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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.465.7511, ext. 206
www.bcnys.org

BILL:

S.6617-A (Avella) / A.8270-A (Englebright)

Support

SUBJECT:

Greenhouse Gas to Zero

 

DATE:

June 13, 2017

 

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

 

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 emissions that the DEC determines are capable of being monitored for compliance from the following sources must go to zero:

Requiring emission levels of zero from these sources by 2050 is simply not practical.  New York City may ave adopted an aspirational goal of 80% percent reduction by 2050.  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 unacceptable. 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. The only guarantee is that New York’s economy would crater.  Additionally, 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.

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).

 

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.  Some conservative estimates indicate that the current 50 percent by 2030 mandate will cost energy consumers $744 M in the next five years.

 

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.

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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.