Vice President Kamala Harris and Pennsylvania Governor Josh Shapiro (L) speak to the press while … [+] making a stop at the Reading Terminal Market in Philadelphia, Pennsylvania, July 13, 2024. (Photo by RYAN COLLERD / AFP) (Photo by RYAN COLLERD/AFP via Getty Images)
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Pennsylvania Governor Josh Shapiro’s (D) name has been floated as a potential vice presidential pick for Kamala Harris. Aside from the political skills Shapiro would bring to the ticket, he also has an energy policy record that is complementary to Harris’s.
Vice President Kamala Harris has stated on numerous occasions that she supports the imposition of a federal carbon tax. Governor Shapiro, meanwhile, is pushing new taxes and regulations at the state level that would also drive up the cost of energy by design.
In fact, Governor Shapiro is taking legal action right now, at Pennsylvania taxpayer expense, in an effort to impose a cap-and-trade regime in Pennsylvania that would, like the federal carbon tax Harris has voiced support for, drive up utility bills. Governor Shapiro’s effort to impose cap-and-trade, which a judge ruled to be a new tax at the end of 2023, began under Shapiro’s predecessor Tom Wolf (D) when he issued an executive order in 2022 entering Pennsylvania into the Regional Greenhouse Gas Initiative (RGGI), a nearly 20 year old regional cap-and-trade program that a number of northeastern states are party to.
A judge struck down Wolf’s action at the end of 2023, ruling it to be an illegal institution of a new tax without the necessary legislative approval. “Stated simply, to pass constitutional muster, the Commonwealth’s participation in RGGI may only be achieved through legislation duly enacted by the Pennsylvania General Assembly,” Judge Michael Wojcik wrote in his opinion issued last November.
Shapiro is now appealing that decision. Not only has Shapiro not received the legislative approval that Judge Wojcik says is required to impose a new tax in accordance with the Pennsylvania Constitution, neither Shapiro nor Wolf ever sought support from state lawmakers. The reason legislative approval hasn’t been sought to join RGGI, many believe, is that both Shapiro and Wolf knew they couldn’t get it on account of opposition from both Democrats and Republicans.
“A bipartisan majority of Pennsylvania legislators have consistently voted against RGGI when the issue has been brought to the floor,” Pennsylvania Senator Gene Yaw (R) pointed out after the November ruling. Despite clear bipartisan opposition to RGGI in Harrisburg and despite the court’s ruling that it can’t be instituted by executive action, Shapiro is pressing forward with an appeal.
“Right before Thanksgiving, Shapiro proclaimed his desire to fight for the unilateral authority to raise electricity taxes,” Commonwealth Foundation senior vice president Nathan Benefield said after Shapiro announced his decision to appeal Judge Wojcik’s ruling. “It’s a move that could burden Pennsylvanians with higher taxes and electricity bills and undermine the reliability of our electrical grid.”
“RGGI represents an unconstitutional energy tax imposed by executive fiat,” Benefield added. “It is disheartening to see Shapiro embrace his predecessor’s radical policies and ignore his previously stated concerns with RGGI’s process and consumer costs. If implemented, RGGI would strip nearly $800 million from the private sector for government redistribution while increasing electric bills for businesses and homeowners by a staggering 30%.”
Kamala Harris’s home state of California has a single-state cap-and-trade program. Studies estimate that cap-and-trade, along with other taxes and regulations, drives up the price of gas in California by $1.26 per gallon. Earlier this year Governor Shapiro proposed legislation, the Pennsylvania Climate Emissions Reduction Act (PACER), to create Pennsylvania’s own cap-and-trade program as an alternative to joining RGGI. That proposal has been dismissed by legislators for the same reasons they reject RGGI.
“Our Commonwealth needs to be focused on unleashing our energy potential, not taxing it,” Pennsylvania Senate President Kim Ward (R) said in response to Shapiro’s proposal. “Doing so would create thousands of good jobs and keep our power grid secure. Shapiro’s carbon tax appears to be more aligned with states like California and Washington, who suffer from rolling blackouts and higher energy prices.”
The new renewable energy mandate proposed by Governor Shapiro earlier this year has also been panned by legislators and industry representatives. Carl Marrara, executive director of the Pennsylvania Manufacturers Association, wrote that Governor Shapiro’s proposed renewable energy mandate “would overthrow Pennsylvania’s competitive electricity market by forcing utilities to buy 50% of their electricity from government-chosen energy sources by 2035 in contrast to today’s 18%.
There is resistance to a federal carbon tax for the same reasons there is bipartisan opposition in Pennsylvania to cap-and-trade: both proposals would drive up energy costs by design. Vance Ginn, an economist who previously served as the associate director for economic policy at the White House’s Office of Management and Budget, explained in a recent article published by the American Institute for Economic Research how a carbon tax would disproportionately harm low income households and hit some industries harder than others.
“For example, in the US, the construction sector alone accounts for about 40% of carbon emissions,” Ginn points out. “A carbon tax would heavily penalize this industry, reducing its capacity to grow, generate new housing, and create jobs. Moreover, implementing a carbon tax involves massive administrative costs. The federal tax code is already complex and costly; a carbon tax would exacerbate these issues.”
“Determining net carbon emissions is a nuanced process subject to ever-changing and arbitrary federal definitions, increasing compliance costs for businesses and consumers,” Ginn added. “A study by the Tax Foundation found that a carbon tax would cost billions of dollars annually in administrative costs, a burden that would ultimately fall on consumers through higher prices, less economic activity, and fewer jobs.”
If Vice President Harris becomes the Democratic nominee for president, as now appears to be the most likely outcome, expect her support for a national carbon tax to become a topic of discussion through November, particularly in presidential and senate battleground states like Pennsylvania, Nevada, Wisconsin, Arizona, Michigan, and Georgia. If Shapiro becomes the vice presidential nominee this fall, his ongoing effort to impose cap-and-trade, and do so by executive fiat over bipartisan objections from state representatives, is something that will likely be mentioned in conjunction with Harris’s stated support for a national carbon tax. Should Democrats nominate a Harris-Shapiro ticket to go up against Trump-Vance this fall, it is likely to further elevate energy policy as a topic of discussion on the campaign trail.
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