Full Title: The Prospects for Pennsylvania as a RGGI Member
Author(s): Dallas Burtraw, Angela Pachon, and Maya Domeshek
Publisher(s): Resources for the Future and Kleinman Center for Energy Policy
Publication Date: May 9, 2023
Full Text: Download Resource
Pennsylvania’s participation in the Regional Greenhouse Gas Initiative (RGGI) is expected to have the following effects.
- 1. Joining RGGI lowers emissions in Pennsylvania and nationally.
- 2. Emissions reductions occur at low marginal cost.
- 3. Joining RGGI has only a small effect (positive or negative) on the price of electricity in Pennsylvania. This effect is especially small compared with anticipated changes from the Inflation Reduction Act of 2022.
- 4. Joining RGGI decreases use of coal and increases renewables.
- 5. Joining RGGI decreases Pennsylvania’s electricity exports, but the state remains a major exporter.
- 6. Pennsylvania gains revenue from the auction of allowances in RGGI, much of it from allowances sold to out-of-state generators.
- 7. Joining RGGI decreases emissions of sulfur dioxide and nitrogen oxides in Pennsylvania, delivering important air quality benefits.
- 8. Stringent federal environmental regulations and unfavorable market conditions are accelerating the closure of coal power stations, even without RGGI.
- 9. Because 76 percent of gas produced in Pennsylvania is exported to supply American and international markets, RGGI may have a limited effect on the state’s upstream gas industry. The main drivers of its gas demand will continue to be the demand for natural gas plant liquids, the speed of electrification in the United States, and the global demand for liquefied natural gas whether Pennsylvania joins RGGI or not.
- 10. Job losses in fossil fuel generation could be immaterial for the Pennsylvania economy, since direct jobs in this sector represent only 0.08 percent of total state jobs. However, these job losses will affect communities near the 14 coal power stations that remain in Pennsylvania.
- 11. The jobs created in renewable energy and supported at existing nuclear plants, boosted by the Inflation Reduction Act, have the potential to compensate for job losses in the coal and gas sectors.
- 12. Joining RGGI would generate revenues (from auction proceeds) that could be used in job-generating investments in the communities most affected by the plant closures.
- 13. In the absence of RGGI, it is likely that coal plants will continue to close, but Pennsylvania won’t receive funds to address the employment effects.