PA to Create Own Carbon Cap & Trade, Increase Clean Energy Gov. Shapiro Unveils Clean Energy Strategy for PA

On March 12, Gov. Josh Shapiro revealed his energy strategy, a two-pronged approach designed to reduce carbon emissions and increase the use of clean energy in Pennsylvania. In a union hall in Scranton, the Electric City, Shapiro stood alongside members of a workgroup he had assembled to analyze the possibility of joining the Regional Greenhouse Gas Initiative (RGGI), a carbon cap and trade compact that has caused division in the general assembly and faced opposition from fossil fuel powerplant operators.

Shapiro's plan, which he plans to introduce as legislation, involves creating a Pennsylvania-specific carbon pollution cap and trade system for the electric power industry. The proceeds from this program would go towards rebates for utility ratepayers and funding for clean energy projects. Unlike RGGI, which covers 12 states and requires powerplants to purchase pollution allowances, the Pennsylvania Climate Emissions Reduction Act (PACER) would only apply to the Keystone State and its large power producers.

During his speech, Shapiro emphasized that Pennsylvania will not be influenced by outside forces and that this initiative will be managed solely by the state. "We will set our own cap, we will set our own price. We won't have any other state determining what is right for us in Pennsylvania," he declared.

The second part of the strategy is an increase in the state's Alternative Energy Portfolio Standards, which currently mandate that 18% of electricity supplied to consumers must be from renewable and alternative sources. This standard, implemented in 2004, was once considered innovative but has since been surpassed by other states. Shapiro's proposal aims to raise the requirement to 50% by 2035, with 35% coming from solar, wind, and new nuclear energy, 10% from sources like hydropower and natural gas with carbon capture, and 5% from other forms of gas and traditional fuels.

According to the governor's office, the combined plan would save utility ratepayers $252 million in the first five years and create over 14,500 jobs. Environmental, consumer, and labor groups praised the increase in alternative energy as a significant and overdue step, but the Pennsylvania cap and trade proposal received less support.

Shapiro, who had previously expressed doubt about RGGI during his campaign, explained that he was concerned about its impact on energy jobs and prices in the state. In April 2023, he formed a working group with representatives from various industries, including labor, power, oil and gas, coal, renewable energy, and consumer advocates, to explore the best course of action. In September, the group released a report stating that, while they agreed on the need to reduce carbon emissions from the power sector, they could not reach a consensus on RGGI.

Meanwhile, multiple lawsuits against Pennsylvania's participation in RGGI were making their way through the courts. The plaintiffs argued that only the general assembly, not the governor, had the authority to approve joining the regional compact. In November, the Pennsylvania Commonwealth Court ruled in their favor. To the surprise of many, Shapiro announced that his administration would appeal the decision to protect the power of the executive branch.

On Wednesday, Shapiro promised to pull Pennsylvania out of RGGI as soon as he signs the bills to enact his new energy plan. During the announcement, speakers emphasized the importance of working together and compromising, as demonstrated by the RGGI workgroup sessions. "We have a starting point," said Rob Bair, president of the Pennsylvania Building Trades. While he may not agree with all aspects of the plan, he believes in taking action rather than doing nothing.

Jackson Morris, director of state power sector policy, climate, and energy at the Natural Resources Defense Council, echoed the sentiment. He mentioned the federal incentives from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act as potential funding sources for Pennsylvania's plan. However, Morris added that his organization believes participating in RGGI, along with an increased alternative energy standard, is the most effective way to achieve the governor's goals. "But we're also open and eager to explore alternative approaches," he said.

The Pennsylvania Coal Alliance, on the other hand, had a negative response to the plan. They stated that it would put Pennsylvania businesses at a disadvantage and lead to the closure of coal-fired plants in the state. The group also pointed out that a state-specific program was not a recommendation of the workgroup, which primarily focused on comparing RGGI to a hypothetical carbon market for the 13 states in PJM Interconnection, the electric transmission grid that serves Pennsylvania and its neighboring states.

"If this plan is implemented," the group argued, "Ohio and West Virginia will be the winners to Pennsylvania's loser." Despite the coal alliance's objections, Shapiro believes that the long, collaborative process of the workgroup has led to a solid starting point for Pennsylvania's energy future.

Ann Castro
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Ann Castro carries a total of 7 years experience in the healthcare domain. She owns a Master’s of Medicine Degree. She bagged numerous awards by contributing in the medical field with her ground-breaking notions. Ann has developed her own style of working and known for accuracy in her work. She loves trekking. She visits new places whenever she gets free time.