The Pennsylvania Supreme Court heard oral arguments today on the state’s participation in the Regional Greenhouse Gas Initiative (RGGI). 

In 2019, then Governor Tom Wolf tried to join Pennsylvania to RGGI using an executive order. Republican lawmakers sued, and the case has been working through the courts ever since.

The Commonwealth Court ruled that involvement is unconstitutional in 2023, saying the program has a tax component, which can only be authorized by the general assembly (not an executive order).

Governor Josh Shapiro appealed to the Supreme Court— adhering to the Democrat party’s focus on environmentalism—and here we are today.

"Air is a resource that we have to protect,” Jessica O’Neill said, a lawyer for Penn Future. She represented her non profit and several others in today’s arguments.

RGGI is an agreement between 10 states to reduce carbon emissions (If Pennsylvania is counted as an honorary member, there are 11 states). Each state sets a cap on how much carbon they want produced, with the goal of lowering that cap as the years go by (thus lowering emissions).

For every ton of carbon that a coal or natural gas plant releases, they have to buy a carbon allowance. There are only so many allowances issued by the participating states (the enforcement of the carbon reduction). That money is deposited in the state where the plant operates and used to further reduce greenhouse gas emissions.

“The [Environmental Protection] department has said that what it would do with the [RGGI] proceeds is spend a third of them on energy efficiency programs. A third of them on renewable energy programs. And a third of them on direct abatement of greenhouse gases,” O’Neill said.

The Pennsylvania Department of Environmental Protection says participating in RGGI is legal because it is a regulation; thus the money that energy plants pay is a fee, not a tax. They said today the regulation is authorized by Governor Wolf's executive order, but also by the state’s air pollution control act.

“That's the reality. It's a big regulation, because it's a big problem. And it's a really important problem to address,” O’Neill said.

Republican lawmakers continue to argue that the Commonwealth Court’s ruling was accurate, describing the program’s payment measures as a tax.

“Is it constitutional for a governor, any governor, to unilaterally enter our commonwealth into a multistate compact and impose a tax?” Sen. Joe Pittman (R) said, the Republican Leader in the Senate.

During initial arguments, several justices grappled with how much autonomy the DEP had to create such expansive regulatory infrastructure. One justice even noting that defining the program as taxes or fees was a false binary choice.

RGGI is not being enforced in Pennsylvania at this time. The regulations have been written and introduced, but the court action keeps them from being used.

Republicans say even the threat of the policy winning in courts has kept power plant investments away.

“We keep moving the goal post. And they’re basically washing their hands of Pennsylvania, saying 'look, we've complied with your federal regulations. We've complied with the clean air act and everything else that you put out there’,” Rep. Jim Struzzi (R) said, the minority appropriations chair. "'But then you continue to come up with new stuff. We're done with that kind of business environment’."

With arguments complete, case participants will now wait for the Supreme Court to release its opinion of the arguments. While there are multiple legislative proposals surrounding energy policy in Harrisburg, Republicans remain reluctant to negotiate anything major as they wait for a decision on RGGI.

When opinions are eventually published, there are three most likely results to expect; the court can rule in favor or opposition to state participation in RGGI through the executive order/agency regulation. The high court could also send the case back to lower courts for further clarifications on certain arguments.