New York's cap-and-trade proposal threatens state's climate goals
Gov. Kathy Hochul’s administration is shying away from higher potential consumer costs for a planned cap-and-trade style program to accomplish New York’s emissions reduction targets.
The state is considering a limit on the cost for carbon emissions allowances far lower than what’s been experienced recently in other markets. It’s the latest effort by the state to limit expenses on New Yorkers as the state tries to meet its pollution reduction goals. A low price ceiling, if enshrined in the final cap-and-invest program, would mean New York would not hit its emissions goals without significant additional state or federal policies, according to NYSERDA’s analysis.
Environmental advocates are alarmed by the state’s direction so far, urging Hochul to seek the full potential of the program envisioned in its climate plan. Under a cap-and-invest program, large polluters — including manufacturers, fuel wholesalers, gas utilities and others — would be required to purchase allowances to match their emissions. Typically, a limited amount of allowances would be sold through an auction, and the number would drop each year to match the state’s goal to slash emissions 40 percent from 1990 levels by 2030 and 85 percent by 2050.
But the state has proposed a “price ceiling” above which the cost of allowances would not rise. At the prices analyzed, additional pollution allowances — well above the state’s statutory emissions limits — would be sold to control cost impacts on consumers. But it could also mean the state doesn’t hit its goals.