NY Issues Plans for GHG Emissions Reduction Goals

The New York State Climate Action Council voted unanimously to approve its most recent draft of a scoping plan. This is a roadmap for compliance with the state’s landmark climate law, Climate Leadership and Community Protection Act (CLCPA). In 2019, the CLCPA made clean energy standard efforts in the state more effective and removed administrative fiat from them. It also sets aggressive goals to reduce state greenhouse gas (GHG), emissions to 60% from a baseline in 1990 by 2030 and 15% from a baseline in 1990 by 2050. The CLCPA also established renewable procurement requirements: 70% renewable energy, 9,000 MW offshore wind by 2030, 3,000MW of energy storage and 6,000 MWs of solar by 2025.

The Councils release of the draft scoping plan represents a significant milestone in the states efforts to implement policies to reduce GHG emissions and achieve the 2040 zero GHG emission target that the CLCPA sets for the electricity-generating sector. The Council was established by the CLCPA. It is a 22-member body that has to determine how to achieve these statutory goals. The Council also consulted with sector-specific advisory groups and working group to address carbon emissions in areas like transportation, solid and energy generation. The Council fulfilled a critical obligation under CLCPA by preparing the scoping Plan outlining policy proposals to achieve the mandated emissions reductions. It also laid the foundation for state-level climate policy development.

The CLCPA’s statutory obligation to invest in communities most adversely affected by climate change is an important requirement. The CLCPA established Climate Justice Working Group in order to determine the final criteria for identifying disadvantaged community based on environmental burdens as well as demographic factors such race and socioeconomic status. Draft criteria will also be released soon. The criteria will be subject to 120-day comments before final adoption. The final criteria will be used as a guideline for state climate investments. At a minimum, disadvantaged communities should receive no less that 35% of the overall benefits from spending on clean energy.

The Council approved the draft. It contains a multiyear vision for New York. It also includes sector-specific strategies. This could be based on the guidance provided by the Climate Justice Working Group and Just Transition Working Group. These groups advise on workforce issues during the state’s transition to a low-carbon future. As reflected in the draft plan and the Council’s deliberations, there were several key themes that emerged from the discussions.

• Climate-specific action across all sectors is required. This will require significant investments, especially considering GHG accounting methods established by the CLCPA.

• Sector-wide energy efficiency, electrification, and other measures will be crucial in meeting emission reduction targets. According to the CLCPA, an integration analysis (aka cost/benefit assessment) was conducted. It showed that zero-emission heat pumps and vehicles will dominate the market by the 2020s. Consumer awareness and decision-making are key factors in achieving GHG emissions reduction benchmarks.

• By 2050, wind, water, and sun will be the primary sources of power generation in all New York’s sectors. This will require investments in firm, zero carbon resources and energy storage resources to ensure grid reliability.

• Low carbon fuels, such as biofuels, renewable natural gas and hydrogen, should be used strategically for sectors that are more difficult or impossible to electrify. These include medium- and heavy-duty transport and industrial applications.

• Inaction costs more than implementing the plan’s options by at least $90 trillion, when you take into account the public health consequences and economic costs of climate change.

The adoption of economic-wide mechanisms to curb emissions and fund programs and initiatives identified within the scoping plan (e.g., a carbon tax/fee or cap-and invest program) is one key item that will be up for discussion in 2022. The Council will be evaluating the viability and feasibility of these proposals. It will need to avoid regressive impacts on consumers, leakage, diverting GHG emissions from the state, and creating hotspots in disadvantaged areas.

The Council will release the draft scoping plan to the public for comment by the end 2021. There will be a minimum 120-day comment period. Six public hearings will be held across the state. However, due to the changing nature of the pandemic, virtual hearings may be necessary. The Legislature must receive the final plan no later than January 1, 2023. CLCPA directs the NYS Department of Environmental Conservation (NYS Department of Environmental Conservation) to enforce emission targets through the adoption of regulations compatible with the final scoping plans. These regulations must be promulgated no later than January 1, 2024.

The draft scoping document is likely to generate significant interest from stakeholders and encourage them to make comments. According to a variety of studies that have been completed since the Clean Energy Standard program was implemented back in 2016, and the CLCPA was adopted in 2019, the energy sector will likely stress the need for system reliability and push for a realistic plan to provide energy storage and dispatchable resources to complement renewable generation. Based on the results of studies to date, some energy developers might argue that energy storage resources alone may not be sufficient to address any other short-term reliability problems. The intermittent nature renewable generation could drive longer term needs, particularly during wind lulls and cloudy periods which can last for days. Green hydrogen hydrogen made of zero GHG emission energy has been rejected by the Council and other environmental groups as a longer-term combustible source of electricity generation. The draft plan may also be challenged on assumptions such as the speed consumers will switch to electric vehicles or operate heat pumps. The draft plan does not include a low carbon fuel tax. This is due to the tension between incentivizing zero-emission and low -carbon fuels, and avoiding any significant financial impact on consumers. After the public process is completed, the draft plan will likely be revised. The final plan will be enacted by regulatory action by 2024. Although the plan’s details are still being developed, it is clear that the final scoping report and the policies that will follow will have significant long-term effects on New York’s energy sector.