Regional Greenhouse Gas Initiative
Governor Wolf states that climate change is the most critical environmental threat confronting the world, and given that power generation is one of the biggest contributors to greenhouse gas emissions, it is time to take concrete, economically sound and immediate steps to reduce emissions. To do so, Governor Wolf recently signed an Executive Order that directed DEP to begin a rulemaking process that will allow Pennsylvania to join the Regional Greenhouse Gas Initiative (RGGI), with the goal of reducing carbon emissions from the electricity sector.
Participating states have agreed, either through regulation or legislation, to implement RGGI through a regional cap-and-trade program involving CO2 emitting electric power plants. These states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) set a cap on total CO2 emissions from electric power generators in their states. New Jersey and Virginia are expected to be participants in RGGI over the next two years.
What Does RGGI Mean for PA?
RGGI is composed of individual carbon budget trading programs in each state, based on each state’s independent legal authority. RGGI provides a “model rule” for each state to adopt independently that then “links” with other states to allow for the interstate buying, selling, and trading of auction credits. This allows states to essentially regulate independently, while it increases the supply of available credits to level the price.
RGGI is an effective way to reduce emissions without impacting economic growth. RGGI states have reduced power sector CO2 pollution by 45 percent since 2005, while the region’s per-capita GDP has continued to grow. Through its first six years of existence, RGGI investments were found to return $2.31 billion in lifetime energy bill savings to more than 161,000 households and 6,000 businesses that participated in programs funded by RGGI proceeds, and to 1.5 million households and over 37,000 businesses that received direct bill assistance.
Governor Wolf’s Executive Order directs DEP to develop and present a regulation to the Environmental Quality Board by July 31, 2020. The regulatory process will include significant opportunity for engagement by the General Assembly, key stakeholders, and residents of Pennsylvania who by a wide margin support the state taking concrete steps to address climate change. DEP will continue to engage with these stakeholders as the regulation is developed. Check back for updates on progress of this effort.
Learn more about the Regional Greenhouse Gas Initiative and its results over the last ten years.