New York State Environmental Regulator Issues Draft Plan to Achieve GHG Emissions-Reduction Goals
On Dec. 20, 2021, the New York State Climate Action Council (Council) voted unanimously to approve the most recent draft of the scoping plan, a roadmap to achieve compliance with the state’s landmark climate law, the Climate Leadership and Community Protection Act (CLCPA). Enacted in 2019, the CLCPA transformed the state’s earlier clean energy standard efforts from administrative fiat to law and sets more aggressive goals to reduce statewide greenhouse gas (GHG) emissions economy-wide to 60% from a 1990 baseline by 2030, and 15% from a 1990 baseline by 2050. The CLCPA also established renewable procurement mandates: 70% renewable energy by 2030, 9,000 MW of offshore wind by 2035, 3,000 MW of energy storage by 2030, and 6,000 MW of solar by 2025.
The Council’s release of the draft scoping plan represents a significant milestone in the state’s 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 CLCPA established the Council, a 22-member committee tasked with determining how to meet these statutory goals. The Council also established and consulted with sector-specific advisory panels and working groups to address carbon emissions in areas such as transportation, solid waste, and energy generation. By preparing and releasing the scoping plan outlining policy proposals to achieve the stated emissions reduction mandates, the Council has satisfied a critical obligation under the CLCPA and laid the foundation for state climate policy development.
An important requirement of the CLCPA is the statutory commitment to invest in communities that have been disproportionately impacted by climate change. To meet this requirement, the CLCPA established the Climate Justice Working Group to establish the final criteria for identifying disadvantaged communities based on environmental burdens and demographic factors, such as race and socioeconomic status. Draft criteria are also expected to be released soon, with a 120-day comment period prior to final adoption. The final criteria will serve as a guidepost for state climate investments; at a minimum, disadvantaged communities must receive no less than 35% of the overall benefits of spending on clean energy.
The draft approved by the Council lays out a multi-year vision for a decarbonized New York and describes several sector-specific strategies that could be adopted based on guidance from the advisory panels, the Climate Justice Working Group, and the Just Transition Working Group (established to advise on workforce issues as the state transitions to a reduced carbon future). Throughout the Council’s deliberations, and as reflected in the draft plan, several key themes emerged, including:
Climate-specific action will be required across all sectors, requiring significant investments, especially considering the GHG accounting methodology established by the CLCPA.
Sector-wide energy efficiency and electrification will play a critical role in meeting emissions reduction benchmarks. For example, the integration analysis (aka cost/benefit analysis) conducted pursuant to the CLCPA envisions zero-emission vehicles and heat pumps dominating the market by the end of the 2020s. As such, consumer awareness and decision-making will be a significant factor in attaining GHG emissions reduction benchmarks.
Wind, water, and solar will be the primary source of power generation across all sectors of New York’s economy by 2050, necessitating investments in firm, zero-carbon resources and energy storage resources to ensure grid reliability.
Low carbon fuels such as renewable natural gas, biofuels, and hydrogen should be utilized strategically in sectors that are more challenging to electrify, such as medium- and heavy-duty transportation and industrial applications.
The cost of inaction exceeds the cost of implementing the suite of options set forth in the draft plan by at least $90 billion when factoring in public health impacts and economic costs associated with climate change.
One key item up for discussion in 2022 is the adoption of economy-wide mechanisms to curtail emissions and fund the programs and initiatives identified in the scoping plan, such as a carbon tax/fee, cap-and-invest program, and clean energy supply standard. In evaluating the viability of these proposals, the Council will face the challenge of funding decarbonization across all sectors, while avoiding regressive impacts on consumers, leakage (diverting GHG emissions outside the state), and the creation of “hotspots” in disadvantaged communities.
The Council is expected to release the draft scoping plan for public comment by the end of 2021, subject to a minimum 120-day comment period, with six public hearings to be scheduled across the state, though the evolving nature of the pandemic may necessitate virtual hearings. The final plan must be sent to the Legislature by Jan. 1, 2023. The CLCPA requires the NYS Department of Environmental Conservation to enforce emissions targets through the adoption of regulations consistent with the final scoping plan, which must be promulgated by Jan. 1, 2024.
The draft scoping plan is likely to spur a significant amount of interest and comments from various stakeholders. Citing to a number of studies completed since the Clean Energy Standard program was implemented in 2016 and the CLCPA was enacted in 2019, the energy generation sector will likely emphasize the need to ensure system reliability and press for a realistic plan for energy storage and dispatchable resources to effectively complement renewable generation. Based on study results to date, some energy developers may assert that energy storage resources alone are unlikely to be sufficient to address anything other than short-term reliability issues when the intermittent nature of renewable generation could drive longer-term needs particularly during wind lull and cloudy periods, which can extend for days. To date, the Council and environmental groups have opposed using green hydrogen – hydrogen made from zero GHG emission energy – as a longer-term combustible energy source for the electricity generation sector. Some assumptions in the draft plan, such as the speed that consumers will convert to driving electric vehicles and operating heat pumps, also may be questioned. Finally, there is no ready agreement on adopting a low carbon fuel charge, a fact exacerbated by an inherent tension between incentivizing the use of zero-emission and low-carbon fuels and avoiding significant financial impacts on consumers. The draft plan will likely change after the public process is complete, culminating in regulatory action to enact the final plan by 2024. While the details of the plan remain a work in progress, it is clear that the final scoping plan and the policies that follow will have significant long-term impacts on the energy sector in New York.