Pennsylvania Lawmakers Seek to Block Cap-and-Trade Efforts

June 21, 2020 Updated: June 21, 2020

State lawmakers in Pennsylvania are poised to vote on a bipartisan bill that would prevent Gov. Tom Wolf from imposing carbon emissions taxes without their approval.

They oppose the governor’s measure on two grounds: a constitutional objection that the governor doesn’t have the authority to act without legislative approval, and concerns about the merits of the proposal.

State Rep. Pam Snyder, a Democrat representing the 50th District in Carmichaels, has joined with state Rep. Jim Struzzi, a Republican representing the 62nd District in Indiana County, on HB 2505, which has already advanced out of the House Environmental Resources and Energy Committee and may be up for a full vote in the House as early as this week.

The legislation calls on Wolf’s Department of Environmental Protection “to conduct a public comment process on and submit to the General Assembly a measure or action intended to abate, control or limit carbon dioxide emissions by imposing a revenue-generating tax or fee on carbon dioxide emissions.”

In October, Wolf announced that he was taking executive action to have Pennsylvania join the Regional Greenhouse Gas Initiative (RGGI), a multistate climate change agreement that makes use of a “cap-and-trade” program to limit carbon dioxide emissions.

Energy policy analysts and industry officials who testified before the state’s House Environmental Resources and Energy Committee in February during a hearing on HB 2505 told committee members that RGGI would raise energy prices on Pennsylvania residents, shut energy facilities, and drive out jobs, all without any discernible benefit to the environment.

For example, David Stevenson, director of the Center for Energy and Environment at the Caesar Rodney Institute, a free-market think tank in Delaware, cited studies that showed “RGGI has added nothing to the reduction of carbon dioxide” while raising electricity prices.

Vince Brisini, the director of environmental affairs for Olympus Power, described RGGI as a “nuclear-tipped economic cruise missile aimed at the coal-fired power plants and at the citizens located in Allegheny, Armstrong, Cambria, and Indiana Counties.”

These counties sit at “ground zero” for RGGI, he said.

Bipartisan Effort

During the hearing, Struzzi told committee members that his bill was written “in direct response” to Wolf’s October announcement and that the bill “basically says that before any attempt to enter into RGGI is undertaken, it needs to go through the legislature first.”

While Struzzi is also opposed to RGGI on its merits, his legislation is focused on ensuring that the governor doesn’t overstep his authority and circumvent the legislative process.

“As elected officials who represent the people, we need to have input over something that has statewide implications,” he told The Epoch Times. “It’s disconcerting to see the governor and the Department of Environmental Protection moving ahead unilaterally.”

Snyder, who is one of seven House Democrats listed as co-sponsors of HB 2505, has expressed concern about the potential economic impact RGGI could have on her constituency. She also made it clear in public statements that the General Assembly should have say over whether Pennsylvania joins the climate change agreement.

“I’ve made no secret about my opposition to the Regional Greenhouse Gas Initiative,” Snyder said in a statement. “It’s bad news for our region. Locally, we’ve made strides and continue to do so to protect the environment without needing it.

“I was proud to support HB 2505, which specifically outlines the process that the General Assembly has before the state could impose a carbon tax on energy suppliers or join any multi-state program, like RGGI. I will continue to support our region and our area’s strong coal and energy industries and protecting family-sustaining jobs!”

The Epoch Times called and emailed Wolf’s press office multiple times asking if the governor had any comment on the pending legislation. The Epoch Times asked Lyndsay Kensinger, Wolf’s press secretary, what the governor’s position is on the bill and if the governor is confident he has the authority to press forward on RGGI without legislative approval. The Epoch Times also asked Kensinger if the governor had any concerns about RGGI’s effect on energy prices that could possibly add to financial burden of the COVID-19 pandemic.

Although Wolf’s office acknowledged the inquiry, the governor didn’t immediately provide a response.

Momentum-Building

Rep. Jonathan Fritz, a Republican from Honesdale, who chairs the Subcommittee on Parks and Forests, sees momentum building against Wolf’s executive order.

He points to the actions of two citizen advisory councils attached to the Department of Environmental Protection. In May, the Citizens Advisory Council voted 9–4 against moving forward with RGGI, while the Air Quality Technical Advisory Committee couldn’t muster enough votes to support the proposal.

“We now have two advisory panels that have recommended against joining RGGI, and this should give the governor good reason to pause,” Fritz said in an interview.

“There is also bipartisan opposition to joining with RGGI. We have Democratic colleagues in coal regions that are very concerned about the economic fallout. This will have a dire impact on their towns and communities.

“We don’t need any new initiatives, since we have already met or exceeded air quality improvement goals. We have taken steps that led to an improved environment without adding any costly new regulations that we certainly don’t need during this time of COVID19.”

RGGI currently includes 10 states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Virginia is expected to join next year, now that Gov. Ralph Northam has received legislative approval for the move.

Under RGGI’s “cap-and-trade” plan, participating government officials put an upper limit or “cap” on the amount of CO2 emissions that power plants are allowed to emit, but also create “allowances” within interstate auctions that may be traded back and forth among energy companies subjected to the CO2 caps.

The rationale behind cap-and-trade is to provide energy companies with financial inducements to reduce emissions. Companies that meet or exceed emissions targets may sell any excess allowances to companies that have not done so.

Stevenson, the energy policy analyst from Delaware, offered some sobering numbers during his February testimony based on RGGI’s own forecasts of allowance costs, which he then added to the anticipated loss in coal production, the loss in electricity sales to other states, and the projected increase in electricity prices. All told, Stevenson found that Pennsylvania would be looking at an economic effect of about $5.5 billion per year, which translates to $1,150 per household.

The Pennsylvania Department of Environmental Protection and Secretary Patrick McDonnell, who participated in House testimony last October about carbon emissions and climate change, didn’t immediately respond to a request for comment about concerns raised about RGGI’s costs and the legality of Wolf’s executive order.

At the time, McDonnell expressed his interest in working with the state legislature to implement a new rule enabling Pennsylvania to become part of the greenhouse gas initiative. He also said the Wolf administration has a “comfort level” with RGGI’s “track record.”

Predicting Negative Effects

But Struzzi, the main sponsor of the House bill, remains skeptical that any benefits from RGGI will accrue to Pennsylvania.

“The real conundrum here is that there is no evidence RGGI will have even a small impact on the environment,” he said. “But it is for certain that it will shut down power plants. Just the fact that Pennsylvania officials are talking about RGGI is enough to drive away business.”

The House’s bipartisan efforts to put a check on Wolf’s unilateral actions appears to have aroused the General Assembly’s upper chamber. The Senate Environmental Resources and Energy Committee is scheduled to hold a hearing on June 23, “to examine Pennsylvania’s participation” in RGGI, which will be webcast live on the committee’s website.

State Sen. Joe Pittman, a Republican representing the 41st District in Indiana County, is sponsoring a companion bill (SB 950) to Struzzi’s House legislation aimed at reaffirming the constitutional role of the General Assembly.

Pennsylvania’s lawmakers “have good reason to be concerned” about Wolf’s attempt to draw the state into RGGI, says Bonner Cohen, a senior fellow with the National Center for Public Policy Research.

“Not only does Wolf’s unilateral action circumvent the legislature, it places tremendous financial burdens on ordinary Pennsylvanians—at the worst possible time,” Cohen said. “Every state that has joined RGGI has wound up imposing significantly higher electricity costs to families and businesses. If one were to devise a scheme to guarantee outmigration of people and businesses, membership in RGGI would be one of the first steps.”