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‘An Unprecedented Commitment’: New State Budget Advances Several Major Climate Policies

Gov. Hochul talks clean energy (photo: Darren McGee/Governor's Office)

Climate activists are cheering New York’s $229 billion budget for the 2024 fiscal year, which was approved Tuesday night, celebrating three major policy victories and a series of additional funding allocations. The changes, seen as monumental by supporters and critics alike, include passage of legislation that will ban gas hookups in new construction, allow the state power authority to build and own renewable energy facilities, and create a “cap and invest” system with decreasing caps on greenhouse gas emissions, fees on those emissions, and funding for a variety of related purposes including consumers’ energy bills.

While some disappointment remains among activists and progressive elected officials as several other measures were left on the cutting room floor, there is widespread celebration as New York takes major steps toward a renewable energy future. There is also significant skepticism among conservatives and some moderates around whether New York can and should be taking such aggressive steps.

Climate legislation was one of the areas where there appeared to be broad agreement between Governor Kathy Hochul and the State Legislature, even as they clashed on other contentious issues that delayed the budget one month past the April 1 start of the new fiscal year. Both sides agreed that urgent and ambitious action is necessary to meet emissions targets set by the state’s landmark Climate Leadership and Community Protection Act (CLCPA) of 2019. The act requires a 40% reduction in statewide emissions by 2030 and an 85% reduction by 2050 compared to 1990 emissions levels. It also requires that 70% of the state’s electricity should come from renewable sources by 2030 and that 100% of the state’s electricity should be emissions free by 2040.

Much of the climate, energy, and environmental policy agenda for the year was set by long-running efforts by climate activists and the mandated Scoping Plan from the state Climate Action Council, established in the CLCPA and released in December. In January and February, Hochul then offered her agenda, informed by that Scoping Plan, setting the stage for negotiations with the Legislature.

“New York is committed to building a clean economy and protecting our environment for future generations," Hochul said in a statement on Wednesday. “This Budget shows an unprecedented commitment to green infrastructure, reducing emissions from the building sector, and protecting clean water. I thank my colleagues in the Legislature for their collaboration on a transformational Budget that represents one of the most ambitious packages our state has advanced as we continue the fight against climate change.”

The governor’s marquee climate-related achievement is the cap-and-invest program that will impose a cap on greenhouse gas emissions, to be reduced every year, and require the state’s major emitters and fuel distributors to buy allowances for their emissions. The revenue raised from the program is meant to be directed towards renewable energy, green jobs, and environmental justice communities, with at least $1 billion set aside for rebates to help consumers with higher energy bills.

The final budget sets the foundation for the cap-and-invest program, including labor and investment provisions, and the overall program will now have to be crafted by the state Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) over the next year.

Two other major bills that have been longtime priorities for climate advocates also made it into the budget – the All-Electric Buildings Act, which prohibits fossil fuel hookups for heating equipment in new construction starting in 2025 for buildings of seven stories or fewer, and 2028 for almost all new buildings; and the Build Public Renewables Act (BPRA), which will allow the New York Power Authority (NYPA) to build and operate its own renewable energy projects. 

Assemblymember Robert Carroll, a Brooklyn Democrat who sponsored the BPRA, called it the “most important Green New Deal legislation to ever pass” in Albany. “This will ensure New York is a nationwide leader in the just and sustainable transition from fossil fuels to renewable energy. It will transform NYPA from a moribund agency to the most dynamic builder and owner of public renewables in the nation,” he said in a statement. 

“New Yorkers have won the most transformational climate and green jobs bill in the nation,” said the Public Power NY Coalition, which was a major proponent behind the legislation, in a statement. The BPRA is expected to create tens of thousands of union jobs in the renewable energy sector, with prevailing wage requirements and Project Labor Agreements to ensure worker protections. The coalition did, however, criticize the exclusion of stronger mandates in the legislation, such as a proposed requirement to build new projects after 2035.

The state currently does have billions invested in renewable energy projects that have been completed or are underway including wind, solar, and hydroelectric infrastructure. Just last year, the governor signed off on the largest transmission projects in the state in 50 years, approving two renewable energy pipelines that will power New York City.

The budget also requires that state facilities and campuses be entirely decarbonized by 2040, allocating $30 million to NYPA to create decarbonization plans for 15 state facilities and another $30 million to SUNY Albany for a Thermal Energy Network. And it authorizes Suffolk County to carry out a ballot referendum on creating a recurring funding source for wastewater infrastructure.

Besides legislation, there are also several climate-related funding streams in the budget including $200 million to provide relief to New Yorkers with high energy bills, $200 million to help low-income households electrify and retrofit their homes, $500 million in clean water infrastructure funding, $400 million for the Environmental Protection Fund, and $200 million to improve state parks.

Those investments will complement the implementation of the $4.2 billion Environmental Bond Act which was approved by voters in November and the state has now begun to implement.

“I think overall we're happy with [the state budget],” said Pat McClellan, policy director of New York League of Conservation Voters (NYLCV), in a phone interview. “There's definitely still work to do.” All-electric buildings and cap-and-invest were among NYLCV’s top priorities.

A crucial measure that advocates also celebrated was additional state funding for the MTA. A well-functioning mass transit system, they say, is an essential component to reduce a reliance on polluting personal vehicles. “Boosting service frequency and reliability is one of the single best things you can do to get more people out of cars,” McClellan said.

The budget did not advance another climate-crossover policy pushed by Hochul: denser housing, especially around mass transit stops throughout the MTA region — a policy at the nexus of climate, housing, and transit. It was part of Hochul’s larger Housing Compact plan that the Legislature rejected.

Several other proposals that activists and legislators wanted did not make it into the final deal. That includes the New York HEAT (Home Energy Affordable Transition) Act, which aligns gas utility regulation and planning with the goals of the CLCPA and ensures that low- and moderate-income families don’t spend more than 6% of their income on energy bills. McClellan said the bill is essential to cut emissions from existing buildings, which are the biggest polluters in the state.

The budget also did not include a proposed phased-in ban on new fossil-fuel heating equipment that Hochul had proposed. The idea sparked a misleading narrative that the governor wanted to require the removal of gas stoves from people’s homes, and she later backed away from the proposal. 

Another exclusion from the budget was the Waste Reduction & Recycling Act, a bill aimed at reducing packaging production and increasing recycling. “Those were both things that we were disappointed by because we’ve been pushing hard for them and we're certainly going to be revisiting them post-budget,” McClellan said.

Legislators and advocates who hailed the passage of the cap-and-invest program say both the executive and legislative branches must now ensure smart design of the program and make sure that there are adequate safeguards in place for the money that it raises. “There's a lot of work left to do on the program design,” said McClellan. “We would have liked to have seen some more detail in the budget bills in terms of what types of spending will happen with those revenues and what types of guardrails will be in place to make sure that we're getting serious reductions in disadvantaged communities.”

That point isn’t lost on lawmakers. Senator Pete Harckham, a Westchester Democrat who chairs the Senate’s Committee on Environmental Conservation, said in a phone interview that he and his colleagues will continue to push for mandates on how investments are funneled from the program. Harckham has sponsored the Climate and Community Protection Fund bill, which would ensure that cap-and-invest proceeds go towards accomplishing the goals of the CLCPA including building efficiency retrofits, green energy infrastructure, mass transit, affordability rebates, and more. “We’ll try and move that bill this year,” he said. Legislators have about a month of session left this year.

“While we didn’t get everything we wanted on the invest side, we got important principles in there,” Harckham added, pointing to union labor provisions with prevailing wage standards for new renewable projects that were included in the budget. “We established the principle that the governor will come back to the Legislature before spending the funds. That’s really an important separation-of-powers victory, and we put our flag in the ground about disadvantaged communities.” 

He also intends to prioritize waste reduction legislation in the post-budget session. “I'm optimistic that we can get there on waste,” he said. 

In a phone interview, Katherine Nadeau, deputy director of environmental group Catskill Mountainkeeper, praised the Legislature for removing a proposal in the cap-and-invest program, backed by the governor, which would have given certain businesses free allowances for emissions and for putting the revenues from the program into the budget, making it “subject to appropriation, and that is going to be a democratic process for moving those billions of dollars. out across the state to support climate solutions.”

The governor also backed away from another proposal opposed by Democratic legislators that would have changed the way that the state accounts for methane emissions.

Nadeau said the state should now move to pass the NY HEAT Act, which would also eliminate the so-called “100-foot rule” that requires utilities to install gas lines for new consumers for free if they live within 100 feet of an existing main gas line. Existing utility customers pay increased costs, effectively subsidizing fossil fuel infrastructure. 

“The budget is a big, complex document and this is a great example where in some places we have definitely gained on the climate solutions front and on meeting the need that the climate crisis presents to New Yorkers, and there are other places where there's so much work to be done,” Nadeau said. 

Conor Bambrick, director of policy for Environmental Advocates NY, praised the budget for taking “a significant stride towards tackling the climate crisis and protecting our most vulnerable communities.” But he expressed some disappointment that it did not dedicate funding to replace lead lines around the state. “With an estimated 500,000 of these pipes continuing to expose low-income New Yorkers and communities of color to a dangerous neurotoxin, state leaders must prioritize getting the lead out before the end of session by passing the Lead Pipe Right to Know Act,” he said. “We need decisive action to put our state on track to meet the Biden administration’s goal of 100% lead service line replacement in the next 10 years.”

by Samar Khurshid, senior reporter, Gotham Gazette

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