Governor Tom Wolf is Addressing Climate Change through Electric Sector Emissions Reductions

On April 29, 2019, the Pennsylvania Department of Environmental Protection (PADEP) issued a Climate Action Plan that identifies greenhouse gas (GHG) emissions trends and baselines in the Commonwealth, recommends cost-effective strategies for reducing or offsetting GHG emissions, quantifies costs and benefits of these strategies, and recommends limiting carbon emissions through an electricity sector cap and trade program.

What’s Next?

On October 3, 2019, Tom Wolf, Governor of the Commonwealth of Pennsylvania, issued Executive Order 2019-07.  Pennsylvania has identified the following related to GHG emissions¹:

• Currently, 30 percent of Pennsylvania’s total GHG emissions are produced by the electricity generation sector.
• The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort of Nine East Coast states to reduce GHG emissions from the power sector.
• The RGGI participating states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) have collectively reduced power sector carbon dioxide pollution by over 45 percent since 2005, while experiencing per capita Gross Domestic Product growth and reducing energy costs for businesses.

Governor Wolf ordered and directed PADEP to develop and present to the Pennsylvania Environmental Quality Board (EQB) a proposed rulemaking package to abate, control, or limit carbon dioxide emissions from fossil-fuel-fired electric power generators by July 31, 2020.

The proposed rulemaking shall:

1. Include a robust public outreach effort working with the business community, energy producers, energy suppliers, organized labor, environmental groups, and others to ensure that the development and implementation of this program results in reduced emissions, economic gains, and consumer savings;
2. Establish a carbon dioxide budget consistent in stringency to that established in the RGGI participating states;
3. Provide for the annual or more frequent auction of carbon dioxide emissions allowances through a market-based mechanism; and
4. Be sufficiently consistent with the RGGI Model Rule such that allowances may be traded with holders of allowances from other states.

This Executive Order shall take effect immediately and shall remain in effect until amended or rescinded by the Governor.

What Does This Mean?

Emissions trading programs have gained popularity as an effective tool for controlling air pollution in the last few decades.  It is likely that the Commonwealth of Pennsylvania will soon establish a carbon dioxide budget to cap and reduce carbon dioxide emissions consistent with the RGGI Model Rule, in which allowances are offered through periodic (e.g., quarterly), regional carbon dioxide allowance auctions. These auctions allow states to reinvest the proceeds from carbon dioxide allowance auctions in consumer benefit programs to improve energy efficiency and accelerate the deployment of renewable energy technologies.²  The Department of Environmental protection anticipates providing a draft regulation to the Air Quality Technical Advisory Committee (AQTAC) in Spring of 2020, open the draft regulation for public comment in Fall of 2020, and provide a final rule to AQTAC in Spring of 2021. If you have any questions, please contact us, and we would be happy to help.

¹ By the direction of Governor Tom Wolf. (2019, October 3). Executive Order – 2019-07- Commonwealth Leadership in Addressing Climate Change through Electric Sector Emissions Reductions. Retrieved from https://www.governor.pa.gov/newsroom/executive-order-2019-07-commonwealth-leadership-in-addressing-climate-change-through-electric-sector-emissions-reductions/

² (2019). Elements of RGGI. Retrieved from https://www.rggi.org/program-overview-and-design/elements