(The Center Square) – Virginia’s budget agreement, which passed both houses of the General Assembly, maintains funding for the carbon trading pact called the Regional Greenhouse Gas Initiative, according to the office of the former House Minority Leader Eileen Filler-Corn, D-Fairfax.
The initiative, also known as RGGI, aims to reduce the Commonwealth’s carbon footprint by capping the amount of emissions that can be emitted each year and gradually lowering that cap over the next few years. It also sets rules on how much carbon entities can emit and requires entities to buy carbon credits if they plan to exceed that limit. The number of credits will also gradually decrease.
If an entity exceeds its carbon emissions cap, it faces fines. Approximately $228 million in carbon credits were purchased in the first year of the program, most of which were purchased by state electric utilities. These costs are often passed on to ratepayers, which the State Corporations Commission says will cost about $5.9 billion between 2019 and 2043. The commission estimates that this program will eventually increase tariff costs to between $84 and $144 per year. .
Former Governor Ralph Northam entered into the pact after receiving authorization from the General Assembly, which was fully controlled by Democrats at the time. Gov. Glenn Youngkin has pledged to pull Virginia out of the pact, but his office has not said whether he will make any changes to the budget.
“The Governor is reviewing the budget and as energy costs rise, Governor Youngkin has pledged to reduce the cost of living and withdraw from the RGGI, which is a hidden tax that drives up the costs of energy for Virginia consumers,” Youngkin spokesman Macaulay Porter told the Center. Square.
Republican leaders have also opposed participation in the RGGI, but neither the House nor Senate Republicans have provided comment to The Center Square about its inclusion in the budget. A spokesperson for Senate Republicans told The Center Square that the Senate did not include Republicans in the final budget negotiations.
The free market Thomas Jefferson Institute has spoken out against Virginia’s participation in RGGI. However, senior national and local tax policy researcher Stephen Haner and the institute told The Center Square that if the state is involved, its funding should be made public.
“As long as he’s left, he should be on budget and out in the open,” Haner said. “There should be no taxes or hidden expenses. When the source of income disappears, hopefully soon, the related expenses will also disappear. Other dollars can cover these if the Assembly wishes.
The governor has said he can take executive action to end Virginia’s involvement with RGGI, but he will likely face a legal challenge from Democrats if he does. Democratic lawmakers claimed the governor could not leave the pact without legislative approval.