Virginia and the Regional Greenhouse Gas Initiative

The Regional Greenhouse Gas initiative is a carbon tax costing Virginia’s citizens and industries hundreds of millions of dollars each year. Over the last two years alone, it has cost taxpayers more than $500 million, and will likely cost more than $300 million this year.

ALEC spoke out about this, submitting regulatory comments to the state which are available here.

Despite its goal of lowering energy consumption, data shows electricity usage increased by about 11% under RGGI. With the federal push to eliminate natural gas and other alternative energy solutions in favor of electrification of home water heaters and stoves, the demand for electricity is continuing to grow.

Electrification is happening beyond homes and businesses. In 2021, the Virginia legislature passed a law tying the state’s decision-making authority on vehicle emissions standards to California’s Air Resource Board (CARB). Operating under the direct orders of California Governor Gavin Newsom, CARB, an unelected body of bureaucrats, voted in August to phase out gas-powered vehicles by 2035. As a result of Virginia’s 2021 bill, the sale of gas-powered vehicles will also be banned, unless the state overturns the law.

Electric vehicles in Virginia are powered by electricity drawn from the grid, and when coupled with increased demand due to home electrification, prices are already rising. Adding a carbon tax, especially one that fails to decrease usage or emissions, while pushing for greater use of the electric grid harms residents, small businesses, and industry as a whole. Virginia’s leaders have not been shy about  positioning the state for an increase in growth in the technology sectors, making RGGI’s continued impact particularly troubling.

There are two common practices used in RGGI states to avoid this tax increase, and both are becoming increasingly common in Virginia. The first is sourcing power from out of state, a trend seen in longtime RGGI states. Residents, businesses, and industry are paying higher transmission fees and avoiding RGGI’s carbon tax by turning to states that do not participate in the scheme.

The second practice is to generate electricity using the supposedly “clean” practice of burning biomass. Biomass, in plain English, is carbon from things that were recently alive – generally trees, although in many cases it also includes municipal solid waste, also known as trash. Since some biomass is renewable in the sense that we can re-grow trees, it is considered a clean source of energy. In practice, however, biomass releases almost 50% more carbon dioxide into the atmosphere than coal and over 300% more than natural gas.

If the goal is to cut emissions, RGGI is implemented in such a way that it makes a glaring exception for one of the highest polluting forms of electrical generation. RGGI does not tax the carbon dioxide released from biomass, further incentivizing this high carbon dioxide source of electricity.

For all of these reasons, Virginia should end its participation in the Regional Greenhouse Gas Initiative. It does not achieve its goal of limiting emissions, actually increasing carbon dioxide emissions by 3.7 million tons, and provides a perverse incentive to use less efficient technology. What it does do is burden families, businesses, and the industries the state is trying to attract, and fills the treasury under the false premise that Virginia is doing something about climate change.

Virginia, and other states, can benefit from the Safeguarding Greenhouse Gas Regulatory Authority Act, which is available here. Under this model policy, a state agency may not adopt or enforce a state or regional program to regulate greenhouse gas emissions for the purposes of addressing changes in atmospheric temperature without specific legislative authorization. For more information on how your state ranks in energy prices, check out ALEC’s Energy Affordability Report – Second Edition at this link.

In Depth: Energy

It is difficult – and perhaps even impossible – to overstate the relationship between readily available access to safe, affordable and reliable energy and individual prosperity and economic wellbeing. This is because energy is an input to virtually everything we produce, consume and enjoy in society. Think for a minute…

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