“RGGI Is Unconstitutional, Harmful, and Useless”, By André Béliveau

“Pennsylvania’s membership with RGGI was problematic from the onset. Former Gov. Tom Wolf entered Pennsylvania into RGGI through a unilateral executive order, usurping the legislature's…”

RGGI Is Unconstitutional, Harmful, and Useless

By André Béliveau
January 06, 2025

The Pennsylvania Supreme Court is on the cusp of shaping the commonwealth’s economic future. The court will soon rule on the constitutionality of Pennsylvania’s entry into the Regional Greenhouse Gas Initiative (RGGI), the multistate cap-and-trade program that would impose a new energy tax on Pennsylvania power producers, impacting consumers’ electric costs. The state’s top court will decide whether the Keystone State prospers from energy abundance or falls victim to energy poverty.

Pennsylvania’s membership with RGGI was problematic from the onset. Former Gov. Tom Wolf entered Pennsylvania into RGGI through a unilateral executive order, usurping the legislature's sole constitutional authority to levy taxes.

Wolf’s executive action was unconstitutional. Without the power of the purse, he could not legally create the new tax necessary for RGGI membership. Thankfully, the Commonwealth Court overruled Wolf’s unilateral act, stating “[t]he power to levy taxes is specifically reserved to the General Assembly.”

Unfortunately, this decision wasn’t final. Wolf’s successor, Gov. Josh Shapiro, appealed, and now the decision sits before the Pennsylvania Supreme Court.

A policy with such significant, statewide economic impact deserves open, rigorous debate to continue in the legislature, where it belongs. Ideally, the court will soon affirm the lower court’s decision.

Shapiro’s appeal pushes a troubling precedent that has nothing to do with the environment. Executive authority is the impetus. In a statement, the Shapiro administration highlighted the need to “protect that important authority for this Administration and all future governors.”

Clearly, Shapiro wants RGGI for political leverage. The governor proposed an alternative to RGGI: the Pennsylvania Climate Emissions Reduction Act (PACER). Rather than participating in a multistate compact, PACER is another energy tax scheme targeting hydrocarbon energy based solely in the Keystone State. Shapiro openly admitted that if lawmakers approved PACER, he would “pull out of RGGI.”

But neither PACER nor RGGI is what Pennsylvania needs. Cap-and-trade schemes are a tax on modern life. They punish consumers, encourage deindustrialization, and arbitrarily manipulate markets in ways that do more harm to our economic environment with no clear positive impacts on our natural environment.

RGGI is a solution searching for a problem. Pennsylvania has not only expanded energy production but also reduced carbon emissions. The Independent Fiscal Office (IFO) found that the commonwealth reduced emissions by nearly 11% between 2018 and 2023 – all without RGGI. IFO also found that Pennsylvania was one of only two states in the region that reduced emissions and boosted production.

While the benefits of RGGI are limited, the harm it would cause is palpable. Some economic models estimate RGGI would increase Pennsylvanians’ electric bills by 30%. Also, the loss of jobs and revenue would disproportionately harm economically vulnerable communities, especially in rural Pennsylvania.

RGGI is wildly unpopular with Pennsylvanians – only 22% support it. Moreover, when asked what lifestyle changes they would make to help protect the environment, 69% said they would make personal conservation choices (e.g., turning off lights, appliances, and electronics when not in use), while only 4 % said they’re willing to pay more for green energy.

Pennsylvanians are not buying what Shapiro is selling.

Instead, lawmakers must blaze a new trail, focusing on more pragmatic criteria. This means crafting legislation establishing source-neutral standards that emphasize grid reliability and adequacy. Put differently, energy must be stable and affordable. So long as the competing energy sources – nuclear, solar, or gas – achieve those baseline standards, they can power the grid.

A robust energy marketplace is paramount. Rather than picking winners and losers, sound public policy fosters a competitive environment. This requires a predictable regulatory environment with streamlined permitting and reduced red tape.

This is not a radical request. All forms of energy, including solar and wind, benefit from regulatory certainty.

Energy abundance can peacefully coexist with commonsense environmentalism. Lawmakers should promote responsible environmental conservation, focusing on forest management, ecosystem restoration, and agriculture.

Pennsylvania is a national leader in energy production – and it’s in the commonwealth’s best interest to stay that way. The future of Pennsylvania’s energy sector is not RGGI, PACER, or any other top-down governmental machination. Instead, a competitive marketplace – backed by a streamlined regulatory environment and promoted by reasonable policies that champion affordability and reliability – will secure Pennsylvania’s place as leading American energy dominance.

André Béliveau is the Senior Manager of Energy Policy at the Commonwealth Foundation, Pennsylvania’s free-market think tank. X: @TheRealBeliveau