Business and industry groups along with Republican leaders criticized Pennsylvania Gov. Tom Wolf’s executive order on Thursday instructing the Pennsylvania Department of Environmental Protection to join the Regional Greenhouse Gas Initiative (RGGI), which would impose a carbon tax on any carbon-emitting electric generation or usage in the commonwealth.
“Although the RGGI is referred to as a cap-and-trade program, its effect is the same as a direct tax or fee on carbon dioxide emissions because RGGI allowance costs are passed on from electric generators to consumers,” according to the Industrial Energy Consumers of Pennsylvania.
The nine Northeast and Mid-Atlantic states that currently participate in the RGGI participate aim to reduce carbon dioxide (CO2) emitted from electric power plants. These states set a cap on total CO2 emissions from electric power generators in their states. To comply with the cap, plants must purchase credits for the CO2 they emit at quarterly auctions conducted by RGGI. The proceeds from the auctions are allocated back to the states according to the amount of carbon subject to regulation in each state.
“Climate change is the most critical environmental threat confronting the world, and power generation is one of the biggest contributors to greenhouse gas emissions,” the governor said.
But business groups underscored the importance of pursuing environmental goals while also supporting economic growth.
“We encourage legislative input and an analysis of costs to ratepayers and the industry in order to ensure that the Commonwealth’s approach to greenhouse gas regulations is balanced, making sure to leverage the state’s great energy assets and encourage private-sector competition without stifling potential economic growth,” Gene Barr, the president and CEO of the Pennsylvania Chamber of Business and Industry said. “Climate change is real and so is the need to have the business community at the table to discuss solutions and consider the tradeoffs,” he added.
The Industrial Energy Consumers of Pennsylvania said the RGGI cost imposed on electric generators in Pennsylvania will raise the cost of electricity to Pennsylvania residents, commercial businesses and many energy-intensive industrial manufacturers. “For these large industrial manufacturers, this places them at a competitive disadvantage to facilities in other states and countries that do not incur the cost of a RGGI-like program.”
Republicans serving in the House and Senate also criticized the governor’s executive order for bypassing legislative approval.
“Our state is not an autocracy, and one-sided decisions as significant as this leave out the important voices of Pennsylvania workers, communities and families whose livelihood is built upon important sectors of our energy economy,” House Republican leaders said in a statement. “Pennsylvania’s energy sector is currently reducing greenhouse gas emissions, by as much as 30 percent in recent years according to some estimates, and the industry is doing this without burdensome regulations.”
Senate President Pro Tempore Joe Scarnati (R-25) and Senate Majority Leader Jake Corman (R-34) said that effort to reduce greenhouse gas emissions should adhere to the four energy principles of Senate Republicans: maintaining a diverse energy portfolio; keeping energy rates affordable and low; requiring current RGGI members to utilize all aspects of Pennsylvania’s energy portfolio; and implementing any carbon reduction plans through an appropriate legal manner.
“We expect that the legislature will have the opportunity to engage in this process, to make sure that any change in energy policy ensures a balance between safeguarding the environment, preserving energy jobs and protecting ratepayers,” they said.
The governor’s executive order directs the Department of Environmental Protection to draft a regulation to present before the Environmental Quality Board for approval. A public comment period will follow, and DEP will conduct outreach to the business community, energy producers and labor and environmental stakeholders.
Gov. Wolf, a Democrat, said, “The conversation we’ve begun over the past year needs to continue if we are going to craft regulations that fit Pennsylvania’s unique energy mix, while making sure that the transition to a cleaner energy mix doesn’t leave behind workers and communities our state has relied on for decades to produce its power. And it will take buy-in from the legislature to ensure we’re protecting Pennsylvanians from the increasing effects of the climate crisis.”