Supporters of efforts to push Pennsylvania into the Regional Greenhouse Gas Initiative (RGGI) suffered a blow Wednesday when Virginia began the process of backing out.
The Old Dominion’s state Air Pollution Control Board voted to repeal the RGGI regulation, a first step toward Virginia withdrawing its planned entry into the compact.
“Today’s commonsense decision by the Air Board to repeal RGGI protects Virginians from the failed program that is not only a regressive tax on families and businesses across the commonwealth but also does nothing to reduce pollution,” said Gov. Glenn Youngkin (R). He also noted that “prior to RGGI, electricity generation increased while CO2 per MWh was almost cut in half in Virginia over the last 10 years.”
And, his administration argued, because electricity producers simply pass the cost of buying carbon credits onto customers, “The imposition of the RGGI’ carbon tax’ fails to offer any incentive to change behavior. Current law allows power generators…to pass on all their costs, essentially bearing no cost for the carbon credits.”
The debate must sound familiar to Pennsylvania voters. Gov. Josh Shapiro (D) declined to support Gov. Tom Wolf’s decision to put Pennsylvania into the cap-and-trade plan during his campaign for governor last year but now supports the move. Shapiro’s office denied he had reversed his stance, but his proposed budget assumes $663 million in RGGI revenue.
Virginia’s story is similar to Pennsylvania’s in some ways. In Richmond, lawmakers authorized — but didn’t mandate — Virginia’s participation. When Youngkin won his upset victory in 2021, he issued an executive order beginning the process of reversing the state’s path toward entering the compact.
In Pennsylvania, then-Gov. Wolf (D) overrode the GOP-controlled state legislature in 2019 and ordered the Pennsylvania Department of Protection (DEP) to join the RGGI. The issue has been tied up in court since.
“Today’s decision by Virginia’s Air Board to repeal the Regional Greenhouse Gas Initiative (RGGI) is a glaring example of yet another state to recognize that RGGI is nothing but an oppressive carbon tax,” said Pennsylvania state Sen. Gene Yaw (R-Bradford). Residents across RGGI’s eleven states are being deceived into paying for their economic demise, all under the guise of lowered emissions.”
At a Pennsylvania Senate hearing on RGGI in March 2022, RGGI opponents like Sen. John Yudichak (I-Luzerne/Carbon) cited a report from the Independent Fiscal Office (IFO) that RGGI carbon-credit auction prices at the time were nearly 400 percent higher than forecast. RGGI “will devastate the Pennsylvania energy industry, dramatically increase energy costs and fan inflation and overwhelm family budgets,” Yudichak said.
A more recent IFO review found RGGI would cost taxpayers billions of dollars in the coming years.
The U.S. Energy Information Administration said RGGI is “the first [agreement] in the United States to place a cap on power sector CO2 emissions.”
The RGGI member states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.
New Jersey withdrew from the program in 2012 but rejoined in 2020.