Sticking a fork in RGGI

Sticking a fork in RGGI

It’s done. At least that’s what the fork being stuck in the Regional Greenhouse Gas Initiative (RGGI) is indicating. At least in Pennsylvania.

But will that, and Virginia’s likely exit from this perverse and onerous spate of government energy market manipulation, set in motion a domino effect and kill this pig in a poke?

Reasonable people and sound markets can only hope.

As Bloomberg Government reports it:

“If Pennsylvania courts don’t kill the state’s participation in [this] regional cap-and-trade program, the November gubernatorial election could do it in.”

Additionally:

“Virginia Gov. Glenn Youngkin is pushing to withdraw his state from the pact by the end of 2023, without any legislative action.”

So, what is RGGI and who’s involved? Here’s a reminder from the Bloomberg scribe:

“RGGI’s member states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia.

“The states set an enforceable regional limit on the amount of carbon pollution that power plants may emit, and they collect millions of dollars from quarterly auctions in which power producers pay for carbon allowances they must hold for each ton of carbon emissions.”

The idea, supposedly, is to reduce such emissions and use the collected millions on “green” energy.

But in Pennsylvania, this latest effort by a government to control (more would say destroy) the energy marketplace, is stalled in the courts.

Additionally, the Republican candidate for governor says he’d kill RGGI. But even the Democrat candidate appears to have little love for the economy-killing nonsense.

What kind of nonsense? According to one analysis, a multimillion-dollar (and illegally imposed) carbon tax that could raise electricity rates in the commonwealth by more than 277 percent.

And for what? Negligible effect on “climate change.”

Among the findings from a 2018 Cato Institute analysis of RGGI-member states:

“There were no added emissions reductions or associated health benefits from the RGGI program.

“Spending of RGGI revenue on energy efficiency, wind, solar power, and low-income fuel assistance had minimal impact.

“RGGI allowance costs added to already high regional electric bills.

“The combined pricing impact resulted in a 12 percent drop in goods production and a 34 percent drop in the production of energy-intensive goods. Comparison states increased goods production by 20 percent and lost only 5 percent of energy-intensive manufacturing. Power imports from other states increased from 8 percent to 17 percent.

“The regional program shifted jobs to other states. A national carbon tax would shift jobs to other countries.”

Talk about a damning bill of particulars.

As this scrivener noted in April:

RGGI is nothing more than “an ill-conceived ecocratic exercise in command economics in the name of installing a social re-engineering program.”

Or as Allegheny Institute researchers Elizabeth Miller and Frank Gamrat noted (in Policy Brief Vol. 19, No. 37):

“RGGI maintains that its cap-and-trade program is market-based. But the mechanisms it uses—such as setting a minimum price called the ‘reserve price’ and other market interventions like ‘cost containment reserve’ and ‘emissions containment reserve’ —are not characteristic of free-market mechanisms.

Continued Miller, a think tank research associate, and Gamrat, the institute’s executive director:

“The increased energy prices for taxpayers, loss of jobs due to mounting energy costs and second-order effects resulting from higher electricity costs are strong arguments against joining RGGI.

“Joining RGGI would be an ill-advised decision that would undermine much of the economic and environmental success the state has enjoyed in the last decade thanks to natural gas production in the electricity market.”

None of that assessment has changed. But what thankfully appears to be changing is the blind bureaucratic devotion to government-mandated economic suicide.

As the 2018 Cato Institute study also proffered:

“A better policy to reduce CO2 emissions is to encourage innovation rather than rely on taxes and regulation. The United States has already reduced emissions 12 percent from 2005 to 2015, more than any other developed country with a large economy, mainly through innovations in natural gas drilling techniques.”

Where there’s a will, there’s a way, goes the old saw. And, clearly, RGGI is not “the way.” It’s past time to close the door on the Regional Greenhouse Gas Initiative.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).