Governor Wolf recently joined a regional compact of eight other states and Washington D.C. to reduce carbon from motor vehicle emissions. The newly formed “Transportation and Climate Initiative” has a hopeful government promo line: cap-and-invest. But if this latest top-down market meddling follows the same path as the program it’s modeled on, the Regional Greenhouse Gas Initiative (RGGI) that targets power plants - and nothing suggests it won’t - it should be more aptly tagged tax-and-impoverish.
“The only effect this compact will have is to impose a regressive tax on the Pennsylvanians who can afford it least,” said David N. Taylor, PMA President & CEO. “Tt will have zero effect on climate change, or anyone’s conception of what that means.”
A week before Christmas, Patrick McDonnell, Secretary of Pennsylvania’s Department of Environmental Protection (DEP), posted this message on his DEP twitter account: “to better our transportation system and fight #climatechange, PA and 9 other jurisdictions will be working together in the to develop a policy that harnesses all of the opportunities #cleantransportation has to offer.”
DEP did not respond to a request to provide details of the plan, and interviews with business leaders and government officials in Pennsylvania and in other states indicate that other than basing the plan on RGGI, little about it has been fleshed out. But RGGI, and a similar California carbon reduction plan, stand as warning enough for businesses and consumers.
The 2012 California plan requires greenhouse-gas emissions to be reduced 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050 – targets impossible to meet.
What the plan has actually accomplished, according to policy analyst Tim Benson writing last year for the Heartland Institute, is this: “Cap-and-trade has helped force one million California households to spend at least 10 percent of their household income on energy costs, a situation experts refer to as living in ‘energy poverty.’ In some lower-income counties, as many as 15 percent of households are classified as energy impoverished.”
In addition, Jonathan Lesser of the Manhattan Institute estimates the California cap-and-trade program raised residential electricity costs in the state by as much as $540 million in 2013. California’s Legislative Analyst’s Office (LAO) estimates cap-and-trade will increase gasoline prices by 15–63 cents per gallon by 2021, and by 24–73 cents per gallon by 2031. LAO projects by 2021 Californians will be spending $2 billion to $8 billion extra on gasoline. By 2026, it also estimates the increased gasoline prices will cost $150–$550 per household
The benefits from these kinds of programs? “No added reductions in carbon emissions, or associated health benefits, from the RGGI program,” writes David T. Stevenson of Delaware’s Caesar Rodney Institute in an August 2017 article for the Cato Institute. He adds that RGGI emission reductions are consistent with national trend changes caused by new EPA power plant regulations and lower natural gas prices.
RGGI states, moreover, have experienced a 13 percent drop in goods production and a 35 percent reduction in the number of energy-intensive goods created. In five similar states, Stevenson found there was a 15 percent increase in goods production and only a 4 percent decrease in energy-intensive manufacturing. RGGI states also had the amount of their power imported from other states increase from 8 percent in 2007 to 17 percent in 2015.
In sum: “It’s pretty silly,” said Ben Zycher, Energy and Environmental policy scholar with the American Enterprise Institute. “Take their assumed reductions in greenhouse gas emissions and then run the EPA climate model to get a predicted temperature effect in 2100,” he added. “It will be in the ten-thousandths or one-hundred-thousandths of a degree.”
One certainty is that that the cost of doing business, and with it, the cost of living will increase. Some states in the compact will be hit harder than others, and Massachusetts will be one of them, says Christopher Carlozzi, NFIB’s Massachusetts State Director.
“The New England area already has some of the highest energy and transportation costs in the county,” he said. “Thousands of businesses and commuters in the Commonwealth will incur higher expenses, not only directly at the pump but also indirectly for a wide array of goods and services as the impact of new gas fees ripples through the economy.”
Massachusetts businesses and consumers suffer under the added dread of a having a legislature dominated by progressives, who will tend to agree with whatever the tax flavor of the day is to achieve whatever carbon reduction goals are set.
Pennsylvania will be hard hit as well; we already have the highest gas taxes in the nation.
“Anywhere along the supply lines that tax is applied will result in a terrible burden on businesses and consumers,” said Rebecca Oyler, PA NFIB’s Legislative Director.
But on the side of business and consumers is a General Assembly with a history of blocking Wolf’s leftist flights of fancy, including proposals for unprecedented, across-the-board tax increases. And if Wolf impersonates Barack Obama (“I have a phone and a pen”), the House now has a new oversight committee to counter executive fiat.
“The Wolf Administration, and the DEP especially, have consistently distorted legislative intent,” one Pennsylvania business leader. “Our hope is that the new oversight committee will counter that and future executive orders that would attempt to bypass the legislative process.”
Ed note: As of this writing, the AP is reporting that Wolf is issuing executive orders to reduce greenhouse gas emissions by 26 percent by 2025 and by 80 percent by 2050. The reductions are in line with the 2015 Paris climate agreement. Most of the changes will likely require legislative agreement, the AP reports.