Environmentalists alarmed by push to ‘undermine’ New York’s climate law

ALBANY, N.Y. — Changing New York’s unique accounting method for greenhouse gas emissions has become an unexpected issue in state budget talks — sparking concern among environmental groups.

The proposal has support from the fossil fuel industry and would likely enable more combustion of natural gas and other fuels for longer than currently envisioned under New York’s climate law in a plan approved in December.

Gov. Kathy Hochul is supportive of the change, which was also proposed in a bill sponsored by Energy Committee Chair Sen. Kevin Parker on Monday, and it has come up in budget negotiations. Some other Senate Democrats are not supportive of the proposal.

“The 20-year methane accounting reflects the reality of the climate impact of burning natural gas,” said Sen. Liz Krueger (D-Manhattan), who chairs the powerful Senate Finance Committee, in a statement. “It is one of the strongest parts of the [state’s climate law]. Giving in to the polluter lobby by weakening our methane accounting will kneecap all our efforts going forward.”

New York is the one of only two jurisdictions to use a 20-year time horizon to account for the damaging effects of planet-warming gasses instead of 100 years. Maryland’s 2022 climate law also uses the 20-year metric.

This important distinction was a key provision pushed by supporters of the state’s Climate Leadership and Community Protection Act passed in 2019. It makes methane, the main component of natural gas, more potent than under the longer accounting timeline. Backers say this more accurately reflects the short-term warming impact of greenhouse gasses and the urgency around reducing emissions.

Hochul’s administration has been examining the issue of accounting for greenhouse gasses for the past few months.

The governor indicated in her State of the State address in January that she wants to link a proposed cap-and-trade policy for emissions in New York with other states. She directed state agencies to analyze the cost of using international accounting methods compared to the state’s law for cap-and-trade. California and other markets all use the 100-year timeline and incorporate the benefits of capturing emissions from biofuels before they’re burned.

“We’re getting closer to the time when these costs would begin to show up for New Yorkers,” said a person in the governor’s office who requested anonymity to candidly discuss negotiations. “New York has an outlier greenhouse gas emissions accounting methodology, and that emissions accounting methodology will drive additional costs to consumers as compared to the accounting methodology utilized by the rest of the world.”

The cost of using the CLCPA accounting metrics has not been fully analyzed, according to the governor’s office, and they’re focused on affordability as a key component in budget negotiations around cap-and-invest and climate policies.

The state’s most recent greenhouse gas inventory for 2022 shows emissions are about 170 million tons higher under the state’s accounting framework than the international standard used by the federal government and other states. That includes “upstream” emissions that occur outside New York.

“To achieve the CLCPA statewide emissions targets, New Yorkers would be financially responsible for eliminating those inflated emissions and out of state emissions,” the person in the governor’s office said.

Hochul’s top energy officials have publicly defended the estimated costs, which in the climate plan approved in December use New York’s accounting rules, as being a small fraction of the state’s economic output. They’ve repeatedly said that the net health and climate benefits outweigh those costs.

The CLCPA mandates that New York reduces emissions 40 percent from 1990 levels by 2030 and 85 percent by 2050, with the remainder offset to hit net zero. Under the current accounting, those reductions will require an aggressive electrification of buildings that currently rely on natural gas. There’s also little incentive under the current framework to use low-carbon fuels like renewable natural gas or biodiesel.

“At the end of the day, we just have to get to net zero, not absolute zero, and we have until 2050,” Parker said. “Part of what we have from the ecoterrorists is an attempt to move the goalposts.”

Environmentalists rally opposition

At least a dozen environmental groups have sent memos opposing Parker’s bill, S6030, since it was introduced on Monday including Sierra Club, Earthjustice, NY Renews, New York Lawyers for the Public Interest, Food and Water Watch and Environmental Advocates NY.

“Governor Hochul would side with the fossil fuel industry to torpedo New York’s landmark climate law, along with her own budget proposals to address the climate crisis, should she move forward with a proposal to weaken the state’s accounting for methane emissions,” said Earthjustice’s New York policy advocate Liz Moran. “The Governor and the Legislature still have the opportunity to make this a winning budget for the climate, but that is thrown to the wind if they cave to fossil fuel interests to gut New York’s climate law.”

Parker said the 20-year timeline makes achieving the state’s climate goals more expensive, as utilities pass costs along to ratepayers. He also said New York using its own accounting method ignores the need for a global solution to reduce emissions.

“It creates an easier time horizon and cost horizon for companies to use as they go into this process,” he added. “At the end of the day, something that works is better than something that’s fast.”

Proposals to give rebates to New York residents from climate funds raised under a cap on pollution would address concerns about cost for residents, said New York City Environmental Justice Alliance executive director Eddie Bautista.

“That would make sure that costs are not regressive,” he said. “The senator’s bill endangers the emissions goal that environmental justice communities have fought for for decades.”

Accessing federal money

National Grid, one of the state’s largest gas and electric utilities, and National Fuel, the largest gas-only utility, have previously pushed to change the accounting framework.

The forestry industry, the Clean Fuels Alliance that represents producers of alternative fuels and airlines are all supportive of Parker’s proposed measure. One argument they’re making is that New York needs to align its accounting with federal standards for companies to easily access incentives from the Inflation Reduction Act.

“If we don’t have this accounting we could lose billions of dollars of new investment,” said John Bartow, executive director of the Empire State Forest Products Association. “It’s more expensive to accomplish our emissions reductions using a 20 year” accounting method.

Bartow cited a report prepared by Tristan Brown, an associate professor at SUNY ESF, that seeks to calculate benefits of the state supporting use of low-carbon fuels.

These groups have also been supportive of a low-carbon fuel standard for transportation, which would incentivize displacing fossil fuels with biodiesel and other alternatives. Detractors are wary this would simply prolong the use of combustion engines that still emit co-pollutants rather than accelerate electrification.

Another change in the bill that’s drawn support from groups pushing for broader use of low-carbon fuels is requiring Department of Environmental Conservation to change the way it accounts for burning renewable natural gas produced from sources like crops or cow manure. Right now, DEC calculates those as very similar to burning fossil fuels.

“You’re severely discouraging investments in New York from low carbon fuel providers who might otherwise come to the state,” said Floyd Vergara, the director of state governmental affairs for the Clean Fuels Alliance of America. He said the group is not involved with the push to change the time horizon for greenhouse gas accounting.

Assemblymember Deborah Glick (D-Manhattan), who chairs the Environmental Conservation Committee, is not persuaded. She said federal officials have indicated that funding from the IRA will be based on individual projects, not the state’s plans.

“It clearly is the fossil fuel industry that is trying to stir up that there’s a big problem,” Glick said. “It’s a complete red herring.”

Glick said she would not support the Hochul administration’s pitch to change the accounting under the cap-and-trade proposal.

“It’s all very preliminary, but not good,” she said. “We’re not interested in doing things that erode the goals of the CLCPA. You set aggressive goals. You understand that you work as hard as you can to reach a goal, sometimes you don’t, but you don’t undermine your goal at the outset.”