Will Virginia leave RGGI? | Emissions News

Repeal of RGGI
The publication of the repealing regulation follows a 4-3 vote by the state’s Air Pollution Control Board (APCB) in June 2023 to approve the repeal. After the approval vote, the repealing regulation was subject to an executive review process. The executive review included the Department of Planning and Budget (DPB), the Secretary of Natural and Historic Resources, and Virginia Governor Glenn Youngkin. The process concluded on July 7th. The repealing regulation was submitted to the Virginia Register of Regulations on July 10th before being published on July 31, 2023. The regulation is subject to a 30-day adoption period until it becomes effective on August 30, 2023.

SELC Lawsuit
On the same day the repealing regulation was published, the Southern Environmental Law Center (SELC), a nonprofit environmental legal advocacy organization, filed a notice stating that it planned to appeal the withdrawal from RGGI to the APCB. On August 21, the SELC filed its lawsuit against the APCB, the Virginia Department of Environmental Quality (DEQ) and the director of the DEQ in the Fairfax County Circuit Court in Virginia. The SELC filed the lawsuit on behalf of Appalachian Voices, the Association of Energy Conservation Professionals, Faith Alliance for Climate Solutions and Virginia Interfaith Power and Light.

In the appeal, the SELC argues that the 2020 Clean Energy and Community Flood Preparedness Act (RGGI Act) requires the DEQ to implement regulations to participate in RGGI. While the statute clearly authorizes the DEQ to bring the state into RGGI, the SELC argues that it also mandates participation, citing the following language in the law: “The Director shall seek to sell 100 percent of all allowances issued each year through the allowance auction.” Notably, the lawsuit also references a previous 2020 legal challenge in which the Richmond Circuit Court ruled in favor of RGGI participation as precedent.  In this case, the Virginia Manufacturers Association filed a petition to vacate the regulations in the Richmond Circuit Court and the DEQ successfully argued that “…the Act mandated that DEQ take two significant steps: implement and manage a direct auction CO2 program, and sell 100 [percent] of Virginia’s CO2 allowances in that program. Through the [RGGI Regulation], DEQ has done exactly what the General Assembly mandated.”

Additionally, the SELC lawsuit raises the point that the legislature has tried to repeal RGGI multiple times, but all of these attempts have failed. This is important because the SELC maintains that the only way to lawfully withdraw from RGGI is through legislative action.

In response to the lawsuit, Virginia Secretary of Natural and Historic Resources, Travis Voyles, who has helped advance the repeal of RGGI, stated that RGGI constitutes a regressive tax and does not incentivize emissions reductions. Previously, Voyles argued that the RGGI Act merely authorizes but does not require Virginia to participate in RGGI.

Whether the RGGI Act authorizes or requires participation in RGGI will likely be the key question addressed in the lawsuit.

ESAI Assumptions
It is possible that the Fairfax County Circuit Court will issue a stay of the repeal before it takes effect on August 30, 2023. A stay would preserve the status quo and prevent the repeal from becoming effective while allowing time for the court to hear and decide on the merits of the regulations.

In Pennsylvania, the Commonwealth Court issued an injunction of the regulations requiring the state to join RGGI after parties filed lawsuits challenging the regulations. The repeal allows for participation through the end of 2023, so regardless of judicial action, Virginia will be in RGGI through the end of the year.