Pennsylvania's Climate Policy Shift: Shapiro Exits RGGI Amid Budget Negotiations

In November 2025, Pennsylvania Governor Josh Shapiro (D) made a significant decision to withdraw the state from the Regional Greenhouse Gas Initiative (RGGI), a multistate cap-and-trade program aimed at reducing carbon emissions from power plants. This move came during a contentious budget negotiation period, where Shapiro faced pressure from Republican lawmakers who have long opposed RGGI. Pennsylvania was the only state that had not passed a budget at that time, complicating Shapiro's position.

The American Prospect

RGGI, established 14 years ago, involves ten Northeastern states implementing a cap-and-trade system to limit carbon emissions. The program has reportedly led to a 50% reduction in power emissions since 2005 and generated approximately $8.6 billion for local projects. However, following a 2023 court ruling deeming former Governor Tom Wolf's executive order to join RGGI unconstitutional, Shapiro's administration faced mounting pressure to exit the initiative.

The American Prospect

Shapiro's decision has drawn criticism from various environmental groups, including the Conservation Voters of Pennsylvania, which had previously supported his candidacy. Molly Parzen, the group's executive director, expressed disappointment over Shapiro's capitulation, highlighting the ongoing Republican opposition to RGGI without proposing viable alternatives. In contrast, Virginia's incoming Governor Abigail Spanberger (D) has pledged to rejoin RGGI, capitalizing on her party's majority in the state legislature.

The American Prospect

Critics argue that Shapiro's exit from RGGI undermines Pennsylvania's climate goals. State Senator Nikil Saval (D-Philadelphia) noted that Republican obstruction has historically hindered efforts to curb pollution and promote clean energy. Environmental advocates have pointed out that Pennsylvania, which derives only 3% of its energy from renewable sources, risks falling further behind in climate action. The Acadia Center estimated that the state has lost over $5 billion in potential RGGI revenues since 2022.

The American Prospect

While Shapiro maintains a 60% approval rating in Pennsylvania, his decision regarding RGGI may complicate his political future, particularly as he eyes a potential presidential run in 2026. Critics within his party suggest that his record on energy and the environment could alienate key Democratic voters, especially younger constituents who prioritize climate action.

The American Prospect

As Shapiro pivots towards alternative proposals like the Pennsylvania Climate Emissions Reduction Act (PACER), which aims to address emissions without RGGI, the effectiveness of these initiatives remains to be seen. Meanwhile, Spanberger's commitment to rejoining RGGI will test her ability to deliver on climate and affordability promises in Virginia, setting the stage for a broader regional debate on climate policy.

The American Prospect

“Every effort to do any of these things, Republicans have obstructed,” — Nikil Saval, Pennsylvania State Senator

The American Prospect

“It was, while maybe not surprising, very disappointing and frustrating, that it was a trade that our allies in the governor’s administration and in the state House were willing to make,” — Molly Parzen, Executive Director of Conservation Voters of Pennsylvania

The American Prospect

“When we were in RGGI, our emissions dropped by 22 percent, basically because we had put a price on carbon, which reflects the harms that carbon and the associated air pollution is causing.” — Nate Benforado, Senior Attorney at the Southern Environmental Law Center

The American Prospect

“If Spanberger can thread that needle, her climate cred will skyrocket.” — Political Commentator

The American Prospect