Legislative Memo


A.7572-A (Sweeney) / S.4315-A (Thompson)



Greenhouse Gas Emissions Limits



April 22, 2010


The Business Council strongly opposes A.7572-A/S.4315-A, 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 2013 not exceed “aggregate levels of greenhouse gas emissions” for 1990, 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 reduced.  New York should work with the federal level to create a national CO2 standard.  This will promote fair competition, protect New York businesses and consumers, and provide consistent investment signals to move forward with new investment.  A state by state patchwork quilt of differing regulations is inefficient. 

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 limited market mechanism to help reduce the economic damage caused by forced emission reductions.  However, even with those mechanisms, RGGI places New York businesses and consumers at significant economic risk due to higher natural gas costs, emission allowance costs added to every megawatt of energy produced in New York, potential shutdown of existing emitting generating sources, relocation of NY businesses out of New York and a definite competitive disadvantage to all businesses located in non-RGGI states.

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. Further, there has been no economic analysis to determine whether this type of standard is realistically achievable or economically acceptable.  New York businesses and consumers are already subject to one of the highest electric rates in the nation.  It is paramount that a full analysis is done before such a standard is ever considered.

Further, 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 A.7572-A/S.4315-A.