Pennsylvania Finally Joins Regional Greenhouse Gas Trading Program

Photo: Marc Levy, AP via Philadelphia Inquirer

The Philadelphia Inquirer reported that Governor of Pennsylvania signed an Executive Order last week committing the state to implement a cap-and-trade program (known as the Regional Greenhouse Gas Initiative or RGGI) for carbon dioxide emissions from power plants joining 10 other states in the northeast that are members — Virginia is now the lone holdout.  By 2020, Pennsylvania will come up with a carbon dioxide cap that limits emissions within the state from electric power generators who will each receive an individual carbon budget, and after that, if a power plant wants to exceed its emissions budget it has to purchase “allowances” to pollute from other plants who have extra allowances to sell — thus putting a “price on carbon” pollution.

Why This Matters:  Pennsylvania is the first major fossil-fuel producing state to join the RGGI.  This regional cap-and-trade program has been a true success — from 2005-2015 the initiative had reduced power-sector carbon dioxide pollution by 45% as well as provided $2.31 billion in lifetime energy cost savings to more than 161,000 households and 6,000 businesses that participated in programs funded by the initiative.  And the economy in the region has grown at the same time.  The RGGI is an excellent model of a market-based climate solution that could be replicated in other regions of the U.S. should a Democrat beat President Trump in 2020.

Pennsylvania’s Governor Took the Initiative

Governor Tom Wolfe (a Democrat) used authority under the state’s air pollution law to finally join (New Jersey is rejoining after dropping out during Governor Chris Christie’s terms of office) but the Republicans in the state legislature called the move illegal. Wolfe said in a statement,

“”If we want a Pennsylvania that is habitable for our children and grandchildren, where temperatures aren’t in the 90s in October … where flooding doesn’t destroy homes and businesses over and over again, we need to get serious right now about addressing the climate crisis.”

Pennsylvania is second only to Texas in natural gas production, and third behind Wyoming and West Virginia in coal. Because it is market-based, the RGGI, in essence, puts a price on carbon in the electricity marketplace.  As a result, the true cost of carbon is actually charged for its use, but it also is likely to result in a  reduction in demand for those fuels that emit greenhouse gasses —  and coal is expected to take the biggest hit at first, according to Inside Climate News.

Map: Philadelphia Inquirer

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