In a recent decision by Pennsylvania’s Commonwealth Court, former Governor Tom Wolf, a Democrat, was found to have unlawfully joined an interstate carbon emissions payment program known as the Regional Greenhouse Gas Initiative (RGGI) without obtaining the required legislative approval. This ruling has significant implications for Pennsylvania’s energy and environmental policies.
The court’s opinion, authored by Judge Michael Wojcik, emphasized that the state’s participation in RGGI constituted an illegal tax. Under RGGI, participating states establish regional caps on carbon pollution from fossil fuel power plants, and these plants must purchase allowances for each ton of carbon dioxide they emit beyond the set limit. The Pennsylvania Department of Environmental Protection (DEP) argued that the cost of these allowances was merely a fee. However, the court ruled that it should be considered a tax and, therefore, necessitated legislative approval.
In a noteworthy dissent, Judge Ellen Ceisler raised doubts about whether RGGI membership could be unequivocally categorized as a tax or a fee. She pointed out that the nature of the emissions allowance auction process was ambiguous in terms of imposing fees. Nonetheless, the court’s majority firmly determined that the revenue raised by RGGI should be considered a tax.
Governor Wolf, who left office in January, had unilaterally entered Pennsylvania into RGGI through an executive order in 2019. Furthermore, he vetoed a bill in 2020 that aimed to require legislative approval for such participation. Various legal challenges, including the lawsuit that led to this recent decision, had prevented the state from fully participating in RGGI.
It is now up to Governor Josh Shapiro’s administration, also a Democrat, to decide whether to appeal the court’s ruling to the state Supreme Court. The administration has 30 days to make that decision. According to a spokesperson for Shapiro’s office, the focus remains on addressing climate change, reducing emissions, protecting public health, creating jobs, and safeguarding consumers. They view the court’s decision as a narrow determination of whether RGGI represents a tax or a fee and intend to continue on with their agenda.
Advocates for RGGI argue that the initiative has substantial benefits for Pennsylvania, including improving air quality, addressing climate change, and stimulating economic growth. They hope that Governor Shapiro will appeal the court’s decision and present the case for Pennsylvania’s participation in RGGI before the state Supreme Court.
RGGI currently includes 11 other states, and discussions about joining are ongoing in North Carolina. It’s important to note that Virginia Governor Glenn Youngkin, a Republican, has consistently sought to exit RGGI through various means, including legislative efforts and the state air quality control board. The state General Assembly voted to enter RGGI under the previous Democrat governor in 2021. Therefore, this legal battle in Pennsylvania is just one chapter in the ongoing debate over the environmental and economic implications of carbon emissions trading alliances across the United States.
