CLCPA Update

CLCPA Update

While it is difficult to understate the scope and degree of change required to meet the state’s greenhouse gas (GHG) emission reduction and renewable energy deployment targets under the “Climate Leadership and Community Protection Act” (CLCPA), it has also been a challenge to clearly communicate the pending impacts in real terms. Recent developments, however, are providing more tangible illustrations of the types of policy actions that will be considered and, often, implemented in New York State.
We wanted to call these items to your attention, and we urge you to review and provide us with your feedback.

All Electric Building Mandates 
The New York City Council is posed to adopt legislation, Introduction No. 2317-A, that would generally ban the use of fossil fuels for any purpose in new buildings, applicable to buildings less than seven stories whose construction applications are filed on or after 7/1/23, and applicable to taller buildings whose construction applications are filed on or after 7/1/27. The bill includes various exemptions for school buildings, certain public works structures; manufacturing, laboratory, hospitals and commercial kitchens; emergency or standby generators; and several other categories. Note that all written testimony provided regarding this legislation is also available on line here.
At the state level, legislation has been introduced – S.6843-A (Kavanagh)/A.8431 (Gallagher) – that would prohibit the issuance of a building permit anywhere in New York for any commercial, residential or mixed-use building for which an initial permit application was submitted after 12/31/23 unless the building was an “all-electric building,” meaning that all space conditioning, water heating and appliances were electric-powered, and that electricity was “the sole source of energy” for such purposes. The bill allows exemptions where this mandate is shown to be “physically or technically infeasible,” however “financial considerations shall not be a sufficient basis to determine physical or technical infeasibility.” (Note, the bill does not define “commercial building,” nor is that term defined in NYS statute, so it is unclear whether it incorporates all non-residential buildings.)
We welcome your comments on these proposals, including your level of support or concern, as well as any specific comments including but not limited to estimates of capital and/or operating costs for compliance for different categories of structures, any issues regarding technical feasibility, and any other input that could help us assess this legislation.

Draft DEC Guidance on Air Permit Compliance with CLCPA 
The Department of Environmental Conservation has issued and is seeking public comment on draft guidance for complying with the CLCPA requirement that agencies, in considering and issuing permits and other administrative approvals and decisions, determine whether such decisions are “inconsistent with or will interfere with the attainment of” the CLCPA’s statewide greenhouse gas emission limits. The CLCPA further requires that if a proposed action is deemed inconsistent, an agency must provide a detailed justification as to why such limits may not be met, and identify alternatives or other GHG mitigation measures to be required. The DEC notice is here, and the draft policy is here. According to the draft policy, the DEC’s assessment will include consideration of both “upstream” and “downstream” emissions related to permitted action. 
The Business Council will be submitting comments on this proposal, in advance of the DEC’s February 7, 2022 deadline. We are looking for member feedback on this proposed draft, its scope and criteria, covered and exempt permits and projects and other issues, including any specific recommendations you have regarding modifying this proposal.

“Non-Public” Draft of CAC Scoping Plan
The CLCPA established a “Climate Action Council” to develop a draft and final “scoping plan” that makes recommendations on achieving the GHG emission limits mandated by the Act, with a draft plan due by 12/31/21 and, after holding at least six public hearings and 120 days for public comments, a draft plan is due by 12/31/22. The CAC has been reviewing a confidential, non-public version of its draft plan, but that draft has been posted online by Politico. While incomplete and subject to change, we expect that much of its text will carry forward into the formal draft plan.
We continue to work on a detailed summary of this proposal, but significant highlights include the following:

  • It contains a fairly detailed discussion on emission reduction and/or electrification strategies for major economic sectors, including transportation, buildings, electricity, industry, agriculture and forestry and waste, plus “cross sector” policies addressing land use, local governments and others. We urge Business Council members to review and provide us with feedback on these sections that apply to your business sectors.
  • Its cost/benefit analysis shows a significant net benefit under all scenarios examined over a 30-year planning period, however it seems to count climate benefits that would require global actions and not be achieved just by implementation of the CLCPA plan.
  • While it includes some “global” cost figures of achieving the CLCPA emission reduction and renewable deployment targets, it says little as to how those costs will be financed in any comprehensive way, nor does it provide any projected impacts on electric power or natural gas costs. On the other hand, it does cite a number of potential revenue options, including but not limited to: taxes or fees on fertilizer, solid waste generation, fossil fuel-consuming vehicles; assessments on the oil and gas industry; vehicle-miles-traveled based fees; mandated employer cost-sharing for retraining expenditures; mechanisms to “transfer catastrophic risks” to the financial sector; surcharges on insurance policies; and others. It makes no recommendation regarding broad-based carbon fees.
  • It includes recommendations related to a number of pending legislative proposals, including expanded producer responsibility and broader application of prevailing wage and expanded use of project labor agreements, among others.
  • It includes discussion of alternative fuels, including “green hydrogen,” saying they are likely necessary to decarbonize heavy duty vehicles and high temperature industrial applications.

This 320-page report contains considerable detail on the state’s impact analysis and implementation options and recommendations. As mentioned, we will be providing a more complete summary of this draft and the final draft scoping plan once it is available, but we thought it was important to provide this initial information in order to facilitate member review and comment.

Addressing Transportation Emissions

I also wanted to highlight and request feedback on several issues specific to transportation sector emissions.

  • Aggressive Transition to Electric Vehicles (EV): Transportation emissions account for 28% of the state’s overall emissions profile, and the draft scoping plan proposes several aggressive reduction strategies determined to be needed to reach both the 2030 (40% reduction from 1990 levels) and 2050 (net zero, economy wide) emissions targets mandated by the CLCPA. The draft scoping plan notes that 3 million EV’s must be in use by 2030 for the State to reach its interim emissions reduction target. Of the 9 million cars registered in New York, only about 80,000 are Zero Emission Vehicles (ZEVs), which means that significant steps will need to be taken now. In addition to significant deployments of EV’s and infrastructure, the scoping plan advanced additional proposals designed to eliminate transportation sector emissions, including: 

Adoption of California’s Advanced Clean Cars 2 and Clean Truck Regulations
Expansion of State incentives for ZEV purchases and charging infrastructure buildout
Significant investment in public transportation
Direct sales of EV’s by manufacturers
Procurement preferences for contractors utilizing ZEV equipment
Adoption of a Clean Fuel Standard

  • Legislation - There is also considerable focus on one legislative proposals, S.2962-A (Parker)/A.862 (Woerner), that would authorize DEC to implement a Clean Fuel Standard (CFS). The bill has more than 100 co-sponsors in the Legislature. A CFS (which is also referred to as a ‘low carbon fuel standard’) attempts to mitigate transportation emissions by reducing the carbon intensity of motor fuels through the blending of low-carbon alternatives. Impacts on fuel prices will obviously be contingent on program design but, for additional context, according to a recent analysis in 2020 California’s low carbon fuel standard added $0.22 per gallon to the cost of gasoline, resulting in a 7.5% reduction in carbon intensity.