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Legislative Memo

Ken Pokalsky
Vice President of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.8390 (Morahan)

Support

SUBJECT:

Greenhouse Gas Emission Limits

 

DATE:

June 18, 2008

 

The Business Council strongly opposes S.8390, which would require the Department of Environmental Conservation to impose restrictions on carbon dioxide and other greenhouse emissions from any source, including but not limited to manufacturing, power generation, fuel processing and others.  Presumably, this authority could also be applied to residential and commercial buildings, on- and off-road vehicles, and other sources.

Moreover, the bill mandates that emissions by 2014 not exceed “aggregate levels of greenhouse gas emissions” for 2000, and mandate further emission reductions after that date.  This limit would be “enforceable.”

We believe that state-specific greenhouse gas emission reduction mandates will put the state at a significant economic disadvantage compared to other states and nations.   To the extent that the costs imposed by such mandates merely shifts activity from in-state to out-of-state activities, the impact of such mandates on actual greenhouse gas emissions is also reduce.

The Business Council and others have already raised concerns about the economic impact of RGGI, the regional greenhouse gas restrictions on larger electric power generation to which New York and other northeast states have already committed.  That program, which features a cap and trade program, and the ability to use emission offsets from other sources, at least provides some market mechanism to help reduce the economic damage caused by forced emission reductions.  However, even with those mechanisms, RGGI places New York at significant economic risk due to increases in natural gas costs, high costs of emission allowances, shutdown of existing non-emitting generating sources, or other factors.

We are even more concerned about the feasibility and costs that would be imposed by this legislation.

It imposes an across-the-board, “enforceable” emissions limit, even though the bill is ambiguous on what sources are subject to the limit.

It provides no market mechanism to promote more cost-effective emission reduction investments.

It provides no “circuit breaker,” that would allow for emissions above limits in the event of significant adverse economic impacts.

In short, our reasons for opposing this state-only greenhouse gas restriction are simple. 

It will result in significant cost increases for New York businesses and residents, and have adverse impacts on the state's energy, industrial, transportation and other sectors.

To the extent that the bill merely shifts fuel usage from in-state to out-of-state facilities, the impact of this bill on actual CO2 emissions will be greatly diminished. 

For these reasons, The Business Council strongly opposes adoption of S.8390.