from windmills.”
Energy and business groups echoed Yaw’s concern about future energy production.
“Pennsylvania is a global leader in energy production and reducing emissions, and policies going forward should build on this progress,” said Pennsylvania Chamber of Business and Industry president and CEO Luke Bernstein. “We await details on the governor’s proposals, which raise significant questions and concerns about the impacts on our residents, businesses, the environment, and our economy. We encourage the governor to work collaboratively…to address important questions pertaining to the short and long-term impacts of these policies and develop the best plan for Pennsylvania.”
Marcellus Shale Coalition President Dave Callahan told DVJournal that Shapiro needed to remember Pennsylvania is second in the nation in natural gas production. That production reduced carbon emissions by 44 percent and saved consumers more than $5 billion. “The most pressing challenge we face, however, is ensuring a stable and reliable energy grid. To accomplish this, we must remove policy barriers that drive investment to Ohio and elsewhere and encourage investment in reliable, baseload generation here in Pennsylvania.”
The harshest critique of Shapiro’s PACER announcement came from the Pennsylvania Manufacturers Association (PMA).
“Gov. Shapiro’s energy tax will cause widespread destruction in every industry in Pennsylvania,” said PMA President and CEO David N. Taylor. “A new, additional tax on energy production will jeopardize our vital industries and undermine the hardworking women and men on our shop floors while massively subsidizing boutique ‘green’ energy monopolized by China.”
Green energy advocates like the Environmental Defense Fund thanked Shapiro for the PACER proposal. The group said the idea is “an important step in furthering the dialogue on how the state can limit climate pollution…We are hopeful that the PACER proposal can advance a conversation with the General Assembly on the best path forward for the State to limit power sector carbon pollution.”
And Pennsylvania Senate Democrats are on board with Shapiro’s idea.
“I applaud the governor for restarting a conversation around energy policy in Pennsylvania,” said Senate Democratic Leader Jay Costa. “Together with stakeholders across the commonwealth, this plan meaningfully addresses three crucial priorities: jobs, the climate crisis, and consumers. I look forward to discussions with our colleagues and industry leaders as we work to implement a strategy that positions us as a national leader in the energy sector.”
RGGI is still waiting for the Pennsylvania Supreme Court to decide whether former Gov. Tom Wolf (D) violated the Constitution by unilaterally pushing the state into the compact in 2022. The Commonwealth Court said Wolf created an “invalid tax” and removed Pennsylvania from RGGI last year.
Shapiro appealed, saying he wanted to protect executive authority.
He vowed Wednesday to remove Pennsylvania from RGGI if the legislature passed his PACER plan. That didn’t sit well with Republicans.
“The fact the governor is essentially holding RGGI hostage as a negotiating point for his new energy tax scheme leads me to believe his plan isn’t all that good for Pennsylvania consumers,” said House Republican Appropriations Chairman Seth Grove (R-York). “His plan is a tax, plain and simple. Taxes don’t lower costs; they raise them.”
“The best way to swiftly advance meaningful discussions around energy policy is for Gov. Shapiro to remove the anvil of RGGI and drop his appeal to the Pennsylvania Supreme Court,” said Senate Majority Leader Joe Pittman (R-41). “Detrimental job losses and increased electricity costs imposed directly on consumers necessitate immediately closing the chapter of RGGI.”
