Governor Josh Shapiro pulled Pennsylvania out of the Regional Greenhouse Gas Initiative last month to secure passage of the state's delayed budget. The move, aimed at appeasing Republican lawmakers, has drawn criticism from Democrats and environmental groups who see it as a major concession on climate policy. Shapiro promises to pursue alternative clean energy initiatives.
Pennsylvania, with its significant power sector emissions exceeding those of all other RGGI states combined, joined the Regional Greenhouse Gas Initiative in 2022 through an executive action by then-governor Tom Wolf. However, Republican opposition led to legal challenges: a 2022 court order blocked formal participation, and in 2023, the Commonwealth Court deemed the action unconstitutional. The case was pending before the state Supreme Court, where Democrats maintained their majority in recent elections, when Shapiro announced the withdrawal in November 2025.
The RGGI program auctions carbon emission allowances from power plants, with proceeds funding clean energy and affordability efforts while gradually tightening the emissions cap. To date, it has generated $8.6 billion for member states including Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Delaware, and the District of Columbia.
Shapiro signed the withdrawal bill as part of a compromise to end a budget stalemate that began in June 2025, forcing schools and public transit to borrow funds. "State Republicans have used RGGI as an excuse to stall substantive conversations about energy," he stated. "Today, that excuse is gone. It’s time to look forward—and I’m going to be aggressive about pushing for policies that create more jobs in the energy sector, bring more clean energy onto the grid, and reduce the cost of energy for Pennsylvanians."
Critics argue the deal favors Republicans without substantial gains. Democratic state senator Nikil Saval called it "Faustian, except Faust got so much more out of his bargain with the devil." Jackson Morris of the Natural Resources Defense Council said Democrats "basically got rolled," noting the lost opportunity for an environmental win amid Shapiro's rumored presidential ambitions. "We were about to have the answer from the court. And now we never will, because they gave up," Morris added.
Patrick McDonnell of PennFuture likened it to fumbling a football on the one-yard line and running it the wrong way. In contrast, Dallas Burtraw of Resources for the Future sees potential in Shapiro's early 2025 "Lightning Plan," which proposes the Pennsylvania Climate Emissions Reduction program (PACER), a state-specific cap-and-trade system potentially linkable to RGGI. "It would have been amazing to see Pennsylvania join RGGI," Burtraw said, "but I think that we might be setting down a pathway that’s turned out for the better."
Saval remains skeptical, stating, "Pennsylvanians need and deserve serious plans to curb greenhouse gas emissions, lower energy bills, and deliver revenue. So far, senate Republicans have shown little interest in even meager efforts to do any of this." Meanwhile, Virginia plans to rejoin RGGI under incoming Democratic governor Abigail Spanberger.