By Erin Cosgrove
Earlier this month, hundreds of Pennsylvania businesses, nonprofits, and residents spoke at hearings hosted by the Department of Environmental Protection. The purpose of this collaborative process is to shape the rules of Pennsylvania’s entry into the Regional Greenhouse Gas Initiative, or RGGI. Joining RGGI gives Pennsylvania a chance to create jobs and grow its economy by investing proceeds from carbon allowance auctions. Per year, RGGI is anticipated to create 27,000 jobs and pour $300 million into Pennsylvania’s economy.
This opportunity arrives not a moment too soon. Pennsylvania’s pandemic recession numbers are bleak: the state government faces a nearly $5 billion shortfall over two years, and 453,000 payroll jobs will be lost this year in the Commonwealth. Leadership should do everything in its power to swiftly and sustainably rebuild the economy.
RGGI has earned a track record of economic success, lowering energy costs and boosting the economies of its ten participating states, where GDP has outpaced growth in the rest of the country by 31%. These states have invested over half their RGGI proceeds into energy efficiency, generating over $4 billion in economic benefits – in the form of new jobs, customer utility bill savings, and public-private investment.
RGGI has enormous potential in Pennsylvania, which is a major energy powerhouse. Under RGGI rules, qualifying power plants must purchase allowances at auction in order to emit carbon. The proceeds generated at auction are then poured into the state economy. This means that the market determines the price on carbon and rewards the most efficient means to achieve reductions, which in turn drives investment and spurs innovation in cleaner technologies.
With the right investments, an immediate benefit of RGGI will go to Pennsylvania’s families, who could get a much-needed break on their electric bills. Electricity wholesale prices dropped by 5.7 percent in RGGI states, even as the rest of the country saw increases of 8.6 percent. Investments in RGGI states have helped save consumers more than a billion dollars on their energy bills.
RGGI also offers Pennsylvania the chance to maneuver one of its most reliable job-creating industries into a position of rapid and sustainable growth: energy efficiency. While the pandemic and related lockdowns caused enormous job losses, energy efficiency is the largest US energy sector, boasting a growth rate 1.7 times faster than the national workforce from 2016-2019.
Joining RGGI will propel Pennsylvania further along its transition to a clean energy economy, requiring a larger workforce to ensure RGGI programs are implemented and available statewide. Energy efficiency workers will be in increasing demand to build, install, monitor, repair, and improve equipment. These jobs are by definition local to their communities, and offer a higher-than-average salary.
Energy efficiency jobs can also provide a reliable career path for workers transitioning away from other energy sectors. Auction proceeds can provide workforce transition funding to help workers join the energy efficiency and clean energy workforce. As coal generation naturally declines, Pennsylvania’s leadership should do everything possible to help its traditional energy workers find employment in forward-looking growth sectors. RGGI will provide the push, framework, and funds to transition the workforce to one of clean generation.
The effects of energy efficiency investment from RGGI will ripple out across communities: families with lower utility bills can spend more on local goods and services, and businesses that spend less on energy can spend more on payroll or capital investment. In this way, energy efficiency investments are a win-win-win that will ensure that RGGI delivers not only less pollution, but more jobs, more savings, and a stronger economy for Pennsylvania.
Erin Cosgrove is the Director of Regulatory Affairs for the Keystone Energy Efficiency Alliance (KEEA), an energy efficiency trade association. KEEA’s membership, comprised of seventy-five companies, ranges from small local firms to large multinational corporations and operates across the value chain of energy efficiency. KEEA engages its membership and key policymakers in support of an industry that accounted for more than 71,000 Pennsylvania jobs in 2019. The policy KEEA promotes at the state and local level expands the market for energy efficiency.