Pennsylvania is set to become the first major fossil fuel-producing state to put a price on carbon emissions. The Environmental Quality Board voted 15-4 Tuesday to adopt the final regulation that would have Pennsylvania join the Regional Greenhouse Gas Initiative, a cap-and-trade program that targets carbon dioxide emissions in the power sector.
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Next Steps for RGGI
EQB’s vote is a significant step in the regulatory process.
The rule now goes to the Independent Regulatory Review Commission and the Attorney General’s Office for final review before publication. The Wolf administration hopes to join the program in early 2022.
IRRC determines whether a proposed rule is in the public interest, as defined by state law. The board is made up of three Democratic appointees and two Republican appointees.
The Attorney General must determine whether a proposed regulation complies with existing law.
There could be other hurdles. DEP Secretary Patrick McDonnell has said he anticipates a legal challenge.
Rep. Daryl Metcalfe (R-Butler) said during the EQB meeting that lawmakers will bring up a bill this fall that would require legislative approval to join a cap-and-trade program. Gov. Tom Wolf vetoed a similar bill last year.
The EQB is a 20-members board that adopts all of the Department of Environmental Protection’s regulations. It is made up of eleven state agency heads, five members of the Citizens Advisory Council and four members of the Senate and House.
Metcalfe made several motions to delay Tuesday’s vote. All failed.
Sen. Gene Yaw (R-Lycoming) voted no on the final rule, saying it would cost the state jobs in the energy sector without making a meaningful dent in national emissions. He said he’s also concerned the program will give other member states sway in Pennsylvania decisions.
“I cannot see giving up Pennsylvania control over our own economy and our own environment,” he said.
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Rep. Greg Vitali (D-Delaware) said joining is an important first step in addressing climate change, which he called a moral obligation to future generations. He also scolded RGGI critics.
“There’s always two things in common: they never acknowledge the seriousness of the problem and they never propose any solutions of their own,” Vitali said.
Wolf signed an executive order starting the RGGI process in October 2019, as part of his overall climate goals of reducing state greenhouse gas emissions 26 percent by 2025 and 80 percent by 2050, compared to 2005 levels.
Pennsylvania is one of the country’s top five carbon-emitting states. The Department of Environmental Protection says emissions from the state’s power sector are greater than total emissions from some small countries.
Scientists say emissions must be cut dramatically in the next decade to avoid the worst effects of climate change.
What is RGGI?
Under RGGI, power plants with a generation capacity of at least 25 megawatts and that send 10 percent or more of their power to the grid must buy allowances for each ton of CO2 they emit. Plants won’t have to buy allowances to cover all their emissions immediately. DEP says 100 percent compliance isn’t required until the end of a three-year control period.
DEP estimates RGGI participation will prevent between 97-227 million tons of carbon emissions between 2022 and 2030, depending on factors such as energy demand. It says the pollution reduction could result in billions of dollars in health care savings.
The lower end of the projected emissions reductions is well below DEP’s original projection of 180 million tons. DEP climate adviser Hayley Book told the EQB that modeling was adjusted for updated factors, including 2020’s unexpected drop in emissions due to the pandemic.
DEP now expects to raise $131-187 million dollars annually from CO2 allowance auctions, down from the $300 million initially projected.
The Wolf Administration hopes to use the money to help energy communities transition away from coal, to clean up environmental justice communities, and to support energy efficiency and clean energy programs.
Democrats have introduced a bill that would direct investments using that framework, but Republicans have yet to support or introduce a measure guiding the proceeds’ use. If no legislation is passed governing investments, all money must go to the state’s Clean Air Fund, where it can only be used to reduce air pollution. The legislature is able to transfer money from the fund for other purposes.
Reaction from Industry and Environmental Groups
In a statement, Power PA Jobs Alliance, a coalition of labor and business groups that would be affected by RGGI, said it is confident that the regulation will be struck down by the courts.
It claims the Homer City, Keystone and Conemaugh coal plants are responsible for a total of $2.87 billion in total economic impact that will be lost when the regulation begins.
Environmental groups are celebrating the vote.
“Today’s vote will be applauded by a majority of Pennsylvanians who demand immediate action on climate change,” PennFuture said. It added there is more work to do to address emissions from the transportation and industrial sectors of the economy.
This story is produced in partnership with StateImpact Pennsylvania, a collaboration among The Allegheny Front, WPSU, WITF and WHYY to cover the commonwealth's energy economy.