Youngkin administration outlines plan to leave cap-and-trade system

Governor Glenn Youngkin has renewed efforts to remove Virginia from an interstate compact intended to reduce greenhouse gas emissions. Within an hour of taking office in January, Youngkin issued several executive orders including one seeking departure from the Regional Greenhouse Gas Initiative

However, the Republican governor was unable to leave without the General Assembly’s approval as party control is split across both Houses. Now, however, Youngkin’s appointees now have the edge on the seven-member State Air Pollution Control Board and he sent acting Secretary of Natural and Historic Resources Travis Boyles to outline the new plan to withdraw from the Regional Greenhouse Gas Initiative (RGGI).

“RGGI is a bad deal for Virginia,” Voyles said. “Whether you agree with the framework and principles of a cap-and-trade system, the way RGGI has been implemented in Virginia does not work as an effective means for greenhouse gas reductions,” Voyles said. 

Virginia joined RGGI after action by the General Assembly in 2020 allowed it to do so as part of the Clean Economy Act. At the time, Democrats held both the House of Delegates and the Senate. Power generators of over 25 megawatts must purchase credits if they exceed certain emission thresholds. The state of Virginia has received over $378 million in proceeds, with 45 percent of that amount mandated to go toward flood control and mitigation efforts. 

A screenshot of the proceeds Virginia has received from RGGI auctions. The seventh is scheduled for September 7 (Credit: RGGI)

Voyles said that money comes from ratepayers who should not have to pay the higher costs.  

“We need to remember that Virginians do not need a regressive energy tax through RGGi to fund important programs on resiliency and energy,” Voyles said. “While important, these are not the goal of RGGI that it was meant to achieve.” 

Voyles said RGGI does not work because those funds are not going directly to ratepayers. He said the administration will use the regulatory process to repeal Virginia’s participation in RGGI and will not renew the contract with the organization at the end of 2023. 

“The administration will put forward in the coming weeks a notice of intended regulatory action, a NORA, that will repeal the trading rules and end Virginia’s participation in RGGI,” Voyles said. “While an immediate exit from RGGI would provide cost savings to come consumers, an orderly withdrawal from RGGI at the end of our control period and contract will provide the greater regulatory certainty and help prevent market fluctuation in the pricing.”

One of former Governor Ralph Northam’s appointees to the Air Pollution Control Board said it’s premature to know much of any impact RGGI has had. 

“We have only had one year worth of information which probably hasn’t been fully vetted as of yet and yet you’re saying it’s bad,” said Dr. Lornel Tompkins. “We don’t seem to have enough information to make a decision.”

Tompkins said utility costs are increasing for reasons in addition to RGGI. She asked Voyles why the administration isn’t seeking reform through the General Assembly. Voyles responded that the administration wants to take actions.

“This is before the Air Board and the DEQ and this is something we can address immediately and that’s what we’ve set out the process to do that,” Voyles said. “Before we have any discussions about legislative action we are looking at actual things the administration can do to lessen the cost of energy for everyday Virginians.” 

One question is whether even this route will pass c onstitutional muster. For more information learn more about the discussion in this article in the Virginia Mercury

The next RGGI auction is scheduled for September 7 and the auction list has been amended to reflect that Pennsylvania will not participate. That state had joined RGGI earlier this year, but the two main political parties disagree on whether it should do so going forward. A legal challenge has stopped the Pennsylvania Department of Environmental Protection from selling any of its allowances.

Before you go: The time to write and research of this article is covered by paid subscribers to Charlottesville Community Engagement. In fact, this particular installment comes from the September 1, 2022 edition of the program. To ensure this research can be sustained, please consider becoming a paid subscriber or contributing monthly through Patreon.


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