In a sleight of hand worthy of a card shark, Gov. Josh Shapiro quietly acted to raise home heating and electricity costs for Pennsylvania families.
It’s officially termed the Regional Greenhouse Gas Initiative, or RGGI. It should be called the “Shapiro Energy Tax.”
Little noticed until recently, the governor tucked a revenue projection into a forward-looking statement appended to his annual budget proposal. It anticipates $600 million in new revenues — working people call them taxes — from the sale of “carbon credits” as part of RGGI.
The governor spoke for nearly two hours during his budget address but found no time to mention this scheme — signaling his commitment to forcing Pennsylvania into RGGI. It’s a great deal for other states, if only because Pennsylvania will become less competitive.
Here’s how it works. States basically sell a license to pollute. Energy producers buy a CO2 allowance for every ton of carbon dioxide they emit. Working families would imagine that the energy companies pass this added cost on to them. Working families would be right. RGGI is a tax scheme disguised as enlightened environmental policy that will cost jobs and break household budgets.
Under RGGI, the number of available carbon credits declines year-by-year, driving up their cost until energy producers can no longer afford to operate. Pennsylvania — where natural gas production has greatly reduced greenhouse gas emissions and created thousands of jobs — will suffer the loss of industry, investment and face higher costs.
Additionally, if RGGI succeeds, Pennsylvania would find itself missing billions of dollars from its budget. But RGGI isn’t going to succeed. Working families will push back as higher heating bills, spurred by inflation and government overreach, break them. Two-thirds of Pennsylvania’s electricity comes from producers who will be hamstrung by RGGI. But 100% of its energy insecurity will come from RGGI.
The RGGI faction, with interest in renewable energy, have used the manipulation of language to promote themselves. RGGI is what is commonly called a “cap-and-trade” program, in which government caps the amount of allowable pollution, then lets speculators sell the credits to desperate energy producers nearing their limits.
RGGI’s advocates call it “cap-and-invest.” The only thing purchasers of these credits will be “investing” in is their own financial gain — as thousands of jobs will be lost and industries across the state will suffer.
This is a very real scenario, mostly because Pennsylvania officials haven’t shown an ability to count. The Department of Environmental Protection predicted that the carbon tax credits would cost $3.50 each and not rise before 2030. They currently cost more than $13 each at auction. In other words, Shapiro is encouraging policy that will privilege and encourage a new market for financial speculation on the backs of everyday families in Pennsylvania.
There is no way that kind of spiraling cost will be, or even can be, absorbed by job creators or hard-working families on a budget.
This could be why RGGI advocates are also urging “conservation” at home and then advertising it as a cost savings for consumers, who’ll be forced to turn down the thermostat just to keep their heads above water.
A 2022 projection by RGGI states suggested that less energy used equates to dollars saved. That is akin to telling someone they’ve saved money by not buying food because they can no longer afford three square meals a day.
You can’t wipe out two-thirds of your energy producers and the jobs they create and sustain without raising prices and darkening homes. We all agree the environment deserves protection. But engendering massive economic dislocation to achieve it is neither a commonsense nor realistic way to achieve it.
Shapiro spent almost all of 2022 assuring folks he hadn’t made up his mind about RGGI. What he didn’t acknowledge, judging by the stuff he quietly slipped into his budget without telling anyone, is that someone made up his mind for him – and it wasn’t those of us who pay our energy bills.
David Galluch is chairman of Keystone Forward, a nonprofit advocacy group for transparency, good government and free market solutions based in Harrisburg.
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The post David Galluch: Coming soon — the Shapiro energy tax appeared first on Energy News Beat.
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