Earlier this year, in response to concerns over energy affordability and slow progress on infrastructure, New York rolled back its ambitious climate action plans by amending the Climate Leadership and Community Protection Act of 2019.
These amendments achieved two important goals:
- First, they modified interim statewide greenhouse gas emissions limits and compliance deadlines, which, following the changes, are now set at 60% of 1990 emissions by 2040. The ultimate 85% reduction target by 2050 remains unchanged.
- Second, they changed the accounting methodology for measuring reductions to harmonize with a more conventional and widespread approach. That change encourages cross-border collaboration while making ultimate compliance less burdensome.
In recognition of market constraints and external political forces, the Westchester County Association, long a proponent of New York’s clean energy transition, actively advocated for both legislative fixes. The amendments also introduced a safety valve by requiring the state Department of Environmental Conservation to issue regulations to meet the 2040 emissions limits “to the maximum extent feasible and cost-effective.” This new language will help the state legislature
avoid another uncomfortable debate if progress is piecemeal or fails to materialize.
The aforementioned progress will largely consist of a cap and invest trading program. To meet the newly modified emissions reductions targets, the Climate Act now requires the DEC to design this economy-wide GHG emissions reduction program by the end of 2028. In an era of extended inflationary pressure and a recreant federal retreat on climate action, this will not be easy. Businesses seek both clear and predictable rules and flexible paths to compliance. Consumers need affordability protections. Environmentalists, suspicious of further retrenchment, demand a firm pathway to reductions. Justice advocates will prioritize disadvantaged communities and job readiness programs to minimize the impacts of worker displacement.
What New York's cap and invest program must include
New York is not starting from square one. The state already participates in the Regional Greenhouse Gas Initiative, or RGGI, a multi-state carbon market covering emissions from the power sector. According to NYSERDA, RGGI has reinvested billions in auction proceeds which are expected to save ratepayers four times invested dollars. However, if New York wants to minimize economic disruption during its clean energy transition, the following elements are central to a cap and invest program:
- First, provide generous front-end emissions allowances for energy intensive industries that are key to the state economy and hard to decarbonize. In Westchester, those industries include healthcare, life science and chemical manufacturing, and real estate construction. Prioritize, in particular, trade exposed sectors that would have difficulty competing with out of state businesses or could easily set up shop elsewhere.
- Second, ensure that substantial system proceeds are reinvested back into sustainability initiatives that focus on infrastructure such as building retrofits, vehicle electrification, solar arrays, and local battery storage and grid improvements. Current opportunities include expanding the NYSIF’s Climate Action Pilot Program for hospitals and healthcare facilities and NYSERDA’s industry agnostic NY Green Bank and FlexTech programs.
- Third, build in flexibility by allowing banking and trading of emissions reductions over multiple years within the compliance period while also seeking structural integration and accounting alignment with other emerging carbon markets.
- Lastly, commit.
The state first announced plans for cap-and-invest in early 2023, and key decisions governing allocations, auctions, and conformity remain unfinished. Meetings paused during last session’s energy debate have not yet restarted. Gov. Kathy Hochul has now received the added breathing room necessary to set the rules. Cap-and-invest provides the clearest path forward under the Climate Act. But only if New York moves past debate to design and implementation.
Michael N. Romita is president and CEO of the Westchester County Association.
This article originally appeared on Rockland/Westchester Journal News: NY amended its climate act. This change must come next | Opinion
