In a rare moment of concord between industry and unions, representatives of both interests exhorted Pennsylvania state senators on Tuesday to resist Pennsylvania’s entry into the Regional Greenhouse Gas Initiative (RGGI).
Eleven states in the northeast and mid-Atlantic regions have joined the pact to impose prices on carbon emissions for power plants. Unlike most member states, however, Pennsylvania entered into the agreement without legislative approval though an executive order by Gov. Tom Wolf (D) in 2019. The emissions pricing has not yet gone into effect; the governor wants to implement it in the next fiscal year.
Given the bipartisan opposition to RGGI, signing Pennsylvania onto it would have no chance of happening with legislative sanction. Remarks at Tuesday’s Senate hearing held jointly by the Environmental Resources and Energy Committee and the Community, Economic and Recreational Development Committee demonstrated why this is so.
Before hearing from business and labor organizations, the senators called upon Pennsylvania’s Independent Fiscal Office director Matthew Knittel to discuss the estimated revenue that the state could receive if it implements the carbon-emission charges that RGGI would entail. Knittel said annual RGGI revenues could total nearly $800 million. The state treasury may welcome that, but many ordinary Pennsylvanians won’t.
The IFO director said the economic modeling used to generate revenue estimates suggests “the majority of the costs would be passed on to final consumers,” i.e., state residents and businesses, with low-income Pennsylvanians feeling an especially acute sting from the expenses. He also said that, despite supporters of the initiative insisting that the prices it assesses on entities for carbon discharge don’t amount to taxes, many Pennsylvanians will discern their effect as similar to taxation.
“It acts like other excise taxes like gasoline taxes or a soda tax or a cigarette tax in that it’s passed onto final consumers,” Knittel said.
Other testifiers at the hearing said RGGI will not only result in higher energy bills but also cost high-paying blue-collar jobs and end Pennsylvania’s current position as the number one state exporter of energy in the United States.
Carl Marrara, vice president of government affairs at the Pennsylvania Manufacturers’ Association, said implementation will almost certainly force the closure of five coal-fired power plants and noted thatf those facilities have dedicated billions of dollars to comply with federal and state air-quality rules. He also mentioned that no natural-gas-fired power plants have been proposed for construction in Pennsylvania since Wolf announced entry into the pact in 2019, while multiple such plants have been built in the bordering, non-RGGI states of Ohio and West Virginia.
Marrara and other speakers observed that carbon-emission pricing for entities subject to RGGI has more than doubled since 2019 to $13.50 per ton now; thus, an effort that would have exacted major costs without current inflation and the Russia-Ukraine conflict promises to wreak even more severe economic damage presently.
He said that a major share of this damage will be inflicted on manufacturers — “the engine that drives our Commonwealth’s economy” — many of whom he anticipates will leave the Keystone State for more business-friendly territory where energy costs are lower.
“Pennsylvania is perhaps the most regulated, safest [state] and [it] provides the best working conditions of any energy producing state or nation,” Marrara said. “Both economically and environmentally, it is the smartest choice to want that activity to happen here as opposed to elsewhere in the world. RGGI is the anthesis of this idea and we urge you to do everything in your power to reject Governor Wolf’s unilateral entry into this multi-state compact.”
Representatives of the International Brotherhood of Electrical Workers (IBEW) and the International Brotherhood of Boilermakers echoed that sentiment.
“Once these power plants shutter, people will be forced from their jobs,” IBEW representative Kris Anderson said. “Seeing the lack of economic opportunity in their community, and not receiving any assistance, these people will have no choice but to flee the state of Pennsylvania.”
Another point RGGI opponents frequently made at the hearing was that Pennsylvania has dramatically reduced CO2 emissions in recent years, even as hydraulic fracturing has spurred a natural-gas boom. That is because natural gas is a much cleaner electricity source than other fossil fuels.
According to Kevin Sunday, government affairs director at the Pennsylvania Chamber of Business and Industry, Pennsylvania has proportionally cut carbon discharge 2.5 times more than RGGI member states since the program began implementation in 2008.
– – –