Think Tank Report Discusses RGGI’s Implications

The Ohio River Valley Institute published a report exploring the Regional Greenhouse Gas Initiative’s impact and opportunities related to Pennsylvania coal.

Pennsylvania’s Environmental Quality Board is an independent review board tasked with adoption of all Department of Environmental Protection regulations. On Tuesday the 25-member board voted 15-4 to approve the state’s commitment to the Regional Greenhouse Gas Initiative, a cap-and-trade program targeting carbon emissions with eleven signatory states. The proposal still faces several hurdles before the state can join the initiative.

The decision to join RGGI has been controversial across party lines, with arguments weighing the environmental and potential economic benefits of membership with its impact on the Commonwealth’s fossil fuel industry. As RGGI sets a cap on carbon emissions from power plants, fuels with higher emissions profiles, like coal, are poised to take a major hit.

Researchers with the Ohio River Valley Institute acknowledge the potential impacts on coal, but also recognize the downturn in use of coal in the last decade, arguing that RGGI may be a saving grace to the communities and workforce of the declining industry. Gov. Tom Wolf’s office has stated that joining RGGI will generate upward of $300 million in revenue for the state in the first year alone. This money will be dispersed into various accounts, including a new Energy Communities Trust Fund, which is designated for “investments toward coal community economic development and assistance strategies”.

Using case studies of three other states that have gone through similar experiences, the report ultimately argues that RGGI offers an opportunity for economically declining coal communities to “ease the transition for coal plant workers and local communities,” rather than allowing “market forces to determine when and if the last … coal plants will close with little or no help.”

The help mentioned is primarily through investment of RGGI revenue. The report discusses the various investments that have worked in other states, such as replenishing lost “PILOT” (Payment in Lieu of Taxes) revenues; funding for retrofits of former coal plants; seed funding for new businesses in coal communities; job training for displaced workers; and long-term investments like community investment funds and strategic planning. Additional to these benefits, the report also notes the grander environmental and public health benefits that the community would realize from the reduced emissions in their communities.

More specifically to Pennsylvania, the Wolf Administration has previously listed initiatives to be funded by RGGI revenue if the state were to join. Among those are the previously mentioned Energy Communities Trust Fund to support communities negatively impacted by RGGI and funds to plug orphan or abandoned wells in the state, as well as funding for research and development into carbon capture and storage technologies.

State and local leaders need to develop initiatives to help struggling coal communities, whether or not Pennsylvania becomes the newest member of RGGI, as it is likely that coal use in the U.S. will continue to rise with the increase in the use of natural gas-fired power plants and the constant advancement in renewables that makes them for viable for use at the utility scale.