Court Rules Against Virginia Governor Youngkin’s RGGI Withdrawal

A circuit court judge ruled that Virginia Governor Glenn Youngkin’s removal of the state from a carbon cap-and-trade program, the Regional Greenhouse Gas Initiative (RGGI), was unlawful and must be rescinded. The suit was brought by the Southern Environmental Law Center on behalf of the Association of Energy Conservation Professionals—environmental advocates who said the governor had overstepped his authority by negating a law passed by the General Assembly. Circuit Judge C. Randall Lowe wrote in his opinion, “The only body with the authority to repeal the RGGI Regulation would be the General Assembly. This is because a statute, the RGGI Act, requires the RGGI Regulation to exist.” Therefore, Judge Lowe wrote, the court “finds that the attempted repeal of the RGGI Regulation is unlawful, and thereby null and void.” Governor Youngkin plans to appeal.

The RGGI is a regional program involving 11 states—Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia—that trade carbon credits to help reduce carbon dioxide emissions. By implementing cap-and-trade systems, the program effectively adds a “carbon tax” to the price of fossil fuels, which in turn raises energy costs for residents in participating states. Virginia joined RGGI in 2020 through legislation passed by a Democrat-controlled General Assembly and signed into law by Democratic Governor Ralph Northam. However, in 2022, Governor Glenn Youngkin, upon taking office, vowed to pull Virginia out of the cap-and-trade market, citing the higher energy costs imposed on consumers by utilities purchasing carbon credits. Dominion Energy, Virginia’s largest utility provider, estimated that the program adds roughly $2.39 to the average monthly electricity bill for residents. These costs are expected to rise over time, as the core aim of the RGGI is to drive down carbon dioxide emissions in the participating states, inevitably leading to higher energy prices as the program evolves.

Youngkin had tried to exit the RGGI by executive order (Executive Order 9) but backed away as state lawmakers indicated that he could not undo a measure passed by the legislature. Youngkin then directed the State Air Pollution Control Board — four of whose seven members were Youngkin appointees — to withdraw Virginia from RGGI. In 2023, the board voted 4-3 for removal from the program, at which point the environmental groups filed suit. The program was not included in the 2024 budget, solidifying Virginia’s departure from the initiative.

A circuit judge in Fairfax County dismissed three of the original plaintiffs in the lawsuit, determining that they lacked legal standing because they were advocacy groups that had not suffered direct harm from the actions in question. However, the case was permitted to move forward with the fourth plaintiff, the Association of Energy Conservation Professionals, which used funds from the RGGI program to help weatherize homes in Virginia’s southwest region.  The case was then transferred to Floyd County, closer to the association’s base, where Judge Lowe ruled that the group did have standing to sue, as it had been directly impacted by the loss of funding. Environmental advocates argue that more than $800 million in proceeds from carbon auctions had been allocated to programs aimed at weatherizing homes, addressing rising flood risks, and providing financial assistance to low-income households struggling with higher energy costs due to RGGI.

The state contended that the law was not a mandate, pointing out that it used language to “authorize” the Department of Environmental Quality to participate in RGGI, suggesting that it was permissive rather than obligatory. However, Lowe ruled that prior cases have established that when the General Assembly enacts a law aimed at serving the public interest, such language is interpreted as “compulsory.” Furthermore, Lowe explained that the term “authorize” was used to grant the agency’s director new authority, enabling them to take action.

According to Youngkin spokesman Christian Martinez, “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. Instead, it functions as a regressive tax, hidden in utility bills passed on to all Virginians.”

In 2021, Virginia’s first year participating in the Regional Greenhouse Gas Initiative (RGGI), the state sold allowances totaling $227 million, a cost that was ultimately passed on to consumers by energy companies. Dominion Energy estimated that RGGI would lead to an additional $1 billion to $1.2 billion in costs for its customers over the next four years. Governor Youngkin’s Executive Order 9 highlights that Virginia allocates $46 million annually for energy assistance to help households that are unable to afford rising energy costs. The order argues that it is counterproductive for the state to engage in a program that drives up energy prices while so many Virginians already struggle with their utility bills. Increasing energy costs through RGGI would likely result in even higher demand for government energy assistance, further burdening families already facing financial strain.

Conclusion

A circuit court judge ruled against Virginia Governor Youngkin’s withdrawal from the RGGI—an interstate cap-and-trade program that adds a “carbon tax” to the price of energy from fossil fuels. Youngkin sees the tax as regressive, hurting lower-income families more than higher-income families as energy is a necessity to Americans’ way of life. The suit was filed by environmental advocates. Youngkin plans to appeal.