RGGI Testimony-Chuck Marshall, Advocate for Climate Justice and Supporter of PA IPL

My name is Charles Marshall. I live in Paoli, PA. I was an environmental consultant for 26 years working for a small PA-based consulting firm.  Over the years our company had many contracts with U.S. EPA and OSHA performing regulatory impact analyses for air, water, safety, and hazardous workplace rules. Over the past 10 years I have been active in energy conservation and GHG emission reductions as a board member of PA IPL and as chair of the Ecology Faith in Action Team at Central Baptist Church in Wayne, PA where I obtained a PA DEP Energy Harvest Grant and installed 48 panels on the roof of our church.

Although I didn’t work on the acid precipitation rules as a consultant I followed the rulemaking for and development of the allowances program and market events as utilities reduced their acid emissions in a very successful compliance program.

My first comment pertaining to RGGI is that designing a program for GHG emissions using the acid precipitation program is wise and logical.

I have both a Masters in Environmental Science as well as an MBA (both from Drexel) and I can say that I am an environmentalist and someone interested in achieving environmental goals in a least-cost fashion.  I think that properly designed cap and trade programs can reduce large quantities of GHG in a least-cost manner while effecting a large quantity of GHG emissions. Getting a 30 % reduction by 2030 will be a major achievement. And my reading of the rulemaking for RGGI shows a very carefully designed program that takes into account some of the features of PA’s situation such as combustion of waste coal-fired units, highly impacted communities and individuals, and methods of sequestering CO2.

(skip to summary points at end)Like the acid precipitation program, a program that includes emitting sources over a large geographic area such as RGGI allows least-cost compliance not just within PA but in the larger RGGI area. I think it is good feature in the design of the allowance program of RGGI that “CO2 emissions from this Commonwealth’s power sector are not ”capped” by the CO2 emissions budget, meaning they are not limited to strictly the amount of this Commonwealth’s CO2 allowances

Cap and trade programs allow agencies to get away from the less flexible command and control strategies. By using a market-based trading mechanism it achieves least-cost means that promotes creativity for each source to comply in a way that is best for them.  

I like the feature of the proposed program to invest the proceeds resulting from the auction of CO2 allowances to further reduce CO2 emissions. There are a lot of opportunities in PA to implement solar electricity projects as witnessed in the DEP’s Office of Pollution Prevention goal to increase the % solar generation in PA from 1.0% to 10% by 2030.

I think cap and trade programs with a declining amount of allowances are more greatly accepted by this regulated community than other types of command and control strategies. The pathway for compliance is laid out, the number of compliance methods are multiple and flexible.

The rulemaking is also designed to qualify “three offset categories of landfill methane capture and destruction projects, projects that sequester carbon due to reforestation, improved forest management or avoided conversion, and projects that avoid methane emissions from agricultural manure management operations.”

The reduction of CO2 will also coincidentally reduce SO2 and NOx reductions with their related health benefits. “The public health benefits to this Commonwealth of these avoided SO2 and NOx emissions range between $2.8 billion to $6.3 billion by 2030, averaging between $232 million to $525 million per year

“For communities and employees impacted by this rulemakings and employees, auction proceeds can be used to mitigate those impacts and assist communities and families through the energy transition. This could include repowering of the existing coal-fired power plants to natural gas and investments in worker training or other community-based support programs.” This is a very good and appropriate design feature of this program.

“The modeling estimates that from 2022 to 2030, this proposed rulemaking would lead to an increase in Gross State Product of $1.9 billion and a net increase of 27,752 jobs in this Commonwealth. The Department’s modeling also indicates that investments from this proposed rulemaking would spur an addition of 9.4 gigawatts of renewable energy and result in a load reduction of 29 terawatt hours of electricity from energy efficiency projects.

The EPA also noted in the guide that banking of allowances, which this proposed rulemaking allows, provides an additional incentive to reduce emissions earlier than required. Banking provides flexibility by allowing sources to save unused allowances for use in a later compliance period when the emissions budget is lower and the costs to reduce emissions may be higher.

“residential electric consumer bills will increase by an estimated 1.5% in the short-term. This amounts to an additional $1.46 to $2.05 per month depending on the home heating source. However, the Department’s modeling shows that this minor increase is temporary. As a result of the revenue reinvestments from the auction proceeds, by 2030, energy prices will fall below business–as-usual prices resulting in future consumer electricity cost savings.

To Sum it Up the beneficial; aspects of this rule are:

  1.  Control costs for the power sector are reasonable
  2. As these costs are passed on by the power sector, the economic impact on Pennsylvanians is reasonable
  3. There will be an overall positive cost: benefit relationship for this rule assuming the allowances revenues can be invested in the ways suggested by the proposed rule  
  4. Funds can be used to aid highly impacted communities and individuals 
  5. Compliance is flexible and not command-and-control
  6. Co-control of other air pollutants like SO2 and NOX creates coincidental benefits
  7. Help provided to coal waste-fired units
  8. Banking of emissions to the future is possible under the rule
  9. Positive impact of using revenues to stimulate renewable energy
  10. Real, permanent and verifiable carbon sequestration methods of controlling CO2 emissions are built into the program as credits and positively affect other industrial sectors