submitted by PennEnvironment Research & Policy Center
The Commonwealth of Pennsylvania missed out on approximately $1.5 billion in carbon credit sales by not participating in the September 6th quarterly auction of the Regional Greenhouse Gas Initiative (RGGI).
The Commonwealth should have started bidding in these auctions once the Office of the Attorney General and the Department of Environmental Protection (DEP) signed off on Pennsylvania’s participation in RGGI in 2022.
However, ongoing litigation by fossil fuel interests has kept Pennsylvania from taking advantage of these opportunities to save taxpayers money while simultaneously improving our air quality.
“The extreme weather events experienced in Pennsylvania, across the nation, and around the globe during the summer of 2023 should serve as a stark reminder about the urgent need to reduce global warming and promote the climate solutions at our fingertips today,” stated PennEnvironment Executive Director David Masur. “RGGI is a critical part of those solutions.”
RGGI is a bipartisan, multi-state climate program involving a dozen New England and Mid-Atlantic states, from Maine down to Virginia.
It is also the nation’s first market-based regulatory effort to reduce greenhouse gas (GHG) pollution.
September 6th marked the 61st RGGI auction of carbon dioxide (CO2) allowances (each allowance represents a limited license to emit one ton of carbon pollution) since the auctions began in 2008.
Allowances were sold at the most recent auction for $13.85, and with Pennsylvania’s power plants emitting nearly as much carbon as those in the 11 other RGGI participating states combined, it’s estimated that the Commonwealth missed out on more than $210 million this quarter alone.
“While Pennsylvania’s program is stuck in limbo, the transition away from coal continues, yet our communities are still losing out on critical funding to help address that transition,” said Tom Schuster, Director of the Sierra Club Pennsylvania Chapter. “We should be jumpstarting our clean energy economy, reducing pollution in overburdened communities, and providing direct financial assistance to host communities where power plants have already retired or will in the near future.”
RGGI proceeds are historically used by states participating in the program to fund energy conservation and efficiency improvements.
Also, they often support clean transportation and renewable energy projects including home weatherization, rebates on energy efficiency appliances and initiatives to help businesses and consumers install solar energy systems.
Yet, nearly a year-and-a-half after finalizing the regulatory requirements to clear the way for Pennsylvania’s participation in RGGI, the Commonwealth has been unable to tap into the significant investment opportunities of the program due to ongoing litigation by fossil fuel interests.
The barriers include the Bowfin KeyCon action, on which the Commonwealth Court heard oral arguments last November. Also, they include the related Senate Intervenor action, on which the Pennsylvania Supreme Court heard oral arguments in May 2023 on an appeal of the lower court’s preliminary injunction of RGGI.
Either court could issue an opinion at any time.
We owe it to our children, grandchildren and future generations to do everything in our power to solve climate change,” noted Clean Air Council Executive Director Joe Minott. “Participating in RGGI helps us deliver the legacy of a climate-safe future.”
Environmental advocates tabulated the cumulative $1.5 billion in missed revenue by evaluating the likely number of allowances that Pennsylvania would have offered for sale at each quarterly auction and multiplying those figures by the respective allowance clearing price at each auction.
The final 2023 auction for RGGI credits is currently scheduled to take place December 6th, 2023.