CJFP Statement in Favor of Proposed Rulemaking: CO2 Budget Trading Program

December 8, 2020

As a board member of the Clean Jobs for Pennsylvania coalition and a councilman with Carlisle Borough, I give my full, unwavering support to this rulemaking.

Members at CJFP stand for the creation and preservation of clean energy jobs in the Commonwealth – and the Regional Greenhouse Gas Initiative (RGGI) is absolutely critical in achieving those goals.

Pennsylvania is at a crossroads. As a national leader in the energy sector, thousands of jobs rely on electricity generation. But some of those forms of electricity generation lead to dirty air and health consequences. To put it starkly, Pennsylvania ranks 41st in renewable energy consumption as a share of state total. Furthermore, ignoring the negative social costs of greenhouse gases, which the United States Supreme Court has repeatedly affirmed is a harmful pollutant under the Clean Air Act, continues to be a public policy failure. The overwhelming number of economists who support a price on carbon as an efficient way to internalize these externalities provides solid economic footing for this rule. Interestingly, bipartisan cooperation, led by Republican lawmakers in the Clean Air Act Amendment of 1990, directed the EPA to manage a market-based emission trading system to mitigate the sources of acid rain, Sulfur dioxide and Nitrogen oxides. The costs of achieving these environmental objectives with cap-and-trade were significantly less than they would have been with a command-and-control regulatory approach with estimates ranging between 15 percent, and perhaps as much as 90 percent. It worked! And it’s working again with carbon mitigation under RGGI.

With RGGI, polluting fossil fuel plants pay for the social and health costs of carbon emissions they release into the air. It allows owners of electric generators to gradually reduce their abatement costs in a fair, market-based system. Despite numerous unfounded claims that we don’t understand how RGGI will specifically impact PA, Resources for the Future, a leading research institute on energy and environmental policy yielded four significant findings from PA’s potential entry into RGGI: 1) significant emissions reductions in Pennsylvania and the US, 2) An unobservable change in electricity prices, 3) increased nuclear generation and decreased natural gas generation in Pennsylvania, 4) increased natural gas and nuclear generation and energy exports in Pennsylvania. All of these outcomes are favorable for our climate and economic goals. In its first decade, RGGI has generated net positive economic value for the participating states’ economies on the order of $4.7 billion dollars, has led to tens of thousands of job-years while also helping to dramatically reduce carbon emissions in the RGGI states’ electric sector, decreasing by 45 percent between the base period of 2006-2008 and the period of 2015-2017. A study covering a five-year period showed that RGGI’s co-benefits on human health exceeded $5 billion. Pennsylvania, and other RGGI states, using the revenues from carbon emissions, can choose to invest in energy efficiency and clean job creation programs.

Pennsylvania is behind the curve in addressing GHGs and the other harmful air pollutants that accompany their release. It’s time for us to support our skilled workforce and advance it into clean electricity production. The benefits are clear: clean air; improved public health; high-paying jobs; and affordable electricity prices. Clean jobs are the future of our energy economy.

Around the nation and in Pennsylvania, coal plants are retiring or converting to natural gas. This affects local workers, communities, and businesses. However, RGGI presents an unparalleled opportunity for the legislature to direct funds to these workers and communities to help transition to a clean energy economy.

Pennsylvania has begun adding renewable energy sources like wind and solar, which is an important step in the right direction. However, Pennsylvania’s policies still favor dirty electricity sources over clean ones like wind, solar and nuclear power. This unfair advantage stifles new, clean energy projects and threatens to prematurely shut down emissions-free nuclear power plants. Nascent technologies, yet to be commercialized, such as small modular reactors and green/blue hydrogen must be able to compete on a level playing field. The Federal Energy Regulatory Commission’s recent (Minimum offer Price rule) MOPR ruling that penalizes states for promoting renewable generation makes it crystal clear that Pennsylvania must use every policy tool to meet their GHG targets.

CJFP urges lawmakers to support the CO2 Budget Trading Program so that we can move Pennsylvania’s climate goals and economic vitality forward.

Thank you.

Joel Hicks
Councilman, Carlisle Borough