Incoming Virginia Governor Vows to Reduce Energy Costs by Exiting Regional Cap-and-Trade Scheme

Incoming Virginia Governor Vows to Reduce Energy Costs by Exiting Regional Cap-and-Trade Scheme
Virginia Gov.-elect Glenn Youngkin speaks at an election night party in Chantilly, Va., early Nov. 3, 2021. (Andrew Harnik/AP Photo)
Matthew Vadum

Virginia’s incoming Republican governor is vowing to withdraw his state from a regional carbon emissions-trading exchange to which 10 coastal and New England states currently belong—a move that, if successful, would be a major setback for the left-wing environmentalist movement.

During a Dec. 8 address to the Hampton Roads Chamber of Commerce, Gov.-elect Glenn Youngkin described the Regional Greenhouse Gas Initiative (RGGI) as a “carbon tax that is fully passed on to ratepayers,” saying he would issue an executive order to take the state out of the interstate compact when he’s inaugurated next month, The Hill newspaper reported on Dec. 9.

Virginia became part of the RGGI by way of an amendment offered by outgoing Gov. Ralph Northam, a Democrat, to a bill that Virginia’s General Assembly approved in 2020.

U.S. Rep. Don Beyer (D-Va.) told reporters that Youngkin can’t pull the state from the compact unilaterally. Beyer is one of the wealthiest members of Congress, having made his fortune by selling gasoline-based automobiles, which environmentalists blame for global warming.

“The Virginia Clean Energy Economy Act is law which cannot be undone by executive fiat [and] our Commonwealth should and legally must meet these important clean energy targets,” Beyer reportedly said in a statement.

“RGGI brings millions of dollars to Virginia to help with that transition, a transition that also is vital to addressing the coastal flooding the Governor-elect promised to combat. An executive order that costs Virginia dearly in the middle and long term is not a good financial move, and it isn’t the kind of pragmatic approach that Virginians expect from their elected leaders in either party.”

RGGI—some pronounce the acronym as “Reggie”—describes itself as “a cooperative, market-based effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia to cap and reduce CO2 emissions from the power sector. It represents the first cap-and-invest regional initiative implemented in the United States.”

Critics say such a cap-and-trade system functions as an energy tax in disguise, driving up energy costs for American businesses and families.

Such systems aim to reduce the quantity of carbon dioxide, the gas expelled from our lungs when we exhale, that is released into the atmosphere, on the controversial theory that it contributes to global warming. The system imposes limits on how much carbon dioxide is emitted by each state, and when industry actors exceed their limits, they can purchase the right to produce that excess gas for a fee. These emission coupons, or credits, have a value and can be traded, and the companies involved pass on the extra costs to their customers.

In RGGI’s system, utilities in the affected states purchase credits to offset emissions that exceed prescribed limits. Those revenues fund energy assistance for low-income residents.

Pennsylvania Gov. Tom Wolf, a Democratic, has been trying to get state lawmakers to agree to have his energy-rich state join RGGI but so far hasn’t been successful.

“Participating in RGGI will further our commonwealth’s climate goals, mitigate ongoing damage from climate change, and invest in our workforce. Funds brought in through RGGI will allow us to make targeted investments to support workers and communities affected by energy transition, invest in environmental justice, and strengthen Pennsylvania’s clean energy, commercial, and industrial sectors,” Wolf said in July.

Youngkin also reportedly said in his speech that Dominion Energy, his state’s primary electric utility, has asked to be allowed to pass on its RGGI-related costs to its customers.

“I promised to lower the cost of living in Virginia, and this is just the beginning,” he said.

Republican state lawmakers in Virginia, who wrested control of the House of Delegates from Democrats in last month’s elections, say they will undo costly environmental legislation passed by the Democrats.

Delegate Todd Gilbert, a Republican who will become the next House speaker, said last month that his colleagues will reduce energy costs for Virginians.

“What [environmental legislation] did was, by the State Corporation Commission’s estimation, make the average Virginia family pay $800 more a year in energy bills,” Gilbert said at a news conference, according to The Hill. “That’s certainly another area we’d like to revisit because we think that went way too far.”

Matthew Vadum is an award-winning investigative journalist.
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