Key Climate Regulation Closer to Finalization

Independent Regulatory Review Commission Approves CO2 Budget Trading Program Rulemaking
September 1, 2021

Today the state’s Independent Regulatory Review Commission concurred with the Environmental Quality Board, as well as the Department of Environmental Protection’s (“DEP”) Citizens Advisory Council, Small Business Compliance Advisory Committee, Environmental Justice Advisory Board, and Air Quality Technical Advisory Committee, to advance a proposed rulemaking that will reduce carbon dioxide emissions from Pennsylvania’s electric power sector.

Once finalized, this rulemaking will be the first of many necessary steps to address greenhouse gas emissions. It is particularly noteworthy because, despite adoption of the bipartisan Climate Change Act of 2008 and recurring reports about the urgency of action, the Commonwealth to date has failed to implement any comprehensive policy to address the emissions that cause climate change.

PEC supports this rulemaking, which would allow Pennsylvania to join the growing number of Northeast and Mid-Atlantic states participating in the Regional Greenhouse Gas Initiative (“RGGI”). Adopting a market-based approach to reducing CO2 emissions has long been a cornerstone of our decarbonization recommendations for the Commonwealth, dating back to 2007. RGGI offers the most adaptive and efficient means for the power sector to achieve targeted reductions while also providing investment opportunities in clean energy and community-centered initiatives.

In 2019, Pennsylvania’s power sector was the fourth largest emitter of carbon dioxide, the sixth largest emitter of sulfur dioxide, and the ninth largest emitter of nitrogen oxide in the country [EIA]. According to DEP projections, Pennsylvania’s participation in RGGI will reduce carbon dioxide emissions by a total of 180 million metric tons between 2022 and 2030. That’s equivalent to preventing emissions over the same time period from over 40 million passenger vehicles, over 48 average-sized coal-fired power plants, or over 31 million homes’ electricity use.

DEP modeling also found that by linking with RGGI, Pennsylvania could reduce 112,000 tons of NOx emissions and 67,000 tons of SOx emissions, with the health benefits of reducing these pollutants totaling up to $6.3 billion through 2030. This is consistent with what has occurred in the broader RGGI region. A 2017 report on the public health impacts of RGGI from 2009 to 2014 found that “the RGGI program improved air quality throughout the Northeast states and created major benefits to public health and productivity, including avoiding hundreds of premature deaths and tens of thousands of lost work days.” These benefits alone were valued at up to $8.3 billion.

Despite claims to the contrary, decarbonizing our electricity sector is essential to maintaining our status as an energy exporter.

Additionally, an update to a previous analysis presented to PJM, based on FACETS model runs of the U.S. electric sector, shows significant environmental benefits stemming from Pennsylvania’s proposed plan to establish a budget for power sector carbon emissions and participate in RGGI. By putting its power sector emissions under an emissions budget, Pennsylvania’s policy will reduce annual carbon emissions in the Eastern Interconnect by roughly 20 million tons in 2030. In other words, even after accounting for any potential shifts in power generation among states, the modeling results show that Pennsylvania’s participation in RGGI results in a significant net reduction in carbon emissions. And this benefit can be increased further through targeted investment of auction proceeds to further drive air pollution reductions and provide economic investment and consumer benefit.

Despite claims to the contrary, decarbonizing our electricity sector is essential to maintaining our status as an energy exporter. Failure to act will lead to emission increases in Pennsylvania as many zero-emitting power plants are expected to retire without RGGI and be replaced by higher-emitting power plants. It would also mean the potential forced curtailment of energy exports due to clean energy standards adopted by utilities and other states in our region, and a lack of incentives and investment for clean energy deployment in the Commonwealth. In other words, failure to decarbonize will only ensure the decline of Pennsylvania’s energy sector.

Today’s decision by IRRC is one of the final steps in the state rulemaking process. The Attorney General will make one final determination as to legality of the rule, while the General Assembly has the option to abrogate it. Despite overwhelming public support to address the emissions responsible for climate change, and a constitutional responsibility to protect public resources and human health, the legislature has failed to advance any legislative proposal to properly do so.

It is long past time to act. The RGGI rulemaking provides clear, demonstrated means to do so. PEC commends the Governor for advancing this rulemaking, and calls on the legislature to support the rule and to constructively act on directing auction proceeds to help already-impacted communities, propel clean energy generation, and promote job growth in our state.


image: Professor Ed Hawkins, University of Reading (CC-BY 4.0)


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