Pa. environmental regulatory review board OKs study of cap and trade

A state regulatory review board asked the Department of Environmental Protection to review a proposal from environmental groups to set up a cap and trade system in Pennsylvania.

The Environmental Quality Board, which enacts state environmental regulations, approved studying the proposal further by a 14-5 vote Tuesday. 

Filed late last year, the petition came from the 192 individuals and groups, spearheaded by the Clean Air Council, a Philadelphia-based environmental advocacy group.

“This will put Pennsylvania ahead of the curb in the new green economy,” Robert McKinstrey, a state environmental law expert representing the petitioners, told the board.

The plan calls for every state carbon emitter to pay the state in credits for every ton of carbon they release per year. These credits will either be given or auctioned by the state to companies releasing carbon.

The cap would be reduced by 3 percent of 2016’s total state carbon emissions, and would put Pennsylvania on track for carbon neutrality by 2052. That would also bring Pennsylvania in line with the Paris Agreement while trying to forestall the worst impacts of climate change.

Companies that need more credits would be able to purchase them from other companies. The plan as proposed would not impact plastics manufacturing and also lets the Environmental Protection department distribute free carbon credits to companies that can prove they could move business to states without carbon limits.

By 2020, the petition predicts an 8-cent increase in the price of a gallon of gasoline, and a 5.3-cent uptick in the price of a thousand cubic feet of natural gas. It predicted at most a 5 percent variation in typical seasonal changes in gasoline prices going forward.

McKinstrey said that the plan would also place the onus on the whole economy and not just electricity generation to reduce carbon emissions.

Trade groups representing the business community and fossil fuel industry expressed concern over the proposal in testimony signed by 16 separate organizations, including the Chamber of Business and Industry, the Marcellus Shale Coalition, the Pennsylvania Manufacturers’ Association, and energy consumer advocates.

The letter encouraged the board’s members “to take no action” until they had “fully contemplated the policy implications this petition would have on Pennsylvania’s economy as a whole on economic and job growth in Pennsylvania.”

After approval from the board, the petition is studied by the DEP. The department then issues back a report to the board, who can approve the proposal to continue through the state’s long and winding regulatory review process — including stops before the General Assembly and an independent review board.

State business leaders also questioned if the board even had the authority to implement a regulation on carbon — arguments echoed by Rep. Daryl Metcalfe, R-Butler, who serves on the board as chairman of the House Environmental Resources and Energy Committee.

The study "may come back and say, 'well jezz there are all these things going on, we don’t think this particular rule making is appropriate,'" McDonnell says to try and assuage concerns.

— Stephen Caruso (@StephenJ_Caruso) April 16, 2019

Metcalfe, a new member of the EQB as first year chairmen of the House Environmental Resources and Energy Committee, says the General Assembly should look into changing the rules of the board because he's frustrated that they might approve a study of something unconstitutional.

— Stephen Caruso (@StephenJ_Caruso) April 16, 2019

And now Democratic ranking member of ERE, Greg Vitali, suggests that members should vote yes, and suggests that Metcalfe wastes state resources by bringing in climate change contrarians to testify. Metcalfe got defensive about that. "Normally we do this in committee."

— Stephen Caruso (@StephenJ_Caruso) April 16, 2019

A group of young people in 2012 had presented a regulation to the board asking for a 6 percent reduction in carbon emissions by 2050, saying potential future damage from climate change gave them standing.

The environmental review board rejected the proposal without a study as not meeting guidelines for review, but did not comment on reducing carbon itself.

The jilted petitioners sued, and Commonwealth Court agreed with the DEP that it did not have a mandate to review or implement the carbon reductions — but did allow the young people’s standing to demand action to ward of future harm.

McKinstrey and environmental advocates this time argued that given existing state air pollution laws, and the state’s expansive environmental rights clause of the Constitution, the Wolf administration could implement the policy without legislative approval if it wants to. 

And “if the Republicans in the General Assembly don’t like it,” McKinstrey asserted, “they can try and repeal” the state’s nearly six-decade old law regulating air quality and pollution.