The Regional Greenhouse Gas Initiative is under assault – via budget negotiations

As negotiations continue over the long-delayed state budget, one of the key line items for Pennsylvanians to watch is the attempt to cancel the commonwealth’s participation in the Regional Greenhouse Gas Initiative. (RGGI is a 10-state cap-and-trade program designed to reduce greenhouse emissions from the electric power sector in the Mid-Atlantic and New England.) Membership in RGGI is the most important thing Pennsylvania can do right now to combat climate change. Gov. Josh Shapiro and Pennsylvania House Democratic leaders should refuse to support any legislation that cancels Pennsylvania’s involvement in the initiative.

Climate change is the most serious long-term threat to this planet. 2024 was the warmest year on record, according to the World Meteorological Organization. Hurricane Melissa’s devastation of Jamaica last week is just the most recent example of how climate change can exacerbate storm damage.

Pennsylvania is the fourth-largest carbon dioxide-emitting state, with approximately 30% of the state’s total greenhouse gas emissions originating from its electric power sector, primarily coal- and gas-fired power plants.

RGGI is described as a cap-and-trade program because a “cap” is put on a state’s overall power sector carbon dioxide emissions. This cap shrinks over time, allowing fewer and fewer emissions. Electric power producers must purchase carbon emission allowances at RGGI’s quarterly auctions or elsewhere. These allowances can be freely “traded” on the open market. Participating states invest the proceeds from these auctions in energy efficiency and clean energy.

According to the program’s own findings, this model has worked well. “Since RGGI’s inception, CO2 emissions from covered power plants in the region have declined 46% and RGGI allowance auctions have yielded more than $9 billion to power investment in the clean energy future of the participating states.”

In 2020, then-Gov. Tom Wolf signed an executive order to develop regulations to place Pennsylvania in RGGI. Wolf utilized the regulatory process due to the political impossibility of accomplishing his goal legislatively – almost all Pennsylvania Republican legislators oppose RGGI.

Pennsylvania’s RGGI regulations were finalized in 2022. These regulations were challenged in court by Republican legislative leaders and business and labor groups on the basis that the regulations imposed a tax not authorized by the Pennsylvania General Assembly; the state Supreme Court is expected to rule on this case soon.

Senate Republicans are now demanding a repeal of RGGI regulations as a condition for agreeing to a budget. House Democrats are seriously considering this demand, partly due to Gov. Shapiro’s lack of support for the initiative. Since first announcing his gubernatorial run, Shapiro has never publicly endorsed Pennsylvania’s entry into RGGI.

In the last session, Gov. Shapiro unveiled his Pennsylvania Climate Emissions Reduction Act (PACER) legislation (HB 2275). This legislation would have created a Pennsylvania-specific version of RGGI. The bill went nowhere. PACER has been reintroduced this term (HB 503/SB 503), and, as before, the legislation has zero chance of passage in the Senate.

The bottom line is that, given the solid hold Republicans have on the state Senate and the tenuous Democratic control of the state House, RGGI regulations are the only chance Pennsylvania has to meaningfully address climate change at this time. 

If House Democratic leaders and Gov. Shapiro are serious about addressing climate change, they must reject Republican demands to cancel RGGI regulations.