Comments in Opposition of RGGI Proposal

TO: Keith J. Salador, Esq., Executive Director, Citizens Advisory Council
FROM: Carl A. Marrara, Vice President of Government Affairs
RE: Comments in Opposition of RGGI Proposal

It is the position of the Pennsylvania Manufacturers’ Association that the Regional Greenhouse Gas Initiative (RGGI) is a flawed proposal and is not sound public policy for the Commonwealth of Pennsylvania. Therefore, on behalf of the 569,000 employees on the 12,383 manufacturing shop floors throughout our commonwealth, we urge the Citizens Advisory Council of the Pennsylvania Department of Environmental Protection to reject Governor Wolf’s Executive Order No. 2019-7.

Let us begin by establishing a commonsense baseline: everyone wants a clean, healthy, and sustainable environment. The issue at hand is whether or not a government program, that will undoubtedly add substantial costs to Pennsylvania’s electricity consumers, is the best mechanism to achieve the cleanest, healthiest, and most sustainable environment possible. You’ll find that the answer to this question is clearly that RGGI does not accomplish this goal, but the program will negatively impact Pennsylvania’s economy in a punishing way.

It important to ensure that environmental regulation is approached on sound scientific evidence to ensure that regulations are reasonable and within technological limits. It is likewise prudent that these regulations achieve real environmental benefits and do not advantage one sector of the economy to the detriment of another. RGGI fails all of these bright-line tests and should thus be rejected by Governor Wolf and the Citizens Advisory Council of the Department of Environmental Protection.

It is imperative that Pennsylvania policymakers not enact laws or regulations that place our commonwealth at a competitive disadvantage to our competitor states. Laws and regulations should not be more stringent than federal regulations or laws unless there is a compelling reason that is unique to our commonwealth. It’s clear that under current market that Pennsylvania is meeting and exceeding its goals.

Governor Wolf’s proposed targeted emissions reductions of 26 percent by the year 2025 is well within striking distance today, some six years away. The private sector has led the way, doing what the private sector does best – inventing, innovating, and forging a better future for all of us. Energy related CO2 emissions have decreased 22 percent from 2005 to 2016 and with more natural gas fired power plants coming online since 2016, that percentage will increase as the data is updated and republished. Governor Wolf’s goals are being met without entering Pennsylvania into a regional accord that will thwart private sector innovation, forcing layoffs of thousands of our commonwealth’s workers, and putting our economy into a tailspin as entire communities will be negatively impacted.

Enacting RGGI will have dire economic consequences, as has been proven in other RGGI states. According to research published by the CATO Institute by David Stevenson, “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 five (5) percent of energy-intensive manufacturing. Power imports from other states increased from eight (8) percent to 17 percent.”

Manufacturers are energy intensive operations. No matter what you are making, raw materials become finished manufactured goods and energy a large part of that process. For many manufacturers, energy costs are the largest cost output month-to-month. Adding on additional costs will drive manufacturers out of Pennsylvania and make it exceedingly difficult to bring new firms in; essentially making RGGI a hard-cap on economic growth in the manufacturing sector. For every dollar invested in manufacturing the multiplier effect on the larger economy is $1.33; the largest multiplier effect of any industry, making manufacturing the engine that drives whole economies throughout our commonwealth.

Once again, all of us desire a clean, healthy, and sustainable environment. As a conservationist and sportsman myself, I care deeply about our environment. Which is why I want this industrial activity to happen here in Pennsylvania than elsewhere in the world. We benefit from the jobs and the economic activity, but we also benefit from the fact that Pennsylvania has some of the strictest regulations when it comes to emissions standards, oil and gas drilling, and mineral extraction. From an environmental standpoint, I would rather that activity happen here, where companies are good stewards of the environment and there is strict oversight, rather than in Russia where environmental regulations are skirted, or China where there are serious human rights violations, worker exploitation, and heavy pollution.

By entering into RGGI, industrial activity will be relocated, and who knows where it will go. Tax policies at the federal level are making it the smart business decision to locate, hire, and expand here in the United States. Let’s not drive that activity back across our borders into neighboring states, or worse, foreign countries. It’s not a stretch to say that by supporting RGGI you’re supporting Russian and/or Middle Eastern global energy leadership and Chinese steel-dumping. Let’s work with our industries to invent, innovate, and forge a clean, healthy, and sustainable environment – not overregulate our many vital industries out of existence. For these reasons we, the Pennsylvania Manufacturers’ Association urge you the Citizens Advisory Council of the Department of Environmental Protection to reject Governor Wolf’s RGGI proposal.

 To print the PDF, click HERE