The Pennsylvania Commonwealth Court declared that the Pennsylvania rulemaking that made Pennsylvania a RGGI participant was void because it constituted an unconstitutional tax imposed by the Pennsylvania Department of Environmental Protection and Environmental Quality Board. The court found that it was undisputed that “significant monetary benefits” were anticipated from participation in the RGGI carbon dioxide allowance auctions; that there was no cited authority for the agencies to obtain or retain auction proceeds for allowances purchased by non-Pennsylvania covered sources, which are not subject to the agencies’ regulatory authority and “not tethered to CO2 emissions in Pennsylvania”; that only 6% of proceeds would be attributable to the costs of administering the program; and that the auction proceeds would exceed total funds appropriated to the agencies “by nearly threefold.” The court found that participation in RGGI would thus generate moneys “grossly disproportionate” to oversight costs and annual regulatory needs and relate to activities beyond the agencies’ jurisdiction. The court held that the regulations therefore were invalid and unenforceable. The court said that RGGI participation “may only be achieved through legislation duly enacted by the Pennsylvania General Assembly.” Three judges did not participate in the case, and one judge dissented, writing that in her view there were genuine issues of material fact at this stage regarding whether the rulemaking established a fee or a tax.

Proceeding concerning the publication of Pennsylvania regulations to implement the State's participation in the Regional Greenhouse Gas Initiative cap-and-trade program for carbon dioxide emissions from power plants.

Ziadeh v. Pennsylvania Legislative Reference Bureau

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Pennsylvania Commonwealth Court Voided Pennsylvania’s RGGI Regulation

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Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

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Pennsylvania Commonwealth Court Voided Pennsylvania’s RGGI Regulation

Policy instrument

Risk

Fossil fuel

Greenhouse gas

Economic sector

Finance