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Governor Youngkin Says New Report Shows That Regional Greenhouse Gas Initiative Is Carbon Tax Passed on to Consumers

by | Mar 18, 2022

Glenn Youngkin

Governor Glenn Youngkin is trying to withdraw Virginia from participation in the Regional Greenhouse Gas Initiative (RGGI), and the Virginia Department of Environmental Quality (DEQ) published a Youngkin-ordered report on the program, which requires utilities to bid on carbon dioxide allowances.

“Costs are soaring for Virginia families and as governor, I pledged to address over taxation and Virginia’s high cost of living. That’s why I signed Executive Order Nine to direct DEQ to examine the impact of RGGI and start the process of ending Virginia’s participation. This report reveals that RGGI is in reality a carbon tax passed on to families, individuals and businesses throughout the Commonwealth – it’s a bad deal for Virginians,” Youngkin said in a press release Tuesday.

Virginia is one of 11 states to participate in the program, which holds periodic auctions for the allowances. On March 11, the Regional Greenhouse Gas Initiative, Inc., announced that 21.8 million allowances were sold in the first auction of 2022. 5.5 million were sold in Virginia, earning $74.2 million in proceeds. Virginia was the first state in the South to enter RGGI. According to a 2020 announcement from former Governor Ralph Northam, proceeds from the auctions go to community flood preparedness, coastal resilience, and energy efficiency programs for low-income Virginians.

Youngkin’s release summarized key points from the report, including, “Because of the captive nature of their ratepayers, the ability for power-generators to fully pass on costs to consumers, and the fact that the Code of Virginia dedicates RGGI proceeds to grants programs, participation in RGGI is in effect a direct carbon tax on all households and businesses.”

The release adds, “In addition, consumers are unable to avoid the pass through of these costs because they do not have the opportunity to switch electric providers – Dominion and other providers are monopolies in most regions of Virginia.”

Youngkin has touted an all-of-the-above energy policy and emphasized a desire to cut energy costs for Virginians. Before being elected, he said he would withdraw Virginia from RGGI by executive action, although it became clear that he couldn’t do that without a battle with the Senate over who has the legal authority to pull Virginia from the program.
Once in office, Youngkin issued an executive order ordering a re-evaluation of the costs and benefits of the program and notified the RGGI authority of Youngkin’s intent to withdraw. The new DEQ report comes from that order. Youngkin’s also taken other steps to ease regulations, but legislation to pull Virginia from RGGI failed during the recent General Assembly session.
There’s still a glimmer of hope for RGGI withdrawal. At the end of February, House Majority Leader Terry Kilgore (R-Scott) said that Republicans incorporated the withdrawal into the House budget proposal. Negotiations between House Republicans and Senate Democrats over a budget compromise are still ongoing; Youngkin is expected to call a special session to pass the budget bill once a compromise is reached.
Senate Democrats don’t seem receptive to withdrawal.
“Yesterday, we learn Andrew Wheeler is staying on at $185K/yr. and today the Governor releases a report attacking RGGI and laying out a framework for withdrawing from RGGI Straight outta the Trump EPA Playbook ,” Senator Scott Surovell (D-Fairfax) tweeted on Tuesday.
“The Governor has continued his assault on our environment and doubled down on his efforts to remove Virginia from the Regional Greenhouse Gas Initiative. Leaving RGGI would set us back decades and cut $180 million for clean energy and flood preparedness,” the Democratic Party of Virginia tweeted.
Youngkin said in his release, “Hardworking Virginians are having to do more with less as inflation steals a historic amount from their paychecks and the failed Biden administration energy policies are costing Virginians more at the pump and in their homes. We’re working every day to cut energy taxes and reduce costs – like the RGGI carbon tax – and make Virginia the best place to live, work and do business.”
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Eric Burk is a reporter at The Virginia Star and The Star News Network.  Email tips to [email protected].
Photo “Glenn Youngkin” by Glenn Youngkin. 

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