Governor-elect Glenn Youngkin announced his intention to make energy more affordable for Virginians by withdrawing the Commonwealth of Virginia from the controversial 11-state Regional Greenhouse Gas Initiative (RGGI).
He recently told the Hampton Roads Chambers of Commerce he’ll remove Virginia from the initiative by executive action once he enters office in January.
“RGGI describes itself as a regional market for carbon, but it is really a carbon tax that is fully passed on to ratepayers. It’s a bad deal for Virginians. It’s a bad deal for Virginia businesses,” Youngkin said. “I promised to lower the cost of living in Virginia and this is just the beginning.”
On the merits, Mr. Youngkin is correct. A timely withdrawal from this flawed carbon market, which isn’t inherently market-based, will benefit all Virginians given its vast shortcomings.
The most notable problem with RGGI is its overall negligible impact on carbon emissions: In 2019, the Congressional Research Service observed that nine partner states “account for approximately 7% of U.S. CO2 emissions and 16% of U.S. gross domestic product” and called carbon emissions reductions “arguably negligible” at best.
When those numbers are broken down, it only accounts for a measly 1.4 percent in total U.S. emissions reductions. And even this reduction is largely attributable to the transition from coal to natural gas in the state.
Not only will RGGI membership fail to reduce carbon emissions in a meaningful way, it will raise costs for Virginians. The CATO Institute assessed electricity demand between non-RGGI and RGGI-participating states and concluded the former added more wind and solar generation than the RGGI states while having lower electricity price increases during the same time. When the market actually sets prices, demand for renewable energy naturally happens, and consumers pay lower prices for clean energy. Ultimately, the CATO Institute found “no added reductions in CO₂ emissions, or associated health benefits, from the RGGI program.”
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