Is Eric Adams About to Gut the Nation’s Most Important Local Climate Law?

Enormous pollution cuts and tens of thousands of jobs depend on how Adams implements New York City’s landmark climate law in the coming months.

Pete Sikora   ·   July 26, 2022
Mayor Eric Adams and his top climate staffer, Rohit Aggarwala | Ed Reed/Mayoral Photography Office

This article is published in our Perspectives section. Pete Sikora is the Climate & Inequality Campaigns Director at New York Communities for Change.

I’m 47 years old. This past week in this heat wave, after just a half hour walk, I’d get so hot I could barely think. I’d need to sit and recover for a stretch. As I write this column on Sunday, the forecast is for the hottest day yet, with temperatures reaching 96 degrees and deadly humidity. Yikes.

In 2013, New York City’s Panel on Climate Change, the city’s version of the UN’s International Intergovernmental Panel, modeled the city’s future weather that we’re now experiencing. At that time, the city had about 20 days of over 90 degree heat each year. That number will rocket to about 35 days by 2035, and about 50 days—more than half the summer—by 2050.

There’s a degree of imprecision in that sweatily awful long range forecast: the degree to which our politicians and corporations stay in thrall to the fossil fuel industry. If we make them slash climate-heating pollution, the worst can still be avoided. 

In 2019, NYC enacted a landmark law, Local Law 97, to tackle its top source of climate pollution: large, dirty, polluting buildings. It’s the first law in the country to set specific and enforceable limits on climate-heating air pollution generated by buildings. 

Local Law 97 cuts pollution from large buildings at the pace and speed of the Paris climate agreement, with pollution caps first taking hold in 2024 and dramatically tightening in 2030. In the process, it creates tens of thousands of jobs in energy efficiency, which would especially benefit the city’s working class construction workers. 

Passing the law isn’t enough, though. It must be properly implemented, which means setting rules and regulations to set various requirements and processes into place—including assessing the proper penalties for violations, not wrist slaps. Mayor Eric Adams controls those rules, which his appointees at the Department of Buildings will set by the end of the year. 

The Adams administration can either follow the purpose of the law as intended by the de Blasio administration and the City Council, which enacted the law, or weaken or even gut its requirements.

The real estate lobby, which heavily supported Adams’ candidacy for Mayor and bitterly opposed passage of the law, is pushing Adams to choose the latter option.

As the Administration begins to propose regulations, we’re now entering the crucial stretch for the law’s implementation. These regulations and subsequent enforcement will determine whether New York City cuts its pollution and creates jobs, or slides backwards. 

Right now, Adams’ intentions are as clear as mud. 

Getting Local Law 97 Right

Eric Adams is a seemingly-indefatigable blur of motion and rhetoric. He pinballs around the city in a frenetic but still-familiar mayoral routine: community events, announcements, and appearances at various tragedies.  

Meanwhile, city agencies plod forward, doing the daily business of government. In the coming months, they will set Local Law 97’s core regulations. There are three key decisions that will determine whether the law is implemented or gutted.

The first and most urgent is whether landlords will be allowed to buy out of the law’s requirements rather than slashing their building’s pollution. 

Local Law 97 allows landlords to use Renewable Energy Credits (RECs) that derive from renewable energy projects which deliver power into the city’s grid to satisfy the law’s pollution limits. It directs the Administration to set rules for this critical process. 

RECs help pay for new wind and solar projects and can be very useful in getting those projects built. But if the city does not tightly limit the use of RECs in its rule-making, it will create a massive loophole in the law. Many building owners would opt to purchase RECs rather than upgrading their buildings, which would cost them much more. 

The Mayor’s top climate staffer, Rohit Aggarwala, testified to the Council last month that this rule will soon be proposed as a draft. Disturbingly, Aggarwala hinted that the city might propose a very loose limit: limiting RECs to a building’s electrical use, but not capping how many RECs would count toward the requirements. “While we have not finalized those rules,” he said pointedly at the June 27 oversight hearing, “we have taken the position for city government operations that RECs can only be used for electrical consumption.” 

If that’s the only limit the Administration places on RECs, the law will be gutted. Tens of thousands of future jobs won’t materialize. Pollution won’t be reduced from the city’s dirtiest buildings.

Councilmembers grilled the mayor’s staff at the hearing last month. “This would be a method that owners could use to avoid improving their own [climate] footprints,” said Councilmember Carmen De La Rosa, who initiated and co-chaired the oversight hearing. “If landlords buy RECs instead of cleaning up their buildings, they’re not creating jobs or reducing air pollution in the city,” said Councilmember Tiffany Caban, in a series of probing questions on the topic. But Aggarwala wouldn’t answer these critiques or provide clarity on the administration’s intentions on RECs.

A recent study commissioned by the Real Estate Board of New York, which favors allowing wide use of RECs, shows the math is grim for the law unless RECs are tightly limited. The supply of RECs that will interconnect into the city’s grid will be about 14 million megawatt hours (MWh) worth of energy, not including RECs the city government plans to purchase for its own use. Meanwhile, it would take about 14 or 15 million MWh to cover all the pollution reductions mandated under the law from 2030 to 2035. Since REC prices will be relatively cheap, owners would be able to buy out of their requirements and entirely avoid cutting pollution for more than a decade.

That’s why advocacy groups, experts and some unions are advocating for tight limitations on REC use. We’ve been pushing for RECs to not only be limited to a building’s electricity use—not its on-site fossil fuel use—but also limited to a maximum of 10% of a building’s pollution limit (or an equally tight limit). In addition, an accompanying type of potential alternative that could become a problem, called offsets, also must be regulated properly and included in these limits to avoid becoming a potential loophole.

Aggarwala’s testimony on this point was extremely disturbing, because he repeatedly downplayed the huge potential impact of RECs, telling Councilmembers that “even if the rules were completely generous,” there wouldn’t be enough RECs on the market “to displace any other kind of compliance.”

But that’s not accurate, or at least it’s very misleading. As the REBNY study shows, the supply of RECs will very likely be large enough to cover almost all of the pollution reduction requirements that take hold in 2030, which last until 2035. (There would be enough RECs available to entirely subsume the weaker requirements that obtain from 2024 to 2029, once the first big project, CHPE, comes online, likely in 2025.)

Fortunately, the administration made clear to the Council that it will carefully examine this issue. But at this point, allowing the wholesale use of RECs appears to be its default position—and it represents gutting the law.

Setting and Enforcing Requirements

The second massively consequential regulatory action the law directs the city to undertake is fine-tuning building-by-building requirements.

Local Law 97 sets per square foot pollution limits on ten broad categorizations of buildings. The law’s drafters understood that these caps should ultimately be matched to more detailed sub-categorizations of buildings — refrigerated and non-refrigerated warehouses both fall within the same top categorization, for example, but have a very different energy use profile. The law tasks the city with setting limits calibrated to the specific building types and uses.

These critical rules are also due in the coming months. They must be set correctly: some buildings’ limits will tighten and others will loosen, but the law requires the same aggregate results: 40% reductions in emissions by 2030.

The obscure Office of Building Energy and Emissions Performance, created by the law in the Department of Buildings, is charged with implementing these changes. The process must be handled professionally, without any monkey business to skew requirements to unfairly benefit particular building owners.

Meanwhile, building owners can’t be allowed to skate away from upgrading their buildings just because the grid, which neither they nor the city control, gets cleaner than was initially anticipated. Since Local Law 97 was enacted before the state enacted a law in 2019 setting a 70% target for renewable energy on the grid, the law’s metrics reflect the state’s previous target. Thus, as the requirements for buildings are calibrated, they also must be simultaneously adjusted for the cleaner grid that’s coming. The law granted substantial regulatory discretion to the Mayor in order to allow the Administration to make changes that are merited to fulfill the law’s purpose.

Finally, the Administration can’t go soft in enforcing the law. Local Law 97’s first requirements take hold in 2024. These initial requirements are pretty loose: only one-fifth of large buildings, or about 3,000 large buildings, are currently over the cap set for their buildings from 2024 to 2029. Just about any building making a good faith effort can meet these limits and avoid the law’s penalties.

The administration is considering various unacceptable schemes to delay or weaken such penalties. Without serious penalties, the law will fail: it’ll become another housing and buildings law that exists only on paper. Landlords will flout it unless they know they will be hit with serious financial penalties for non-compliance. 

Under de Blasio, the administration was very, very clear with the industry: they would pay the law’s maximum fines if they exceeded its pollution limits. Those fines are set at a specific level high enough to make it in the owner's interests to comply. If Adams lowers or delays them, many owners will simply opt to flout the law and pay a more modest, wrist-slap-level fine.

After he won the 2021 mayoral primary, Adams’ rhetoric about Local Law 97’s enforcement was terrible. His spokespeople repeatedly suggested that penalties should be weakened because they might be “unfair.”

That rhetoric has had real world results. Industry scuttlebutt has it that some regressive landlords have started to assume they won’t need to follow Local Law 97, and therefore aren’t beginning the work to upgrade their buildings. That means dirtier air and fewer jobs.

More recently, Aggarwala, on behalf of the administration, has been more clear that violators will not be let off the hook. The administration has stopped suggesting in public that they may change the penalties. Nonetheless, weakening penalties remains a key concern.

The mayor should do away with the uncertainty his administration has created over enforcement. He should make a clear statement that the law will be enforced and maximum penalties will be assessed, full stop. Otherwise, owners may opt to pay low penalties instead of upgrading their properties.

The Mayor is very quick to enforce laws against turnstile jumpers or homeless people sleeping on the street or in subways. He has no problem making working class and destitute people pay. He’s much less willing, so far, to say the same to powerful, deep-pocketed real estate developers.

The Process From Here

A couple years ago, the city was officially reclassified as a “humid subtropical climate zone.” We can all confirm. 

I’m a pretty lucky guy, because I can afford to run the A/C all the time. I’m healthy and won’t realistically expire from heat exhaustion or heat-caused illness. My kids and I are on slightly higher ground, away from the shoreline. The sewers on my block are not prone to flooding in a heavy rain. At least, not yet.

Other New Yorkers don’t enjoy those privileges. Each summer, hundreds of New Yorkers die from the rising heat. The effects, like so many of our social ills, hit much worse in the city’s segregated neighborhoods, where parks, shade and air conditioning are less common and asthma, health problems and poverty are much more common.

Eric Adams has to do a lot more on climate than just fully implement and enforce Local Law 97. But over the coming months, we can expect his administration to propose draft rules to implement the world’s most important city-level climate and jobs law. Each rule will go to a 30 day comment period, followed by a final decision on each rule. It’s dry regulatory stuff, but critically important.

With Biden, Schumer, Pelosi and the federal government failing, U.S. action—or inaction—depends on states and cities. The coming months will decide whether Mayor Adams and his appointees set the world’s most important municipal-level climate and jobs law into place—or derail it. The public should raise its voice to urge Mayor Adams to further our interests, not the real estate lobby’s.

Pete Sikora is the Climate & Inequality Campaigns Director at New York Communities for Change.
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