The Climate Leadership and Community Protection Act (Climate Act) establishes a “Net Zero” target by 2050. The Draft Scoping Plan defines how to “achieve the State’s bold clean energy and climate agenda” and claims that there are significant direct and indirect benefits, including improved public health. This post summarizes all the benefit claims made in the Scoping Plan.
I have written extensively on implementation of the Climate Act because I believe the ambitions for a zero-emissions economy outstrip available technology such that it will adversely affect reliability and affordability, risk safety, affect lifestyles, will have worse impacts on the environment than the purported effects of climate change in New York, and cannot measurably affect global warming when implemented. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. Starting in the fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants. The integration analysis was used to develop the Scoping Plan that was released for public comment on December 30, 2021.
According to a Gothamist summary of the Climate Act: “Seggos, the DEC commissioner, said the draft plan is meant to generate a framework and solicit input on how the state can meet its climate goals, not provide a policy-by-policy cost estimate.” In my opinion, that is a serious shortcoming for the Scoping Plan cost and benefits assessment because a framework is not a feasibility study. Both the costs and benefits are societal estimates. There are no guesses of the direct costs to consumers or rate-payer impacts. Similarly, the benefit values are to society and do not directly offset the ultimate costs to consumers. Until such time that direct consumer costs and benefits are known New Yorkers cannot decide whether it is appropriate to proceed with the ambition and schedule of the Climate Act.
The Scoping Plan estimates societal health benefits and avoided economic damages caused by climate change as a result of GHG emission reductions. Improvements in air quality, increased active transportation, and energy efficiency interventions in low- and middle-income homes generates health benefits ranging from approximately $165 billion to $170 billion. Reduced GHG emissions avoids the economic impacts of damages caused by climate change equaling approximately $235 to $250 billion. The combined benefits range from approximately $400 billion to $420 billion.
This post summarizes all these benefits claims. I have addressed some of them before but this consolidates all the analyses. Complete documentation for this evaluation is contained in the Scoping Plan Costs and Benefits white paper.
Scoping Plan Benefits Summary
The Scoping Plan claims net benefits range from $90 billion to $120 billion. The Plan describes health benefits totaling $165 to $170 billion due to improvements in air quality, increased active transportation ($39.5 billion), and energy efficiency interventions in Low- and Middle- Income (LMI) homes ($8.7 billion). The benefit claims are not documented well enough to confirm those estimates but they appear to be biased high. The claimed benefits for the avoided cost of GHG emissions range between $235 and $250 billion. However, Climate Act guidance incorrectly calculates avoided GHG emissions benefits by applying the value of an emission reduction multiple times. When the multiple-counting error is corrected, the avoided carbon damage benefits range from negative $74.5 to negative $49.5 billion.
The Scoping Plan air quality improvement benefits range between $100 billion and $103 billion for the low values and the high values range between $165 billion and $172 billion. These benefits are due to an air quality improvement for PM2.5 of 0.35 µg/m3 that is supposed to “avoid tens of thousands of premature deaths, thousands of non-fatal heart attacks, thousands of other hospitalizations, thousands of asthma-related emergency room visits, and hundreds of thousands of lost workdays”. However, the modeled impacts rely on a linear no-threshold model. The observed reduction in New York City since 2005-2007 is 5.6 µg/m3 and that is 16 times higher than the projected decrease due to the Climate Act. Using the linear no-threshold model that means that we should be able to observe sixteen times tens of thousands of premature deaths, sixteen times thousands of non-fatal heart attacks, sixteen times thousands of other hospitalizations, sixteen times thousands of asthma-related emergency room visits, and sixteen times hundreds of thousands of lost workdays since 2007. When the Scoping Plan verifies that these reductions have been observed I will accept these benefits.
The Scoping Plan admits that the health benefits from increased active transportation “should be considered a first-order approximation of the benefits of increased active transportation”. The active transportation health theory claims that as people are forced out of their personal vehicles some will switch to walking and biking. Those activities are healthier so there is a benefit. However, the analysis was conducted at the state level, rather than modeling changes in walking and biking activity due to changes in vehicle miles traveled within counties or individual communities. Because the actual number of places where this strategy could actually encourage more walking and bicycling to work is small relative to the state level, the $39.5 billion health benefit claim is far too high.
Upon examination the majority of the health benefits from energy efficiency interventions in LMI homes are the result of “non-energy interventions”. The Climate Act intends to transform the energy sector so it is disingenuous to claim health benefits not directly related to energy efficiency programs themselves. Of the $8.7 billion in benefits claimed $3 billion is due to reduction in asthma-related incidents resulting from better ventilation not directly due to energy efficiency. The $2.4 billion in benefits from reduced trip or fall injuries and reduced carbon monoxide poisoning benefits are non-energy interventions and should not be claimed as benefits for GHG emission reduction programs.
The Scoping Plan claims the largest proposed benefits come from avoided GHG emission impacts on climate change due to emission reductions. The Climate Act Scoping Plan manipulates the emissions, the emissions accounting, and calculation of social cost of carbon benefits to inflate these benefits to claim that there are net benefits. In order to maximize the benefits from emission reductions the Scoping Plan uses non-conventional assumptions to contrive increased emission estimates that are 1.9 times higher in 1990 and 2.3 times higher in 2019 than conventional, or UNFCCC, format for emissions accounting used by other jurisdictions. New York’s Value of Carbon guidance chooses a lower discount rate that places lower value on immediate benefits relative to higher delayed benefits received in the future. The combined effect of the higher emissions and lower discount rate means that New York’s societal benefits of GHG emission reductions are 4.5 times higher for 1990 emissions and 5.4 times higher for 2019 emissions than other jurisdictions.
Even with that gamesmanship the Scoping Plan benefits were too low to claim that benefits out weighed the costs. The Value of Carbon guidance incorrectly calculates benefits by applying the value of an emission reduction multiple times. It is inappropriate to claim the benefits of an annual reduction of a ton of greenhouse gas over any lifetime or to compare it with avoided emissions. Dr. Richard Tol confirmed that “The SCC should not be compared to life-time savings or life-time costs (unless the project life is one year)”. Using that trick and the other manipulations results in New York societal benefits more than 21 times higher than benefits using everybody else’s methodology. When the over-counting error is corrected, the total societal benefits range between negative $74.5 billion and negative $49.5 billion.
The Scoping Plan Costs and Benefits white paper documents the calculation results presented in this summary. The Plan describes health benefits totaling $165 to $170 billion due to improvements in air quality but observed improvements are 16 times greater than those projected for the Climate Act. If the State can show that the health benefits projected have been observed comparable to those observed then this claim holds water. The increased active transportation benefit of $39.5 billion is based on a first-order approximation based on state-wide numbers but the benefits will likely only occur in certain areas. As a result, the benefit estimate is far too high. Energy efficiency interventions benefits in LMI homes are claimed to total $8.7 billion but $2.4 billion of that is from non-energy interventions and should not be claimed as benefits for Climate Act GHG emission reduction programs. If the claims were documented better, I believe that the further reductions in the benefits would be found.
The claimed benefits for the avoided cost of GHG emissions range between $235 and $250 billion. However, Climate Act guidance incorrectly calculates avoided GHG emissions benefits by applying the value of an emission reduction multiple times. The Climate Act manipulates emissions to increase benefits and uses a lower discount rate than current Federal guidance resulting in societal benefits of GHG emission reductions that are 4.5 times higher for 1990 emissions and 5.4 times higher for 2019 emissions than other jurisdictions. The largest impact of the Climate Act for these benefits is based on an incorrect guidance for calculating benefits. In particular, the benefits of reductions are counted multiple times. If only that error is corrected the total benefits range from negative $74.5 to negative $49.5 billion instead of net benefits ranging from $90 billion to $120 billion.
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