Hochul Throws Climate ‘Grenade’ Into Budget Talks

Last-minute legislation would transform New York’s climate law, allowing significantly higher emissions over the next decade.

Colin Kinniburgh   ·   April 4, 2023
Hochul has often touted New York’s climate law as “nation leading” — but she’s starting to worry about how much it’ll cost. | Office of the Governor

Update: On April 5, the Hochul administration walked back its proposal to overhaul New York’s emissions accounting after a swift backlash from environmental groups and members of the Climate Action Council.

Also note: The text of this article has been edited to address disputes over how to measure the scale of the proposed changes.

GOVERNOR KATHY HOCHUL is pushing for an 11th-hour budget measure that would allow New York to emit significantly more greenhouse gases in the coming decades than state climate law currently permits.

It would also exempt the burning of biofuels from being counted towards the state’s emissions cap, in what one lawmaker called a “stunning” carveout. A lobbyist for the forestry industry, which includes paper, timber, and other tree-based products, told New York Focus he’s been pushing for the exemption for years.

The new proposal, first reported by Politico, may be under consideration as part of a budget swap for other major climate bills, sources told New York Focus. Last week, Senate energy committee chair Kevin Parker and Assembly counterpart Didi Barrett introduced matching standalone versions of the bill in their respective chambers. 

Hochul hinted at the possibility of reworking the state’s emissions accounting in her February budget proposal, though few noticed at the time. Her outline of a cap-and-invest program asked regulators to consider “internationally accepted best practices” for counting emissions.

Currently, New York is one of the only states that weighs methane emissions according to their short-term impact on the climate. The gas traps around 80 times more heat than carbon dioxide, but it dissipates from the atmosphere much faster: typically, within a couple of decades, compared to a century or more for CO2. That’s led many scientists to conclude that methane’s impact on the climate should be measured over a 20-year period, as New York currently does.

But other governments, by and large, haven’t caught up. The federal and international standards measure methane over a period of 100 years. New York’s exception is thanks to a provision in its 2019 climate law, the CLCPA, under which methane amounts to just over a third of the state’s emissions. Under the 100-year metric, that number drops to just 13 percent.

Cornell University biochemist Robert Howarth, an expert on methane who helped craft the state’s current standard, said peeling it back would be a “travesty” that would undermine the foundations of the state’s climate plan

“It would be a huge setback for us — at least a couple of years,” Howarth told New York Focus. 

For starters, the change would mean the state looks much farther along in cutting emissions than it currently is. 

“What this change would do is it would make gas companies look like they’ve been reducing their emissions overnight, when they actually wouldn’t have to have done anything differently,” said Liz Moran, northeast policy advocate at Earthjustice. 

By its current accounting, New York reduced its emissions 7 percent from 1990 to 2019. Using the 100-year count, that drop would look steeper, at 13 percent, according to state emissions data

New York is required to cut its emissions 40 percent from 1990 levels by 2030. Under the current accounting, that would mean a 134 megatonne drop in emissions this decade. Under the 100-year accounting, the number would be 86 megatonnes — just over one-third smaller. 

Note: Some observers and the governor’s office have disputed the methods of this analysis, noting that megatons of CO2 equivalent calculated using the two metrics under consideration have different values and cannot be compared apples-to-apples. 

Experts consulted by New York Focus disagreed on the most appropriate way to measure the impact of the proposal. Most agreed, though, that the scale of the proposed changes cannot be computed as definitively as our analysis originally suggested. Their impact will depend largely on methane’s share of total emissions cuts, and it remains unclear to what extent the accounting shift would affect that share.

What remains undisputed is that switching metrics would significantly ease the pressure on New York to reduce natural gas use this decade. 

We are leaving our original comparison in this story in the interest of transparency.

The discrepancy also minimizes emissions from certain sectors, Howarth said. 

“If you discount methane and underestimate its importance for climate, as this change would do, the housing sector would be less important,” as would waste management and agriculture, he said. Methane is the chief component of natural gas and a key byproduct of livestock farming and landfills. Buildings, where gas is widely used for heating and cooking, represent the largest share of the state’s emissions in part because of methane that leaks into the atmosphere along the way.

Transportation, conversely, would become more important — and is an area where the state has less control. “So this would be a huge abdication on what the state actually can do,” Howarth added.

The shift would amount to a wholesale rethinking of the plan that the state’s Climate Action Council mapped out over the last three years. Some lawmakers feel that would be hard to justify. 

“We cannot stop the climate crisis by rejecting climate science,” said Senate finance committee chair Liz Krueger. “The 20-year methane accounting … is one of the strongest parts of the CLCPA. Giving in to the polluter lobby by weakening our methane accounting will kneecap all our efforts going forward.”

Gas utilities including National Grid and National Fuel have pushed to switch to the 100-year accounting method, as Politico has reported. A National Grid spokesperson told New York Focus the company has not lobbied on the current legislation, however. National Fuel did not immediately respond to a request for comment. 

“Our law is so strong, and accurate, and powerful because we are basing it off of science,” said Assemblymember Anna Kelles. “To then go backwards to the 100-year [standard] when the international standard was built in the 1990s, when we didn’t have the data on methane … doesn’t make any sense.”

Former Assemblymember Steve Englebright, who sponsored the 2019 climate law, said it had been a fight to include the tighter methane standard in the first place, and that there was no good reason to revert to the “lowest common denominator.”

“What happens in New York matters. It always has. And it certainly needs to set the gold standard. That’s what we did with the CLCPA,” Englebright said.

Hochul herself has often touted New York’s climate law as “nation leading.” But as the green transition moves from planning to implementation, her administration is starting to worry about how much it will cost.

“It’s clear that cost is an issue that needs more attention and we are working with the legislature to explore options to address it,” a Hochul spokesperson told New York Focus. “We remain committed to securing a state budget that includes the most impactful climate initiatives in recent history.”

Hochul’s office shared estimates showing that natural gas prices would be as much as 79 percent higher under CLCPA accounting than under the conventional methods if New York implemented the same carbon price as Washington state, which recently launched its own cap-and-invest program. Gasoline would be 61 percent more expensive.

Biofuels Carveout

Methane accounting isn’t the only aspect of the climate law the new legislation would overhaul. It would also create a new opening for biomass and biofuels, by exempting them from the state’s emissions count entirely. This would mirror standards in the European Union, which has relied heavily on wood burning to wean itself off coal. US federal authorities also treat biomass as carbon neutral.

“When we’re looking at sustainable biofuels being produced, the CLCPA places New York at a competitive disadvantage,” said John Bartow, president of the Empire State Forest Products Association, which represents various wood-based industries.

Bartow told New York Focus he helped write parts of the bill that is now before the legislature. 

“It’s stuff that we’ve been talking about for three years,” he said. “Honestly, we talked about it as amendments back in 2019,” when the climate law first passed. 

A final piece of the proposed bill would allow a wood-burning power plant near Watertown to continue operating. (An earlier draft would have added biopower in general to the state’s definition of renewable energy, but that proposal didn’t advance, Bartow said.)

Biomass proponents maintain that the fuel is carbon neutral because trees absorb carbon before releasing it back into the atmosphere when burned. But many scientists have disputed this, and Europe’s biomass-friendly policies have come under increasing scrutiny from lawmakers there. New York’s climate plan keeps the door open to biomass development, pending strict guidelines for which fuels count as sustainable. 

Kelles, the assemblymember, called the proposed exemption “stunning,” citing a Natural Resources Defense Council analysis that found that the total emissions from processing and burning wood pellets could exceed those of many fossil fuel plants. 

A Fight Over Who Pays

Proponents of the new legislation point to potential federal funding that New York could miss out on under the current design of the climate law. The Inflation Reduction Act includes substantial tax credits for biofuels, for example, and while nothing in the law prevents New York businesses from accessing those credits, Bartow says biofuels companies are unlikely to come to New York because of the additional costs imposed by its emissions accounting.

The state AFL-CIO signed on to the proposal on Friday, citing the federal funds. 

The core of the argument over rewriting the climate law, though, has less to do with specific funding opportunities than with the overall cost of decarbonizing on the timeline New York has set out. 

Bartow noted that everyday New Yorkers could wind up footing the bill for the more stringent emissions standard if the state moves forward with a cap-and-invest program, which would put a price on pollution. 

Pete Sikora, climate and inequality campaigns director at the advocacy group New York Communities for Change, said the Hochul administration has put itself in a bind by relying on a market-based system, rather than progressive taxation, to fund its green transition.

“They need to design cap and invest to deliver large-scale change without raising costs. And they’re freaked as they see the math,” he said — leading them to throw a “grenade” into budget talks. 

Pete Harckham, chair of the Senate environmental committee, said that increasing New York’s carbon budget is the wrong way to address the costs of climate action.

“If the Executive is concerned about affordability, there are many avenues to protecting consumers,” he said. “Disrupting our state climate plan should not be one of them.”

Colin Kinniburgh is a reporter at New York Focus, covering the state’s climate and environmental politics. Over a decade in media, he has worked in print, television, audio, and online news, and participated in fellowship programs at CUNY’s Graduate School of Journalism and… more
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