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Hundreds of millions of dollars in environmental funds on state budget negotiating table

Jahd Khalil

The absence of hundreds of millions of dollars from the Regional Greenhouse Gas Initiative (RGGI) is just one of the major differences between the Republican-led House Budget and the budget proposed by the State Senate, which is controlled by Democrats.

House Republicans seemed to be counting on the Regional Greenhouse Gas Initiative being repealed. They didn’t include the revenue it brings in when they wrote their version of the state budget.

RGGI brings in cash from auctions of carbon licenses, which function as permission to pollute a certain amount: over time the amount of licenses decreases. Former Governor Ralph Northam budgeted for about $371 million in proceeds from the auctions over two years, according to the budget he proposed as he left office.

Nate Benforado, an attorney with the Southern Environmental Law Center said that money helps Virginians on the front lines of climate change.

"About half of the program revenues are dedicated to helping low income families reduce energy," he said, pointing to weatherization dollars to reduce energy bills, and also funding new energy-efficient affordable housing.

"Virginia has a huge shortage of affordable housing units. And thanks to RGGI, a lot of these new units are going to come with lower energy bills."

This portion of the Republican budget proposal removes removes $95 million from the Department of Housing and Community Development a year.

45% of the carbon allowance auctions go to the Virginia Community Flood Preparedness Fund, which has funded dozens of projects of planning to mitigate flooding in two rounds of grant applications.

"Virginia has never had dedicated state funding to let localities figure out how to deal with recurrent flooding, which is being experienced all over the state." said Benforado. "It's not just coastal communities that are experiencing it as inland communities."

A third round of grant applications for flood projects funded by RGGI concludes Friday.

This reduction in the budget was $85 million a year.

The Senate version of the budget included the RGGI funds. But right now Democratic Senators are in negotiations with House Republicans who would’ve preferred Virginia leave RGGI. Governor Glenn Youngkin wants out too, and has instructed the Department of Environmental Quality to being push towards leaving RGGI, and to author a report on the program.

"This report reveals that RGGI is in reality a carbon tax passed on to families, individuals and businesses throughout the Commonwealth—it’s a bad deal for Virginians," said Youngkin in a press release as he published the report he commissioned.

Republican attempts to take Virginia out of RGGI through legislation failed once the Senate had to take up the measure.

Keeping that money unspent would be another way to weaken the program, and Governor Youngkin proposed a budget amendment that attempts to prevent the money from being spent.

Benforado says that’s a bad idea. "Virginia's participation in RGGI was the product of years of stakeholder work, public involvement, rule-making by the agency... and to sort of unwind it in this whiplash fashion without a lot of public involvement is troubling."

A spokesperson for the Republicans in the House of Delegates didn’t respond to a request for comment on Republican plans for the unused RGGI funds.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.

Updated: April 6, 2022 at 4:49 PM EDT
Editor's Note: The Southern Environmental Law Center is a financial supporter of Radio IQ.
Jahd Khalil is a reporter and producer in Richmond.
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  • Governor-elect Glenn Youngkin has announced that he will undo part of Virginia’s Clean Energy Act – pulling us out of an 11-state partnership designed to lower pollution from coal and gas-burning power plants. Environmentalists may challenge his right to do that. And there’s an economic argument that could keep the Commonwealth from leaving the Regional Greenhouse Gas Initiative.
  • Republicans want a divorce from the Regional Greenhouse Gas Initiative. That's the multi-state compact that Virginia joined when Democrats were in power. It's designed to reduce carbon emissions, although Republican Delegate Nick Freitas of Culpeper says RGGI locks Virginia into decisions made in other states.