Virginia exit from multistate carbon cap-and-invest program ruled unlawful

FLOYD, Va. (CN) — A state court judge on Wednesday found Virginia's Republican governor unlawfully exited a multistate carbon cap-and-invest program without approval from the Democrat-controlled legislature. 

Floyd County Circuit Court Judge Randall Lowe ruled in favor of the Association of Energy Conservation Professionals, which successfully challenged the Virginia State Air Pollution Control Board's repeal of a 2020 statute compelling the state to participate in a program like the Regional Greenhouse Gas Initiative. 

"Executive agencies created by statute derive their powers from statute," Lowe wrote. "Neither the RGGI Act nor any other statute grants respondents the authority to repeal the RGGI regulation, and therefore the complained-of agency action is not in compliance with the statutory authority."

Governor Glenn Youngkin issued an executive order initiating the state's removal shortly after he arrived at the governor's mansion in 2022, leading to the air board's withdrawal on a 4-3 vote in December 2023. Youngkin and other Republicans criticized the multistate program, claiming it raised consumers' electricity bills with little return. 

"We respectfully disagree with the judge's decision and will pursue an appeal. Governor Youngkin remains committed to lowering the cost of living for Virginians by continuing to oppose the Regional Greenhouse Gas Initiative, which fails to effectively incentivize emission reductions in the Commonwealth," Youngkin's Press Secretary Christian Martinez said in a statement. "Instead, it functions as a regressive tax, hidden in utility bills, passed on to all Virginians."

Lowe found only the General Assembly, controlled by Democrats, has the power to repeal the legislation it passed. 

"Today's decision saves hardworking Virginians money by ensuring the resources generated by RGGI are used to protect our communities," Speaker of the House of Delegates Don Scott said in a statement. "Governor Youngkin's reckless attempt to undermine this critical program has been rightfully stopped, and we remain committed to building an affordable and more sustainable future for all."

The initiative has 11 member states from the mid-Atlantic to New England, including New York, Maryland and Maine. The program aims to reduce carbon dioxide pollution by establishing a regional cap on the amount of carbon dioxide pollution that power plants can emit by issuing a limited number of allowances. Allowances can be bought and sold in a regional auction, and the number of available allowances is reduced over time to reduce pollution.

Before the state's exit, around half of the auction proceeds went to flood prevention, and the other half went to energy-efficient affordable housing. The state's power plant emissions dropped by more than 22%, and it received $872 million during its time in the initiative. 

"The court's decision is a resounding victory for Virginia's families,"  House Democratic Leader Charniele Herring said in a statement. "I was proud to carry this bill in 2020 and since then the RGGI program has helped protect countless Virginians from recurrent flooding, lowered energy bills through low-income energy efficiency programs, and fortified our communities against extreme weather events. We are proud to stand with every Virginian who benefits from this initiative and will continue fighting to ensure these protections remain intact."

The plaintiffs, represented by the Southern Environmental Law Center, are an association of weatherization professionals whose mission is to provide, promote and advocate for energy conservation matters. 

"All along we knew that the actions taken by the Air Board and DEQ were wrong," former association executive director Billy Weitzenfeld said in a statement. "This is a win for communities across Virginia who have benefited from the state's participation in RGGI in the past and those that now will have a chance to continue to see those benefits."

The state argued the association lacked standing to challenge the agency's action, but Lowe disagreed. The association is funded purely through the initiative's revenue. 

"The loss of the funding is an existential threat to petitioner's members," Lowe said. 

The Democrats in the General Assembly compromised with Youngkin to leave out language requiring Virginia to rejoin the initiative in last spring's budget negotiations. Youngkin, for his part, gave up tax relief efforts. 

Youngkin announced in June that the state would no longer follow California's electric vehicle mandate. Washington, D.C. and 15 states, including North Carolina and Pennsylvania, follow California's mandate, which requires 35% of new cars sold in the model year 2026 to be electric vehicles, with a 100% electric vehicle mandate by 2035 for all new light-duty vehicles purchased.  

Virginia conservation advocates celebrated Lowe's ruling. 

"Virginia's membership in RGGI gave the Commonwealth a critical tool to combat the climate crisis, hold polluters accountable, protect communities against flooding and extreme weather, and lower household energy costs," Michael Town, executive director of the Virginia League of Conservation Voters, said in a statement. "The Youngkin administration's illegal actions taking Virginia out of this program benefited no one except our state's biggest polluters."