RICHMOND, Va. (WRIC)- Governor Glenn Youngkin wants to pull Virginia out of an agreement to combat climate change, despite backlash from environmental advocates.

A new report, ordered by one of Youngkin’s first executive actions, makes the case for withdrawing from the Regional Greenhouse Gas Initiative (RGGI) and initiates the process to do so.

Here’s what Virginians need to know.

What is the Regional Greenhouse Gas Initiative?

The Regional Greenhouse Gas Initiative is a cooperation between eleven states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia –to reduce carbon dioxide emissions that harm the environment.

The agreement created a carbon market with a maximum regional limit. Energy producers have to buy allowances based on emissions. In Virginia, those proceeds go back to climate mitigation and resilience programs.

Following General Assembly approval, Virginia formally adopted the trading program on July 10, 2020 but the state didn’t begin fully participating in RGGI until Jan. 1, 2021.

Why does Governor Youngkin want out?

A new report from Virginia’s new Department of Environmental Quality Director Michael Rolband argues participating in RGGI has led to higher energy bills without the intended benefits.

The report says compliance costs will increase a typical residential customer’s bill by $2.39 per month, and a typical industrial customer bill by $1,554 per month.

“It is a carbon tax that has been passed through to every consumer. It’s driving up our cost of living even further at a time where we see our cost of living going through the roof,” Youngkin said when asked about his plans to withdraw.

The report makes the case that customers often have no option to avoid rate increases under energy monopolies like Dominion Energy. Since those producers can pass costs onto customers, Rolband said the initiative lacks incentive for power generators to actually reduce emissions.

“RGGI is a bad construct that taxes consumers without providing incentives for change to the electricity producers,” the report said.

What do environmental advocates say?

Narissa Turner, a clean energy and climate policy manager for the Virginia Conservation Network, said pulling out of the agreement will hurt Virginia’s climate change response at a time when action is urgently needed.

In some states, proceeds from RGGI auctions are returned to consumers through rebates, according to the report. In Virginia, the money goes back to grants for local flood preparedness and energy efficiency in low income homes.

Turner said the approach helps Virginia combat climate change from multiple angles.

“Climate change is going to keep costing us regardless and so at the very least, if it’s going to cost us, we should be putting money towards programs that are going to help protect us and shield us from some of those effects and also mitigate some of those effects,” Turner said.

Turner also contested the report’s conclusion that RGGI’s framework doesn’t incentivize a reduction in carbon emissions. She said states that have been participating longer than Virginia have started to see positive trends.

The report also acknowledges that, “there insufficient data to determine the impact of the trading rule and RGGI in reducing CO2 emissions, since 2021 has been the first year of Virginia’s participation in the program.”

“Yet the governor still seems intent on destroying this program that is very good for Virginians,” Turner said. “It’s just really disappointing.”

How would Youngkin replace lost funding?

If Youngkin successfully pulls Virginia out of RGGI, it’s not entirely clear how he would replace lost revenue currently going towards flood preparedness and energy efficiency.

Senator Richard Stuart (R-King George), who introduced a failed bill to withdraw from RGGI during the 2022 session, called the grant programs “worthy goals” during a previous interview.

“But there are other ways to get that money to help those folks. Actually, we’ve got more money this year than ever since I’ve been in the General Assembly, and we don’t need to place arbitrary taxes on ratepayers to do that,” Stuart said.

Youngkin has called resiliency a priority. An aide said the administration is in the process of assessing current and potential funding opportunities to ensure continued and new investments. No specific funding stream has been identified.

How can Youngkin withdraw without General Assembly approval?

Governor Youngkin has been accused of backtracking on his plans to withdraw from RGGI using executive action alone after some argued that wasn’t allowed.

The report released this week drafts emergency regulations to initiate the process.

“The report that was released this week was step one and then we’ll move through a regulatory process and we’re going to pull Virginia out,” Youngkin said.

If approved, the report notes that all emergency regulations are limited to no more than 18 months. It says the Governor can then act to extend them but for no longer than six months.

The temporary solution to the campaign promise may be Youngkin’s best remaining option after a legislative push to pull out of RGGI failed earlier this year in the General Assembly.

“The attempted rollbacks would have thrown away years of collaboration, and endangered Virginia’s future ability to defend our natural environment from the threats of global warming and sea level rise,” said Senate Democratic Caucus Chair Mamie Locke in a statement after a committee killed the bill.

Senator Stuart believes Youngkin still has options to achieve his goal but he acknowledged the legislative approach would’ve been more permanent.

“I want to remove that possibility for any governor,” Stuart said in an interview before the bill was shot down.

Youngkin’s legislative agenda also included a budget amendment to begin the process of withdrawing from RGGI.

However, Garren Shipley, a spokesperson for the House Republican Caucus, said that language was not included in the House’s final budget proposal. Negotiations over the two-year spending plan continue ahead of a special session.

“It’s a bad idea to ‘legislate’ in the budget, and we try not to do it,” Shipley said in a text.