Pennsylvania Governor Wants To Create Independent Cap-and-trade Program

Pennsylvania Governor Wants To Create Independent Cap-and-trade Program - Carbon Herald
Pennsylvania Governor Josh Shapiro. Image: Flickr by governortomwolf at https://flickr.com/photos/130921112@N07/44910210101

On March 13 Pennsylvania Gov. Josh Shapiro announced his intention to withdraw the state from Regional Greenhouse Gas Initiative (RGGI) and establish a separate carbon cap-and-trade program.

The move is part of a proposed energy policy package aimed at reducing emissions and transitioning to renewables while creating 14,500 jobs.

The governor’s plan would see 70% of generated funds redirected to electricity bill rebates, while the remaining would be channeled towards supporting low-income citizens, energy efficiency measure, renewables, as well as carbon capture and storage for existing natural gas plants.

“We’ve got to reject the false choice between protecting energy jobs and protecting the planet. We can do both. We must do both. And doing nothing at this moment is not an option,” said Shapiro during a press conference.

The Pennsylvania Climate Emissions Reduction Initiative (PACER) would impose a fee on energy industry that generates carbon emissions, similar to the RGGI but with more independence and flexibility towards conditions within the state and in line with its interests.

As it stands 30% of all electricity generated in Pennsylvania is exported to other states.

Relevant: Washington Raises $300 Million From New Cap-and-Invest Market

The proposed Pennsylvania cap-and-trade program comes after Governor Shapiro established a working group in April 2023, consisting of industry, environmental and labor representatives. Its recommendation to reduce greenhouse gas emissions was clear and it also endorsed the establishment of a separate carbon market program.

Pennsylvania joined the RGGI under Gov. Tom Wolf in 2022, but the tax generated by the program was challenged as unconstitutional in a Commonwealth Court by a group of coal companies and some labor unions. The court ruled in favor of the plaintiffs, followed by an appeal from Governer Shapiro’s office which is still ongoing.

Read more: Virginia Wants To Leave The Regional Carbon Trading Program

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