|Action||Repeal CO 2 Budget Trading Program as required by Executive Order 9 (Revision A22)|
|Comment Period||Ended on 3/31/2023|
RE: Ongoing 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 and across the nation, we write to reiterate our strong support for Virginia’s continued participation in the Regional Greenhouse Gas Initiative (RGGI). RGGI is a proven, market-based mechanism that will help ensure the Commonwealth pursues the most economically efficient carbon reduction pathways.
Major businesses in the Commonwealth understand the costs of energy policy and the impacts of those policies on their operations. They also recognize that climate change poses a material risk to business operations, the livelihood of employees, and the health of Virginia’s communities – and they have set goals to reduce or eliminate their emissions. That’s why, 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. Then in 2022 and in 2023, companies and academic institutions wrote letters to the legislature in support of maintaining and building upon Virginia’s climate legislation, highlighting RGGI as a core component. A recent report found that RGGI states have reduced power sector carbon emissions over 50% since 2008, while the region’s gross domestic product has continued to grow. Companies are motivated to make investments in places where they can continue to access these types of decarbonization policies; the state should not underestimate the impact of Virginia’s climate policies like RGGI to drive private sector investments.
Not only is RGGI an important decarbonization tool that can help businesses cut energy costs, avoid the volatility of fuel prices, and stay competitive, the program generates significant revenue for states to invest in critical programs, like energy efficiency and coastal resiliency. During the first two years of Virginia’s participation, RGGI provided $250M to make low-income housing in Virginia more energy efficient (approximately half of total RGGI funds). These types of investments yield significant returns. States that invested 2020 RGGI funds in energy efficiency are expected to see a cumulative return of about $1.2B in lifetime energy bill savings and avoid the release of 4.6 million short tons of carbon. In Maine, these investments lowered energy bills of customers participating in energy efficiency programs by more than $41M. The neighboring state of Maryland has used RGGI funds to offer targeted energy efficiency programs for local data centers, and those investments are also paying off.
Decarbonization is an economic opportunity for Virginia. It is critical that RGGI and Virginia’s other climate and clean energy programs persist to ensure both the state and the business community achieve their shared goals of driving new in-state investment, encouraging innovation, and fostering long-term economic health.
In close, and as shared in a former public comment, please find below Ceres’ response to the administration's rationale behind the Notice of the Intended Regulatory Action to withdraw from RGGI – abandoned responsibility, the cost burden, and that RGGI is not working for Virginia.
RGGI is a cooperative agreement among 11 U.S. states; there is no abandonment or relinquishment of state sovereignty.
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 $524 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.
Thank you for your consideration. Ceres and our business partners hope Virginia will remain in RGGI and continue to provide a hospitable environment for spurring clean energy adoption and expansion.
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 with operations in Virginia include Adobe, Ball Corporation, IKEA, JLL, Kaiser Permanente, Lyft, Mars Inc., McDonald’s, Microsoft, Nestlé, Salesforce, Workday, and Worthen Industries.