Pennsylvania, RGGI, and the Limits of State Authority
On April 8, 2025, President Trump signed an Executive Order titled “Protecting American Energy from State Overreach.” The order aims to challenge state-level climate policies that restrict the production, transportation, or use of fossil fuels—arguing that such restrictions threaten national security, economic growth, and access to affordable energy. It directs federal agencies like the U.S. Department of Energy (DOE), U.S Environmental Protection Agency (EPA), and U.S. Department of Transportation (DOT) to identify and oppose these policies. Additionally, the Attorney General is instructed to pursue legal action against states whose laws may conflict with federal oversight, particularly in matters of interstate commerce and federal supremacy.
This move sets the stage for a growing conflict between federal efforts to protect traditional energy industries and state-led climate initiatives—like the Regional Greenhouse Gas Initiative (RGGI).
RGGI is a multi-state, market-based program designed to reduce carbon dioxide (CO₂) emissions from power plants. It operates through a cap-and-trade system, setting a limit on total emissions and requiring power plants to purchase allowances for every ton of CO₂ they emit. These allowances are sold at quarterly auctions, and the cap is gradually lowered to drive down emissions over time. Revenue generated is reinvested in clean energy projects, energy efficiency programs, and climate resilience efforts across participating states.
Pennsylvania attempted to join RGGI in 2022 through a regulatory process under the Wolf Administration, bypassing legislative approval. However, in November 2023, the Commonwealth Court blocked Pennsylvania’s participation, ruling that the initiative was effectively treated as a tax—something that, under state law, requires approval by the General Assembly. The court also stated that the Pennsylvania Department of Environmental Protection (DEP) did not have the authority to impose such a policy unilaterally. Governor Josh Shapiro appealed the decision, and the Pennsylvania Supreme Court is scheduled to hear arguments in May 2025.
If the Pennsylvania Supreme Court decides in Governor Shapiro’s favor, Pennsylvania will join Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia. These states have agreed to be bound by independent regulations which place limits on CO₂ emissions from electric power plants. RGGI, a non-profit, is the first market-based, cap-and-investment initiative in the U.S.
For more information on RGGI, either see its webpage rggi.org/rggi-inc/contact or call (212)417-7329.
