RGGI will supercharge Pa.’s economy, especially for small businesses

Small businesses are the lifeblood of the American economy. Nowhere is this more evident than in Pennsylvania, where they constitute a staggering 99.6% of all businesses, and employ nearly half of the private workforce.

Yet on Nov. 1, Pennsylvania’s Commonwealth Court ruled to strike down the Regional Greenhouse Gas Initiative in a misguided decision that goes against the very interests of our state’s vibrant small-business community. Thanks to the recent appeal of the ruling by the Shapiro administration, small businesses in Pennsylvania may still have the opportunity to enjoy future RGGI benefits.

RGGI, the pioneering regional cap-and-invest program spanning 12 states in New England and the Mid-Atlantic, is not merely an environmental initiative, it’s an economic game changer.

Through RGGI, Pennsylvania stands to slash harmful carbon dioxide emissions by upwards of 225 million tons, generate over 30,000 jobs, and add an estimated $2 billion to the state’s economy by 2030.

How? Under RGGI’s cap-and-invest approach, fossil-fuel-fired electric power generators over a certain size are required to purchase allowances for each ton of carbon dioxide they emit. With this economic push, producers reduce their emissions so they can avoid purchasing as many allowances.

And the allowances they do purchase generate money that the state can invest. RGGI states invest millions in energy savings initiatives to lower bills for residents and small businesses, and in workforce development initiatives to train the next generation of clean energy workers.

RGGI is a well-established program that has been driving down emissions and delivering critical economic growth to participating states since its inception in 2005. Pennsylvania’s neighbors that are part of RGGI — including New York, New Jersey, Maryland, and Delaware — have proven that curbing carbon pollution can have significant benefits to local businesses and communities.

In 2021, RGGI investments delivered a staggering $1.2 billion in lifetime energy savings to 1,000 businesses and 44,500 households through programs funded by the initiative’s proceeds. Delaware, for example, has dedicated half of its RGGI auction revenues to a special state agency, the Sustainable Energy Utility, that uses the funds to leverage hundreds of millions in private investment in energy efficiency and renewable energy projects benefiting all sectors of the state economy.

For many small businesses, RGGI represents a golden opportunity for prosperity, offering family-sustaining jobs, energy cost savings, and investment in a resilient energy infrastructure that will supercharge our economy.

Business leaders across sectors and across Pennsylvania agree: RGGI is the indispensable catalyst for building an equitable, durable economy that envisions a clean energy future for the Keystone State. Ben Adams, a board member of Keystone Energy Efficiency Alliance and vice president of strategic development for MaGrann Associates, a small energy engineering firm active in Pennsylvania, shared this sentiment in a recent email:

“Pennsylvania’s lack of participation in RGGI is a missed opportunity to lower utility bills for consumers and invest in the local workforce and businesses like ours. The hundreds of millions of dollars available to be invested in efficiency and clean energy projects would boost hiring and help facilitate workers’ entry into these growing fields.”

Hunt Country Vineyards, a family-owned business in New York, harnessed RGGI’s support to help finance the installation of over 300 solar panels in 2015. This important investment translates to reducing more than 13,000 tons of pollution each year and saving thousands of dollars per month on electricity for the winery. This is a tangible example of how RGGI fosters sustainable economic growth for small and independent businesses and the communities they serve — benefits Pennsylvania is missing out on.

Earlier this year, Gov. Josh Shapiro convened a diverse, cross-sector RGGI working group to evaluate the merits of membership in RGGI according to a three-part test: protect and create energy jobs, take real action to address climate change, and ensure reliable, affordable power for consumers in the long term.

The group’s consensus was that “reducing greenhouse gas emissions in the Commonwealth is both necessary and inevitable” and “a cap-and-invest carbon regulation for the power sector that generates revenue to support the Commonwealth’s energy transition would be the optimal approach for the Commonwealth to meet the Governor’s charge.”

RGGI is the best option to fit that bill. It will significantly reduce Pennsylvania’s greenhouse gas emissions while generating hundreds of millions of dollars to benefit our small businesses — both those in and outside of the clean energy sector.

Shapiro’s decision to appeal the Commonwealth Court ruling is a commendable step toward securing Pennsylvania’s participation in RGGI. However, we can’t let this momentum end. We’re calling on Gov. Shapiro to continue advocating for RGGI, ensuring we can strive for an equitable and resilient clean energy future with small businesses leading the way.

Jeaneen Zappa is the executive director of the Keystone Energy Efficiency Alliance. Devi Ramkissoon is the executive director of the Sustainable Business Network of Greater Philadelphia.