Pennsylvania set to publish final carbon pricing regulation

It wouldn’t be Earth Day without talk of environmental regulation. 

The ongoing saga surrounding Pennsylvania’s participation in the Regional Greenhouse Gas Initiative took another step toward a resolution Friday as the Wolf administration finalized the regulations that make official the commonwealth’s participation in the multi-state pact aimed at regulating carbon emissions from power plants. 

Known as RGGI, the initiative includes 11 nearby states that cap greenhouse gas emissions from electric power plants and trade emission allowances to qualifying power plants to emit carbon pollution. The cap on carbon emissions would be lowered over time, and revenue raised from the carbon caps would fund other initiatives ranging from environmental programs and utility assistance to workforce development for out-of-work fossil fuel workers. 

“RGGI is also important for environmental justice communities,” Patrick McDonnell, secretary of the Pennsylvania Department of Environmental Protection, said in a statement. “The initiative creates a financial incentive to reduce carbon pollution to which environmental justice communities are often more vulnerable due to social and economic factors. Communities facing environmental justice issues are likely the first communities to feel the effects of climate change through heatwaves and flooding, while also likely being communities with the fewest financial resources to adapt.”

The legislation was drafted in response to a 2019 executive order from Gov. Tom Wolf that ordered the state Department of Environmental Protection to begin drafting the rule. Wolf and the GOP-controlled legislature have gone back and forth since then, with Republicans’ legislative efforts to block the initiative coming up short. 

Earlier this month, the Commonwealth Court issued a one-page order stating the regulation could not take effect pending a full order from the court. The injunction was lifted on April 11, clearing the way for the Legislative Reference Bureau to publish the regulation. The bureau will publish the final form rule Saturday. 

“Pennsylvanians understand that RGGI’s market-based mechanism supports the clean energy future they want, need, and know will bring about jobs and economic development that is sustainable in the long term while providing investments that can lower electric bills,” Mandy Warner, the Environmental Defense Fund’s director of climate and clean air policy, said in a statement. “Instead of obstructing progress and endangering Pennsylvania’s future, the Pennsylvania legislature should move on the RGGI Investments Act, a bill that will spur investment in transitioning energy communities and in environmental justice communities that have long sought support from state leaders.”

Republicans have argued that the initiative will be costly to the state and consumers as the state attempts to transition its energy production. An Independent Fiscal Office analysis found that the commonwealth could get more than $700 million in revenue from the program’s emissions permits. Critics of the plan argue that those extra costs borne by energy producers will be passed onto consumers. 

“Gov. Wolf unilaterally and illegitimately entered Pennsylvania into this multi-state carbon tax program to the detriment of Pennsylvanians,” Jason Gottesman, House Republican spokesperson, said in a statement. “At a time when we should be incentivizing the use, development, and deployment of our home-grown energy resources, this final step to enter Pennsylvania into RGGI is a signal to our neighboring states and the rest of the world that the Wolf administration is not serious about American energy independence and the economic benefits associated with a robust and growing energy economy.”

Despite this being the final regulatory step, it’s unclear what the future holds for Pennsylvania’s inclusion in RGGI. Starting July 1, the commonwealth is now slated to become the first major fossil-fuel-producing state to enter the initiative, but legal challenges from Republican leadership and other groups are expected.