March 29, 2023

Ms. Karen G. Sabasteanski

Department of Environmental Quality

111 East Main Street

Suite 140

P.O. Box 1105

Richmond, VA 23218

Re: Repeal CO 2 Budget Trading Program as Required by Executive Order 9 (Revision A22)

Dear Ms. Sabasteanski:

I respectfully submit the following comment in response to the request from the Department of Environmental Quality (DEQ) on its Notice of Proposed Rulemaking concerning withdrawal from the Regional Greenhouse Gas Initiative (RGGI) (39 Va. Reg. Regs. 1436 (Jan. 30, 2023)). I oppose the repeal of 9VAC5-140 and contend that there are clear disadvantages associated with repealing the regulation. Further, I hold that withdrawal from the RGGI is inconsistent with Va. Code Ann. § 10.1-1308 and cannot occur through regulatory action due to the statutory mandate in the Clean Energy and Community Flood Preparedness Act. As a Virginia resident, I am concerned with regulatory change that threatens the environment in my home and may negatively impact the health of my community. As a law student, I take issue with regulatory action that directly contradicts statute, violating the separation of powers doctrine.

1. The State Air Pollution Control Board misrepresents the impact of the RGGI in Virginia.

There is little factual support for the sweeping declaration the State Air Pollution Control Board (“the Board”) is making with regard to the benefits of Virginia participation in the RGGI. The Board states that “there are no disadvantages to the public or the Commonwealth associated with this regulatory change.”[1] By claiming there are no disadvantages to the public or Commonwealth, the Board makes a bold claim that not a single benefit arose from Virginia participation in the RGGI. However, there is evidence that certain benefits may have resulted from the RGGI in Virginia and that some individuals will be disadvantaged by repeal of the program.  

First, the economic impact analysis purports there may be real environmental and health benefits lost due to Virginia’s withdrawal from the program. In 2021, the first year of Virginia’s participation in the RGGI, total power sector CO₂ emissions in the state declined from 32.8 million tons to 28.5 million tons.[2] Due to the limited data available, the analysis determines it is not clear whether all or part of the decline would have happened without RGGI participation due to other potential contributing factors.[3] However, the analysis fails to conclusively demonstrate that the RGGI offered no benefits; instead, it recognizes that potential benefits garnered from the CO₂ reduction will be lost upon withdrawal from the RGGI.[4] The economic impact analysis admits that “all entities and people in Virginia would potentially experience associated environmental and health impacts.”[5]

Second, some small businesses will be disadvantaged by the repeal of the regulation. Various small firms supply products and services for the flooding and energy efficiency programs funded through Virginia RGGI participation.[6] The economic impact analysis explicitly provides that these small firms will lose business if the revenue for the flooding and energy efficiency programs is not replaced.[7]

In considering these findings from the economic impact analysis, we see evidence of disadvantage to members of the Commonwealth. The elimination of the need for services associated with the energy efficiency programs will detrimentally affect certain small businesses, and the potential impact on CO₂ emissions will harm the entire Commonwealth public. Thus, the Board has made significant misrepresentations to Virginians in suggesting there are no disadvantages to Virginia’s withdrawal from the RGGI.

The State Air Pollution Control Board will likely argue they have made no misrepresentations because there is not yet clear evidence that Virginia’s participation in the RGGI was the direct cause of the reduction in CO₂ emissions. However, I disagree with this interpretation of the evidence. There is a significant difference between the assertion that it is unclear whether the decline in CO₂ emissions can be attributed to the RGGI at this point, and the Board’s conclusive assertion that no benefits from the RGGI have materialized. The Board takes a large interpretive leap to arrive at this conclusion. It makes sense that we cannot yet conclusively attribute outcomes to the RGGI or see a trend of long-term benefits from the program, as Virginia has only been a part of the RGGI for a little over a year. We need more time to study the environmental impact, and it is a misrepresentation to suggest the program has created no benefits and insinuate the program will only ever be a detriment to Virginians.  

Further, the State Air Pollution Control Board’s misrepresentation is particularly concerning in light of the Board’s position in the government and its associated mission. The State Air Pollution Control Board exists as a part of the Virginia Department of Environmental Quality (DEQ), whose mission is to protect and enhance the environment of Virginia in an effort to promote the health and well-being of individuals in the Commonwealth.[8] We might assume an agency committed to this mission would show deference to a program that may already be enhancing the environment of Virginia, instead of abandoning a promising program after its first year and misrepresenting the potential for long-term benefits from the RGGI.

2. Withdrawal from the RGGI is inconsistent with Va. Code Ann. § 10.1-1308.

If the State Air Pollution Control Board repeals the regulation, the Board will take an action that is not consistent with Virginia statute. In particular, the Board would be supporting an action contradictory to the purpose of Va. Code Ann. § 10.1-1308, the statute wherein the Board identifies its legal authority to act.[9]

Repealing the regulation is inconsistent with the statutory mandate that the Board “shall adopt regulations to reduce, for the period of 2031 to 2050, the carbon dioxide emissions from any electricity generating unit in the Commonwealth.”[10] This language is clear and unambiguous. The RGGI was instituted in Virginia in order to reduce power sector CO₂ emissions.[11] Thus, the regulation enabling the RGGI presents a perfect example of a regulation carrying out a clear statutory mandate. To repeal this regulation would be to directly oppose Virginia statute.

Governor Youngkin and the State Air Pollution Control Board argue the regulation should be repealed because its benefits have not materialized.[12] They would likely argue that a regulation failing to carry out its statutory purpose, and with harmful effects on the Virginia economy, should be repealed. However, as detailed in the previous section, it is not clear that the RGGI is failing to materialize benefits. It is inconsistent with statute to repeal the regulation now, when the regulation is intended to reduce CO₂ emissions and may already be contributing to significant reduction in emissions. The State Air Pollution Control Board must not violate statute by repealing a regulation carrying out a clear statutory mandate.

3. The State Air Pollution Control Board does not have the legal authority to remove Virginia from the RGGI.

The State Air Pollution Control Board lacks the legal authority to remove Virginia from the RGGI; to take this action at the direction of Governor Youngkin is to violate the statutory mandate for participation in the RGGI under the Clean Energy and Community Flood Preparedness Act. It is clear from the overall statutory language that the General Assembly intended for the Clean Energy and Community Flood Preparedness Act to serve as a mandate.

The precise language of the statute introducing the RGGI is ambiguous. In the same statement, the statute authorizes the Director to establish the RGGI program and mandates the Director sell 100 percent of allowances issued each year unless doing so “is otherwise inconsistent with the RGGI program.”[13] The statement introduces ambiguity, wherein one might interpret the Board to have deference regarding participation in the RGGI, while another might interpret the Board to be mandated to enter the RGGI and take subsequent actions. Because ambiguity exists, we must look to the surrounding language of the statute to determine the legislative intent.

The surrounding language of the statute demonstrates that Virginia participation in the RGGI is intended to be a statutory mandate, not an authorization. The statute states that various departments “shall” prepare an annual written report “describing the Commonwealth’s participation in RGGI.”[14] The statute provides detailed directions for the distribution of funds from the RGGI program.[15] It is clear from the language and construction of the statute that the General Assembly intended RGGI participation to occur, not to be a decision delegated to those outside of the legislature.

Thus, the State Air Pollution Control Board does not have the legal authority to remove Virginia from the RGGI through regulatory measures. Similarly, Governor Younkin, does not have the legal authority to remove Virginia from the RGGI through an Executive Order. These actions threaten the separation of powers in Virginia’s government, a critical, long-standing component of a successful democracy.

There are other mechanisms through which those opposing Virginia participation in the RGGI may seek withdrawal from the program. Members of the General Assembly have pursued, and likely will continue to pursue, this route; several members carried bills in 2022 that would have repealed the Clean Energy and Community Flood Preparedness Act.[16] In addition, the Governor has a prominent voice in the passage of the budget bill and could leverage this power; in fact, in 2019, the General Assembly included a provision in the budget bill that prohibited the use of state funds to support membership or participation in the RGGI.[17] These examples of attempts to stop Virginia participation in the RGGI demonstrate a significant consideration: there are legal, democratic methods to withdraw Virginia from the program. There simply is not enough support in the General Assembly, and perhaps among the public, for these efforts to succeed. However, this lack of success by those who oppose the RGGI cannot result in an attempt to maneuver around the democratic process. To do so threatens the separation of powers doctrine and Virginia’s commitment to democracy.

In conclusion, I oppose the Board’s attempt to withdraw Virginia from the RGGI through regulatory action. I recommend the Board keep the current regulation and explore other mechanisms to reduce economic concerns related to participation in the RGGI. I appreciate the opportunity to submit the foregoing analysis and the DEQ’s consideration of my comments.

Sincerely,

Callie R. Keen

Callie R. Keen

University of Richmond School of Law

J.D. Candidate, Class of 2023