By Steve Haner
The numerous falsehoods in a recent Richmond Times-Dispatch story about the carbon tax so loved by Virginia Democrats start right with the headline. It states that Virginia’s decision to withdraw from the Regional Greenhouse Gas Initiative “is costing millions.”
The figure of $150 million per year is then mentioned, apparently simply quoting the Democratic legislators who held a news conference May 21 to pledge their continued fealty to the program. They had sought to order Virginia back into RGGI with a budget provision, which they then agreed to drop in the final compromise.
The $150 million amount they mentioned is blatantly false, far too small. Were Virginia still part of the 11-state cap and trade compact, RGGI would be costing utility ratepayers as much as $350 million per year, based on the most recent carbon tax amount in the first 2024 RGGI allowance auction.
So, the decision to stay out is not “costing” money but will actually save utility ratepayers as much as $700 million over 2024 and 2025. Dominion Energy Virginia was the largest Virginia buyer of RGGI carbon allowances under the regulatory regime, and it has been passing along those costs directly to customers on all its monthly bills.
This was the second time in days that the capital city newspaper gave Democrats access to its front page to complain about Governor Glenn Youngkin’s opposition to the carbon tax regulation, and to claim he broke the law in repealing it. The May 18 story is just as fuzzy about who actually pays the carbon tax.
Two one-sided, fact-challenged stories with little effort to seek balance in three days is media bias, pure and simple. A failure to state clearly that electricity customers provide all the money “received” by the state treasury rises to the level of fake news.
Both use the exact same phrase on that, reporting “(Governor) Youngkin said returning to RGGI would amount to an additional $500 million tax on Virginians’ electricity bills as utilities pass on the costs to customers.” Would amount to? It clearly is a tax on carbon-based fuels, no different than other state taxes on gasoline or alcohol. Use more, pay more.
There is a hidden agenda to this virtue signal theater. A Virginia circuit court still has a lawsuit before it that seeks to reverse the decision to repeal RGGI. That Democrats who pushed hard to reimpose RGGI by legislation, and failed, should tell a judge that the governance process is working as it should.
Similarly, the Democrats had every chance to use tax dollars from other sources to fund the projects that previously used RGGI tax proceeds. They didn’t. They did not even offer budget amendments to try. This should all now become arguments for immediate dismissal of the lawsuit.
Democrats were quoted is the second story with another glaring falsehood, arguing that Virginia needs to remain in RGGI because it is “a permanent solution.” The whole point of RGGI, and the more onerous Virginia Clean Economy Act, is to eventually end the use of coal and natural gas in power plants. As they go away, the RGGI money must disappear.
Or perhaps that was the Democrats admitting they finally understand we will continue using those fuel sources long beyond the artificial deadlines they have imposed for ending them. Then the RGGI tax dollars could become permanent, as is the case with most new taxes.
Another whopper: “Environmental groups say power plants’ payments to RGGI are a potent incentive to power plants to cut carbon emissions, which in turn slows climate change.” Since they just pass the cost along directly to customers, there is no pressure on the power companies. What they can also do is buy carbon-based power from non-RGGI states, simply moving the carbon emissions around.
To claim RGGI “in turn slows climate change” is ridiculous in a world where energy production from coal and natural gas is exploding outside of the United States. One new Chinese coal plant adds more CO2 to the atmosphere than a year of RGGI regulations will ever remove, and they are building far more than one.
CO2 concentration will not go down in our lifetimes. It will only rise. Four more decades of failed promises and political games on top of the last four decades of futility will not change that. A rapid move to nuclear power might, might bend the curve.
The Democrats had one and possibly two paths to getting their budget language on RGGI adopted. The choices they made kept it from happening. One path previously outlined was to accept many, perhaps most, of Youngkin’s long list of budget amendments but to reject his amendment on RGGI. Would he still have vetoed the entire budget just over that? Doubtful.
Then, during the budget negotiations, a question came to me. Who called is not important. The question was: what if the RGGI set-up was amended so the carbon tax revenue was returned right back to ratepayers? The utilities would still have the cap and trade rules in place, with less and less carbon fuel allowed over time, but the allowance costs imposed on ratepayers would be reimbursed.
The answer was, sure, that would really help. That is exactly what former Governor Terry McAuliffe (D) proposed to do years ago when he first pushed to join the RGGI compact. It wasn’t until 2020 that the Democrats turned RGGI into a direct carbon tax funding specific programs.
But if that question came because there was a serious proposal along those lines, it never went anywhere. And the reason is obvious. The whole point of the RGGI scheme is to 1) raise a bunch of tax dollars that 2) Democrats can spend on constituency groups who vote for them. Without the revenue, RGGI is even more obviously just a waste of time.
This policy win will be a highlight of Youngkin’s term, and if Republicans do not attack Democrats for this carbon tax scheme (and the rest of their unpopular anti-consumer green agenda), then they are missing their best opportunity for electoral victory in 2025. This is a big fat tax that Abigail Spanberger will impose in a New York minute.
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