Five for Friday: Breaking down the RGGI rulings and what they mean

Two Commonwealth Court decisions cleared the air this week on whether Pennsylvania could enter into an interstate program to reduce carbon emissions, ruling then-Gov. Tom Wolf’s attempt to join the Regional Greenhouse Gas Initiative in 2019 was an overstep in executive power.

With uncertainty surrounding what the ruling means and whether an appeal is on the way, City & State has your Five for Friday, breaking down the RGGI rulings and what they mean for the commonwealth. 

What is RGGI?

The Regional Greenhouse Gas Initiative was established in 2009 to combat air pollution. The first mandatory market-based program of its kind, RGGI seeks to reduce greenhouse gas emissions by placing a cap on allowable emissions and using revenue generated from the pollution allowances to invest in green energy and consumer benefit programs. 

Participating states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia. Emissions caps gradually decrease year-over-year, with power sector emissions in participating states declining since the program began by more than 50%. 

How did this all start?

Wolf first moved to enter Pennsylvania into RGGI in 2019, but his executive decision was quickly countered with lawsuits from state Senate Republicans and energy interests. Plaintiffs in the recent rulings, which included energy companies and unions, argued the carbon allowances were an unconstitutional tax being levied by the governor and not the General Assembly. 

Proponents of RGGI claimed the program’s allowances are a licensing fee, which the governor doesn’t need legislative approval to impose. Last year, the Commonwealth Court issued an injunction that kept the state from entering RGGI, and the latest decisions struck another blow to the state’s potential entry into RGGI.

What happened in this week’s rulings?

In two separate rulings from the Commonwealth Court, Judge Michael Wojcik wrote that the rulemaking – the term for the regulation that outlines the carbon emissions plan developed by the Pennsylvania Department of Environmental Protection and the state Environmental Quality Board – “constitutes a tax that has been imposed … in violation of the Pennsylvania Constitution.”

Later in the opinion, Wojcik continued by saying “to pass constitutional muster, the Commonwealth’s participation in RGGI may only be achieved through legislation duly enacted by the Pennsylvania General Assembly, and not merely through the Rulemaking promulgated by DEP and EQB.”

In the accompanying order, the court voided the carbon pricing regulation developed by the agencies and enjoined DEP and the EQB from enforcing the regulation. 

What are the reactions in Harrisburg?

Much like the initial reaction to Wolf’s decision to enter Pennsylvania into RGGI, there’s been a mix of responses from lawmakers, energy interests, environmental advocates and other stakeholders.

Pennsylvania Senate Majority Leader Joe Pittman, a vocal opponent of Wolf’s decision to enter RGGI, said in a statement this week that the ruling was a “victory” for Pennsylvanians. “With this decision, we have the opportunity to finally close a tumultuous chapter and move forward to determine the best legislative solution to foster greater energy independence, while ensuring the responsible development of our God-given natural resources,” Pittman said. 

The ruling drew a similar response from Republicans in the state House. House Republican Leader Bryan Cutler urged Gov. Josh Shapiro to hold off on appealing the ruling. “I encourage the Shapiro administration, which has thus far refused to completely embrace RGGI and its associated energy tax, to not appeal today’s Commonwealth Court decision and give Pennsylvanians the certainty that this program will not add to the increasing costs they face,” Cutler said. 

A coalition of environmental advocacy organizations wants Shapiro to do the opposite and appeal the ruling to the Pennsylvania Supreme Court. The coalition, which includes PennFuture, Sierra Club Pennsylvania and the Environmental Defense Fund, among others, said in a joint statement that RGGI is one of the few options available for Pennsylvania to reduce its emissions. “There is no alternative program to help Pennsylvania waiting on the Governor’s desk,” the coalition said in a joint statement. “Governor Shapiro can still be a champion for clean energy and job creation, and he must appeal to the Supreme Court this bad decision for Pennsylvania’s future.”

What’s next? 

It remains up in the air whether the latest decisions will be appealed. Shapiro’s stance on RGGI has been less clear-cut than Wolf’s was. As reported by Spotlight PA, a spokesperson for Shapiro said the administration is “carefully reviewing” the decisions, and did not specify whether it plans to pursue an appeal.

“This decision is solely focused on the narrow question of whether this policy put in place by the prior administration constitutes a tax or a fee,” the spokesperson wrote.