Last month, Pennsylvania Gov. Josh Shapiro withdrew from the Regional Greenhouse Gas Initiative, or RGGI (pronounced “Reggie”), a cap-and-trade program that sets a regional cap on carbon emissions from power plants located in the Northeast.
Here's how RGGI works: Each year, credits that allow power plants to emit a certain amount of carbon dioxide, up to a cap, are auctioned off. Proceeds from these auctions go to RGGI member states, which can reinvest them in clean energy and consumer affordability programs. Crucially, the emissions cap is gradually reduced over time, theoretically ensuring that overall emissions continue their downward trend.
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Pennsylvania is a giant within the program because it has higher energy sector emissions than all other RGGI states—Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Delaware and the District of Columbia—combined, so Shapiro's departure sent a shock through the system. The Democrat withdrew from the program as part of a compromise to persuade Republicans in the Legislature to pass a state budget that has been delayed since June, forcing schools and public transit to use rainy day funds or take on debt to support services.
In signing the withdrawal bill, Shapiro said state Republicans were using RGGI “as an excuse to stall substantive conversations about energy.” (Although Pennsylvania joined the regional pact in 2022, the move was immediately tied to litigation that was ongoing at the time of Shapiro's release, meaning the state had not yet participated in the auctions.)
“Today that excuse is gone,” Shapiro added. “It’s time to look forward—and I’m going to aggressively advance policies that will create more jobs in the energy sector, bring more clean energy to the grid, and lower the cost of energy for Pennsylvanians.”
But some other Democrats and environmentalists argue the governor has essentially given away the store. “I would call it Faustian, but Faustus got a lot more out of his deal with the devil,” Nikil Saval, a Democratic state senator, told Spotlight PA. Jackson Morris, senior director of public policy for the Natural Resources Defense Council, said Shapiro has lost his chance to claim a significant environmental victory in a potential presidential race he according to rumors consider.
Democrats “essentially lost,” Morris said. “The political calculus of all this is confusing.”
Pennsylvania first joined RGGI in 2019 at the initiative of then-Governor Tom Wolf, but the program immediately faced opposition from Republicans. The 2022 court ruling prevented the state from formally joining the RGGI that year and then the Commonwealth Court. rules Wolf's executive actions will be ruled unconstitutional in 2023. The decision is currently being reviewed by the state Supreme Court, where Democrats maintained their majority in last month's election. But Shapiro's move makes the process moot.
“To add insult to injury,” Morris said, “we were going to get an answer from the court. And now we'll never get that because they gave up.”
“It's not just that we missed the ball on the 1-yard line, but then [we] picked it up and sent it to the other end zone,” said Patrick McDonnell, president and CEO of Pennsylvania environmental group PennFuture (the governor’s office declined to speak formally with Grist).
To date, RGGI has provided approximately $8.6 billion to member states. Virginia, fresh off a victory for Democratic Gov.-elect Abigail Spanberger, is now poised to rejoin the program after being forced out by current Republican Gov. Glenn Youngkin. When did Yankin leave? found To be illegal in court, Spanberger advocated a return to the treaty.
Some are more cautious in their criticism of Shapiro. “This is a decision [on RGGI] It doesn’t seem conclusive to me,” said Dallas Bertrow, a senior fellow at the research nonprofit Resources for the Future.
In early 2025, Shapiro unveiled his “Lightning Plan,” a jobs and energy proposal that included the so-called Pennsylvania Emissions Reduction Program. Known as PACER, it is essentially a Pennsylvania-specific version of RGGI—a cap-and-trade program that gradually reduces emissions, creates tradable carbon credits that (in theory) will be fungible with those of RGGI member states, and reinvests profits into lowering consumer energy costs. “Pennsylvania is a elephant compared to the rest of RGGI,” Bertrow said, explaining the reasons why the state would want to create its own program and then tie it into RGGI.
“It would be great to see Pennsylvania join RGGI,” he said. “But I think we may be able to forge a path that will turn out for the better.”
Others are less convinced. According to them, joining the RGGI was possible only because it was implemented through executive action. The chances of something like PACER passing through the Republican-controlled state Senate are slim.
“Pennsylvania residents need and deserve serious plans to limit greenhouse gas emissions, lower energy bills and increase income,” State Senator Saval said in a statement to Grist. “So far, Senate Republicans have shown little interest in even meager efforts to do any of this. It's hard to imagine repealing RGGI will help them find religion, so to speak, on this front.”
Editor's note: The Natural Resources Defense Council is a Grist advertiser. Advertisers have no role in Grist's editorial decisions.
