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Practice Areas
Pennsylvania’s Climate Change Initiatives Entering 2024
Regional Greenhouse Gas Initiative
On November 1, 2023, the Pennsylvania Commonwealth Court, ruling on cross-applications for summary relief, issued a 4-1 decision striking down Pennsylvania’s rulemaking titled “CO2 Budget Trading Program,” which would have allowed Pennsylvania to join the Regional Greenhouse Gas Initiative (RGGI). The decision follows on the Commonwealth Court’s prior injunction of the RGGI rulemaking in 2022.
RGGI is an intergovernmental organization consisting of ten member-states (CT, DE, ME, MD, MA, NH, NJ, NY, RI, VT) that has established a market-based cap-and-trade program for CO2 emissions from fossil fuel-fired power plants that have 25 megawatts or more of nameplate capacity and send at least 10 percent of their gross generation to the grid. The rulemaking would aim to reduce CO2 emissions from RGGI sources by 25.5 percent by 2030. Based on an analysis conducted by a consultant retained by the Pennsylvania Department of Environmental Protection (PADEP), most emission reductions are expected to come from reductions in coal use, while a smaller percentage would come from natural gas. Pennsylvania itself would expect to see a total statewide emissions reduction of 183 million tons of CO2 by 2030, but approximately 96 million of that 183 million tons of CO2 emissions would be shifted (i.e., leaked) to other states within PJM territory. PJM is a regional transmission organization that coordinates the movement of electricity in Pennsylvania, all or parts of 12 other states, and the District of Columbia. Specific to natural gas, nearly all the anticipated reductions in natural gas emissions and generation in Pennsylvania are expected to be leaked to other PJM states.
PADEP expects the auctions of RGGI credits to yield hundreds of millions of dollars in revenues through 2030. The Air Pollution Control Act requires that all auction proceeds be directed to the Clean Air Fund “for the use in the elimination of air pollution,” and PADEP would intend to develop a reinvestment plan for the auction revenues including reinvestment in energy efficiency, renewable energy, and greenhouse gas abatement. PADEP has taken the position that the allowances amount to fees that are authorized under the Air Pollution Control Act. The Commonwealth Court in its recent decision, however, disagreed, finding that the RGGI auction proceeds would be “grossly disproportionate” to the costs of overseeing participation in the RGGI program or PADEP’s annual regulatory needs and also related to activities beyond PADEP’s regulatory authority.
The Commonwealth has appealed to the Pennsylvania Supreme Court, and a final decision on the RGGI rulemaking could come in 2024. The Governor’s office issued a statement explaining that its decision to appeal was due to implications of important executive authority. The Governor’s office also explained that the Governor is willing to “sign legislation replacing RGGI with a Pennsylvania-based or PJM-wide cap-and-invest program.”
Act 70 of 2008
The Pennsylvania Climate Change Act, Act 70 of 2008, required PADEP to prepare a Climate Change Impacts Assessment and a Climate Change Action Plan and requires PADEP to update these documents once every three years. The last updates were issued in May 2021 and September 2021. PADEP is expected to issue the next updates in 2024. The Climate Change Impacts Assessment summarizes scientific projections of temperature and precipitation changes, discusses the potential impacts of climate change, and evaluates economic opportunities created by the potential need for alternative sources of energy and technologies. The Climate Change Action Plan lays out a course for reaching Pennsylvania’s greenhouse gas reduction goals, which are currently a 26 percent reduction by 2025 and an 80 percent reduction by 2050, from 2005 levels.
