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Pennsylvania State Senate
04/20/2024 10:00 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20190&cosponId=29722
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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: June 3, 2019 03:07 PM
From: Senator John T. Yudichak
To: All Senate members
Subject: Requires the Legislative Budget and Finance Committee to conduct a study of an economy-wide cap-and-trade program
 
I will soon be introducing a resolution to require the Legislative Budget and Finance Committee (LB&FC) to conduct an in-depth analytical study of how an economy-wide cap-and-trade program to reduce greenhouse gas emissions could be established.

Currently, the Pennsylvania Department of Environmental Protection is reviewing and analyzing this same proposal, which was submitted to the Environmental Quality Board through its rulemaking petition process.

I am introducing this resolution because the General Assembly is the more appropriate branch of government to be adopting environmental policy of this scope. And it is important for the General Assembly to have complete information on the topic as the state continues to address the costs associated with climate change.

Specifically, this resolution would require the LB&FC to perform an analysis of a program that would do the following:
  • Establish a Pennsylvania program where emissions from covered sources of greenhouse gas emissions would be capped, with the cap declining each year by an amount equal to three percent of 2016 emissions, starting with 2018.
  • Direct the Pennsylvania Department of Environmental Protection to auction or distribute a number of allowances (equal to one metric ton of CO2e) equal to the cap.
  • Allowances would be priced initially at $10/ton and increase annually by 10% plus the rate of inflation until it reaches the California Auction Reserve Price (currently $15.73).
  • Entities that produce fossil fuels would be required to annually surrender the number of allowances equal the total annual greenhouse gas emissions it releases into the atmosphere.
  • Entities that reduce their emissions can trade their unused allowances in a marketplace established by DEP.

This resolution will require the LB&FC to examine how such a program would be instituted in Pennsylvania, the cost to state government in administering and enforcing the program, as well as both the costs (taxes, fees, etc.) and benefits (environmental, health-related, etc.) of such a program to state and local governments, businesses, and citizens. The study will also estimate the “cost of inaction” for comparison.

I hope you’ll join me in sponsoring this important resolution. Should have any questions, please contact my office at (717) 787-7105.