WASHINGTON (Reuters) - Virginia's Republican Governor-elect Glenn Youngkin this week pledged to remove the state from a regional cap and trade carbon market using "executive action."
Virginia passed a bill in March 2020 under Governor Ralph Northam, a Democrat, to join the Regional Greenhouse Gas Initiative (RGGI), a market-based program to reduce greenhouse gas emissions from power plants in 11 U.S. Northeast and mid-Atlantic states. The program has brought in $228 million to Virginia to fund state programs on energy efficiency and flooding.
Youngkin, a former CEO of private-equity firm Carlyle Group (NASDAQ:CG), won the election last month in an upset and will take over in January. His victory is likely to embolden Republicans ahead of next year's midterm elections, when control of Congress will be at stake.
Youngkin said in a speech late on Wednesday that "RGGI describes itself as a regional market for carbon, but it is really a carbon tax that is fully passed on to ratepayers. It’s a bad deal for Virginians. It’s a bad deal for Virginia businesses."
The governor-elect's pledge came after prices for emissions credits in RGGI hit a record-high $13 per ton in an auction last week amid rising investor confidence in carbon markets and as emissions regulations on power plants take hold.
It was unclear how long it could take Youngkin to use executive action to remove the state from RGGI and whether he would be successful in doing so. The Democratic Party of Virginia called Youngkin's pledge "irresponsible and short-sighted."
RGGI membership is also being debated in Pennsylvania. Governor Tom Wolf, a Democrat, supports his state joining the pact but there is an effort in the state legislature to block membership.