By Christopher Martin (Bloomberg) and Keshia Clukey (Bloomberg BNA)
Pennsylvania, the heart of the U.S. shale-gas boom and one of the biggest coal-producing states, is joining a carbon market.
Governor Tom Wolf on Thursday ordered regulators to come up with a plan by July 31 to regulate emissions from power plants and establish rules that would allow the state to participate in a multi-state carbon market called the Regional Greenhouse Gas Initiative.
Pennsylvania’s joining represents the most significant addition to the effort yet. The state is among the top carbon-dioxide emitters in the U.S., and its economy is more dependent on fossil fuels than any other of the 10 states already participating. The move comes months after Virginia Governor Ralph Northam’s failed attempt to join the group and follows neighboring New Jersey’s decision to return to RGGI.
“This is a game changer for a top energy producer like Pennsylvania to take this big step toward a cleaner future,” said Kate Konschnik, director of the Climate and Energy Program at Duke University’s Nicholas Institute for Environmental Policy Solutions.
Pennsylvania is the second-largest natural gas producing state in the U.S., trailing Texas, and sits atop one of the world’s largest sources of the fossil fuel. It was the third-largest coal producer in 2017. About 15% of Pennsylvania’s electricity comes from coal, and 45% is from natural gas, according to the U.S. Energy Information Administration.
The Regional Greenhouse Gas Initiative was established in 2009 to help put a price on carbon emissions in the U.S. Northeast and Mid-Atlantic. The program requires power-plant operators to buy permits to emit greenhouse gases, then gradually shrinks the supply of those allowances to push generators to pollute less. Members include New York, Connecticut and Massachusetts. New Jersey is set to rejoin in 2020 after having left under former Governor Chris Christie.
Coal-fired power generation has historically produced more carbon dioxide in Pennsylvania than any other segment, accounting for about a quarter of the state’s total emissions, state data show. Its emissions equate to about 75% of all the other states already in RGGI, according to Konschnik.
“This is a very big actor coming to the table,” she said.