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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.694.4461
www.bcnys.org

BILL:

A.9508 (Budget) Part QQ

Support

SUBJECT:

Unworkable Greenhouse Gas to Zero

 

DATE:

March 13, 2018

 

The Business Council opposes this legislation, which would provide the Department of Environmental Conservation (DEC) with the mandate to eliminate all greenhouse gas (GHG) emissions from any major emission source in the state by 2050.

The Business Council supports efforts to reduce the carbon intensity of our economy without reducing economic growth. If we are committed to addressing the impact of global climate change and the resultant negative impacts, we must ensure that when New York adopts policies to address in-state GHG emissions, those policies must not lead to carbon leakage 1.

The Business Council would first like to address a false narrative: this legislation does not simply codify New York State’s goals. Executive order number 24 (2009) established a goal to reduce greenhouse gas emissions by 80% by the year 2050, not zero. Zero means every source has to be eliminated, including current technology furnaces, internal combustion engines, and many industrial processes.

The Business Council commends the Assembly sponsor on making more amendments to the legislation. Some of the amendments reflect an acknowledgement of the merits of our concerns. Specifically, the bill now excludes agricultural emissions from livestock (but it is still extends to manure management, tractors, and soil management) and contains recognition of The Business Council’s concerns regarding carbon leakage. However, these amendments do not go far enough and the legislation remains unworkable and unrealistic for numerous reasons. 

Scope
The legislation will require substantial emissions reductions in a relatively short period of time. Specifically, the bill requires that in a little more than thirty years the following sources must go to zero emissions:

Requiring emission levels of zero from these sources by 2050 is simply not practical.  There are significant economic and technological barriers to reducing emissions to zero. Current technology is not available to meet the requirements of this legislation without strict prohibitions. If this bill were to become law and could be enforced, it would result in inhospitable conditions for manufacturing, farming (tractors and soil management), and the current fleet of fossil fuel trucks and cars. 

Leakage
If New York were to try and stop all of its own CO2 emissions, it would lead to colossal carbon leakage, and the bill includes minimal and ineffective language to address this very real problem. Although the legislation has been amended to reference leakage, the bill only requires the DEC to “minimize leakage”. The Business Council finds this language to be woefully inadequate.

GHG emissions are a national and international issue. If New York was forced to meet the unsustainable emission reductions required by this legislation the result would be a loss of jobs, wealth and population. It is also very likely, if not certain, that due to carbon leakage the world would be no better off.

It should be noted that New York State is one of the least carbon-intense economies in the world. In 2011, New York produced 155.7 metric tons of energy-related carbon dioxide per million dollars of GDP, which is about a third of the average carbon intensity nationwide.

If New York were to eliminate all of its C02 emission (211.74 MMtCO2e) it would reduce US CO2 by 3.3 percent and world emissions by .5 percent. (In 2012, U.S. greenhouse gas emissions totaled 6,235.10 MMtCO2e and World emissions were 44,815.44 MMtCO2e).

No amount of legislation requiring state agencies to increase employment opportunities and improve job quality will produce real world results if businesses cannot produce items or get them to market.

The legislation has been amended to require the state to eliminate “greenhouse gases produced outside of the state that are associated with the generation of electricity imported into the state and the extraction and transmission of fossil fuels imported into the state.” There are several problems with this approach:

Other Issues
The legislation would require that by 2030, all load serving entities (utilities and energy service companies (ESCOs)) purchase fifty percent of their power from renewable energy systems. The legislation requires that the developer of renewable energy systems rated at greater than 250 kW pay no less than prevailing wage. Such a requirement will force private contractors on private projects to pay more than market wages. The legislation includes a provision which allows for the suspension of the 50 percent by 2030 mandate when it “impedes the provisions of safe and adequate service or there is a significant number increase in arrears.” This language is well-intentioned, but there is no consideration to suspending the program when there is an increase in leakage. Based upon the most recent procurements the current 50 percent by 2030 mandate will cost energy consumers over a $1 BM in the next five years, and is unlikely to significantly reduce carbon emissions in New York.

Conclusion
The Business Council has agreed to work on the development of reasonable climate change policy. We suggested that the state focus on specific market failures in areas that can make a significant impact on strategic priorities; catalyze private-sector competition by providing incentives aligned with strategic outcomes; and utilize the most cost-efficient actions to facilitate positive outcomes. Unfortunately, this legislation has chosen to head in a different direction.  If enacted, this bill will lead to huge carbon leakage, meaning its impact on aggregate worldwide emissions will be minimal at best.

For these reasons and many more, The Business Council strongly opposes adoption of this legislation.

  1. Carbon leakage is the term often used to describe the situation that occurs if for reasons of costs related to climate policies; businesses were to transfer production to other countries which have laxer constraints on greenhouse gas emissions. This leads to an increase in their total emissions.