New York State Climate and Environment

Hochul’s ‘Bait and Switch’ on Climate: State of the State 2025

It looked like 2025 could be a tipping point for climate action in New York. Instead, the governor is backtracking on key parts of her agenda.

Colin Kinniburgh · January 15, 2025

Photo collage of Governor Kathy Hochul in front of a yellow gas pipe on a residential street.

In addition to backtracking on carbon pricing, the governor also dropped a plan to gradually transition homes off gas — something she supported last year. | Photos: Colin Kinniburgh, Governor Kathy Hochul.

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If all you heard was her State of the State address, Kathy Hochul would sound like a governor ready to make bold moves on climate.

“We need look no further than the deadly fires in Los Angeles for a reminder of how fragile our world is and what the future will hold if we sacrifice mother nature on the altar of profit,” she said. “We are truly the first generation to experience the effects of climate change and we are the last generation who can do anything about it.”

It was a departure from last year, when she barely mentioned climate at all. She promised on Tuesday to back up the talk with “an historic $1 billion investment to further the transition to a zero emission economy.”

The image shows a collage with Kathy Hochul in the foreground and grey smokestacks in the background, with dollar signs among the smokestacks.

What is ‘Cap and Invest’?

Colin Kinniburgh

But the bigger news was what Hochul didn’t include: a plan to move ahead this year with cap and invest, the flagship climate funding program she has promised for the last two years. Instead, in the briefing book accompanying her speech, Hochul appeared to further delay the program, once again calling into question New York’s ability to deliver on its climate law.

Hochul is also retreating on another top climate movement priority: a plan to gradually transition homes off gas, through legislation known as the NY HEAT Act. The governor proposed her own version of the bill last year but did not succeed in passing it through the state budget.

“I am extremely disappointed that the governor failed to include both NY HEAT and Cap & Invest in her State of the State, after championing both proposals,” state Senate budget chair Liz Krueger told New York Focus by email.

Climate groups panned the backtracking, which caught many off guard after Hochul’s administration had suggested in recent weeks that she would move forward with a carbon pricing program.

“New York’s climate law requires regulations to be in place that will slash emissions this decade, and by delaying the cap and invest program, New York is really failing to take action at a time when costs of climate disasters are stacking up,” said Kate Courtin, senior manager with the state climate team at the Environmental Defense Fund.

In its sole mention of cap and invest, the State of the State book said only that by the end of this year, state agencies would propose new regulations on greenhouse gas reporting. Those regulations represent just a portion of the rules that are supposed to structure the program. They will not answer the biggest outstanding questions about it, like the price the governor is willing to put on carbon.

“What we’re seeing essentially is a bit of a bait and switch, where signals were headed out … so that we could begin some functional program this year,” said Eric Walker, the energy justice senior policy manager at WE ACT for Environmental Justice. “What we see instead is a presumably taxpayer-funded plan that doesn’t get to the scale that we need,” he continued, referring to the $1 billion Hochul announced.

It is not clear where that funding would come from — whether it would be new or “cannibalizing other existing funding sources,” in the words of Stephan Edel, executive director of the climate justice coalition NY Renews.

Even if it is entirely new funding, $1 billion would be considerably less than the $3 billion or more the state had expected to raise in the first year of the cap and invest program.

“We don’t want a band-aid solution here,” Courtin said. “We need a long-term, sustainable funding solution.”

Black and white photo of three smokestacks overlaid with a diagonal yellow dotted line corresponding to modeled data of emissions decreases in New York State.

New York May Finally Put a Price on Pollution in 2025

Colin Kinniburgh

The governor’s office did not respond to follow-up questions. Her briefing book said the delay would create “more space and time for public transparency and a robust investment planning process.”

Upstate United, a business group opposed to cap and invest, welcomed the move.

“We applaud Governor Hochul and agree that any transition to adopt NY’s Cap-and-Invest must be done in a way that makes our state more affordable,” said Justin Wilcox, the group’s executive director, in an email. “Her decision to back off from the multi-billion-dollar proposal is no doubt the right one for New Yorkers’ wallets.”

A year ago, state officials were promising that the state’s carbon market would be up and running by now. If New York waits another year to propose official rules for the program, as Hochul is now suggesting, it likely would not take effect until 2027 — after the November 2026 gubernatorial election, where Hochul is looking at a stiff Republican challenge.

Hochul’s reversal on carbon pricing and the gas transition measure leaves very little in her 2025 agenda for climate groups to get excited about. It could leave the state mostly tinkering around the edges at a time when the incoming Trump administration is promising a massive rollback of federal climate efforts and many are looking to big, blue states like New York to hold the line.

Her briefing book did include a nod to funding clean heating systems known as “thermal energy networks” at SUNY campuses, something that did not make it into last year’s budget despite a push from unions and climate groups. (They would be among the projects funded with Hochul’s promised $1 billion.)

Hochul also announced a plan for “Clean Energy Zones,” where the state would expedite the buildout of electric transmission and generation in a bid to attract big, energy-hungry businesses. The best-known precedent is a Texas program that built transmission lines to remote areas and helped fuel a massive buildout of wind farms there. In New York, the idea has tentative support from major electric utilities as well as public power authorities and the consumer watchdog group Public Utility Law Project of New York. But the Alliance for Clean Energy NY, one of the most prominent groups in the sector, is skeptical — mainly because New York lacks the kind of wide-open spaces that allowed the program to succeed in Texas.

“We don’t want a band-aid solution here. We need a long-term, sustainable funding solution.”

—Kate Courtin, Environmental Defense Fund.

“You could put a circle around any part of New York state, and most things inside that circle would be inappropriate for renewable development. So what are we drawing the circle for?” said the group’s executive director, Marguerite Wells, speaking before Hochul announced the proposal. “You just have to scatter it everywhere.” (Regulators had floated a version of the proposal over the summer.)

Hochul also announced a new “master plan” to develop new nuclear energy in New York, following first steps in that direction over the summer. There is growing agreement among energy experts that at least some new nuclear energy is needed to fully decarbonize the grid, but the technology still faces broad opposition from environmental groups.

There is still room for Hochul to change course, as soon as next week when she proposes her full budget, Edel said.

But that doesn’t look likely. At a moment when they thought they might be standing behind the governor, climate groups are instead getting back into fighting mode.