James Guy II, Chair                                                                                              October 3, 2022

State Air Pollution Control Board

Members of the Air Pollution Control Board

c/o Office of Regulatory Affairs

Department of Environmental Quality

P.O. Box 1105

Richmond, VA, 23218

RE: Business Support for Maintaining Virginia’s RGGI Membership

Dear Members of the Air Pollution Control Board:

As a long-standing sustainability nonprofit organization that works with influential businesses and investors in Virginia, we write to reiterate our strong support for Virginia’s continued participation in the Regional Greenhouse Gas Initiative (RGGI). It is important for us to address comments made at the August 31 meeting when it was announced that the Youngkin administration intends to cease participation in RGGI.

To reaffirm the sentiments of leading businesses in the Commonwealth, we recognize that climate change poses a material risk to business operations, the livelihood of employees, and the health of Virginia’s communities. In March of 2020, a coalition of our Virginia based member companies and other large Virginia employers sent a letter in support of Virginia joining RGGI. In January of this year, 11 companies and educational institutions wrote a letter in support of maintaining and building upon Virginia’s climate legislation. RGGI is one of many important tools that exist in Virginia to help businesses cut energy costs, avoid the volatility of fuel prices, and stay competitive.  Our companies are motivated to make investments in places where we can continue to access these types of policies.

The following is our response to the rationale behind the legally dubious Notice of the Intended Regulatory Action to withdraw from RGGI – abandoned responsibility, the cost burden, and that RGGI is not working for Virginia.

Abandoned Responsibility

• RGGI is a cooperative agreement among 11 U.S. states; there is no abandonment or relinquishment of state sovereignty.
• RGGI is implemented through a CO2 Budget Trading Program specific to each member state. Virginia’s own Department of Environmental Quality coordinates Virginia’s participation.
• Due to the structure of RGGI, member states are allowed to bank emission allowances for future use, which yields substantial flexibility in the trading program.

The Cost Burden

• After decades of overinvestment in fossil fuels, Virginia’s electric rates have climbed higher than every neighboring regulated state.
• Under the leadership of both Republicans and Democrats, RGGI states have seen their economies grow faster while utility rates are lower.
• RGGI states have agreed that at least 25% of the emission allowance value will be distributed for consumer benefit, which is predominantly used for energy efficiency and renewable energy investments. Studies have indicated that this provides multiple benefits of emission reductions, lower electricity bills, and regional job creation.
• Any adjustment in the utility rate structure should come through legislative reform and not the proven and successful RGGI program.

RGGI is not working for Virginia

• The market-based mechanisms of RGGI not only ensure that Virginia pursues the most economically efficient carbon reduction pathways, but that the proceeds from RGGI allow for the establishment of energy efficiency programs and the creation and expansion of flood mitigation programs in every corner of the Commonwealth. Virginia has received approximately $452 million in cumulative proceeds since its first auction in March 2021.
• In terms of health benefits, for the first six years of the RGGI program, RGGI states’ improvement in air quality had a cumulative economic value of $5.7 billion.
• RGGI accounts for nearly half of the northeastern United States’ post-2009 emissions reductions, which is far greater than those achieved in the rest of the United States.
• The estimated avoided cases of adverse children health outcomes from 2009 to 2020, includes an avoided cost ranging from $191 to $350 million. This monetary figure represents the prevention of infant mortality, preterm births, respiratory illness, and asthma among our most vulnerable Virginians.

We hope Virginia will continue to provide a hospitable environment for spurring clean energy adoption and expansion by not leaving RGGI. We appreciate the many economic opportunities presented by Virginia’s continued transition to a clean energy economy. It is critical that these programs persist to ensure both the state and our companies achieve the shared goals of driving new in-state investment, encouraging innovation, and fostering long-term economic health.

Sincerely,

Michael Callan

Senior Manager, State Policy

Ceres

617-247-0700 ext. 317

mcallan@ceres.org

The Ceres policy program works with major institutional investors and companies who support policies that increase access to clean energy, energy efficiency, energy storage, electric vehicles, public transit, and more. The Ceres BICEP Network is a coalition of more than 80 major employers committed to advocating for stronger climate and clean energy policies. Ceres’ BICEP Network members Adobe, Ball Corporation, IKEA, JLL, Kaiser Permanente, Lyft, Mars Inc., McDonald’s, Microsoft, Nestlé, Salesforce, Workday, and Worthen Industries all have facilities in Virginia.