State high court should confirm unconstitutionality of Regional Greenhouse Gas Initiative [column]

The Pennsylvania Supreme Court will hear oral arguments Tuesday on Pennsylvania’s controversial and unconstitutional membership in the Regional Greenhouse Gas Initiative.

This multistate cap-and-trade program — illegally joined, in our view, by former Gov. Tom Wolf — seeks to impose an economywide tax on power plants for each ton of carbon dioxide emitted annually. Carbon tax proponents claim it will curb emissions. Yet, without Regional Greenhouse Gas Initiative assistance, Pennsylvania has already successfully cut more emissions than any of the 10 other states participating in the initiative.

Simply put, we believe the Regional Greenhouse Gas Initiative is unconstitutional. The Pennsylvania constitution explicitly authorizes only the General Assembly to issue and collect taxes, providing the Legislature with its exclusive power of the purse. For a tax to be constitutional, the General Assembly must first approve it. Neither the governor nor state agencies can unilaterally enact and impose a tax. If the Pennsylvania Supreme Court reverses the lower court’s decision, Pennsylvania would be the only state among the participating states in the Regional Greenhouse Gas Initiative to join via executive action, not by legislative consensus.

The initiative’s legality centers on the difference between taxes and fees. Lawful government fees cover only the regulatory costs they support.

However, Regional Greenhouse Gas Initiative proceeds exceed the legal limitation of a fee. Only 6% of initiative revenue would cover “programmatic costs related to administration,” according to the original proposal by Pennsylvania’s Department of Environmental Protection.

The proceeds from this tax would be astronomical. Initial estimates projected more than $1.2 billion in new revenue for the Department of Environmental Protection — a fivefold increase in the money allocated to the agency in the 2024–25 budget. This fiscal boondoggle would amount to a multimillion-dollar slush fund for the Department of Environmental Protection and the governor, allowing both to spend freely with minimal oversight.

The Commonwealth Court unequivocally concluded that the Regional Greenhouse Gas Initiative imposes a tax, not a fee.

Pennsylvania Supreme Court precedent agrees. In 1947, the Pennsylvania Supreme Court declared in Flynn v. Horst: “No principle is more firmly established in the law of Pennsylvania than the principle that a revenue tax cannot be constitutionally imposed upon a business under the guise of a police regulation, and that if the amount of a ‘license fee’ is grossly disproportionate to the sum required to pay the cost of the due regulation of the business the ‘license fee’ act will be struck down.” (Italics added.)

The Pennsylvania Supreme Court must follow this precedent and hold the Regional Greenhouse Gas Initiative as an unconstitutional tax.

Gov. Josh Shapiro could have righted this wrong by not appealing the Commonwealth Court’s decision. Instead of siding with the state constitution and the people of Pennsylvania, the governor embraced his predecessor’s punitive policies and unconstitutional actions.

Interestingly, the governor’s motivation in challenging the ruling has little to do with protecting the environment. Even Shapiro wasn’t convinced that the Regional Greenhouse Gas Initiative presented meaningful environmental reform. During his campaign for governor, Shapiro opposed the initiative, stating that it didn’t constitute “real action.”

Instead, Shapiro is more interested in maximizing his power as governor, stating the appeal is “limited to questions of executive authority.” “(Our) Administration must appeal in order to protect that important authority for this Administration and all future governors,” the Shapiro administration said in a statement.

Yet, this authority would set a dangerous precedent, encouraging Shapiro and other future governors to ignore the Legislature and pursue more unilateral actions.

Shapiro also admitted his appeal is about political leverage. He has proposed his own version of the Regional Greenhouse Gas Initiative: the Pennsylvania Climate Emissions Reduction Act (PACER). “The quickest way out of RGGI is to pass my plan,” said Shapiro. Truthfully, the fastest way out of the Regional Greenhouse Gas Initiative would be for the governor to withdraw his appeal.

The Regional Greenhouse Gas Initiative has already proven costly for the commonwealth. In 2024, Spotlight PA reported that the legal costs for the Regional Greenhouse Gas Initiative totaled $4.2 million. This reporting dates back to last summer, meaning the price tag is likely even higher.

“(The) power to tax involves the power to destroy,” U.S. Supreme Court Justice John Marshall famously stated in the landmark decision McCulloch v. Maryland.

The Regional Greenhouse Gas Initiative carries the same destructive power. It empowers executive overreach and undermines the separation of powers — a bedrock of our republic. It also threatens Pennsylvanians with higher energy prices and crushing job losses statewide.

The good people of our great commonwealth deserve so much better. They deserve lawful and good government, a robust energy industry, good jobs and an affordable way of life.

The Regional Greenhouse Gas Initiative would undermine all of this.

The law couldn’t be clearer: Pennsylvania’s Regional Greenhouse Gas Initiative membership is unconstitutional. Ideally, the Pennsylvania Supreme Court will follow its precedent and uphold the Commonwealth Court’s ruling that the Pennsylvania executive branch overstepped its authority.

Meanwhile, Shapiro must refrain from excessive executive action. Instead, the governor should be working with the Legislature, not against it, to get things done for the people of Pennsylvania.

Megan Martin is the chief operating officer and general counsel of the Commonwealth Foundation, Pennsylvania’s free-market think tank.