New York Cap and Invest Status

New York’s Climate Leadership & Community Protection Act (Climate Act) is stalled.  This article updates the current status of NYCI implementation based on a analysis of a comprehensive overview by Samanth Maldonado titled “Green Lawmakers Pressure Hochul to Speed up Action on Climate Act”.

I am convinced that implementation of the New York Climate Act net-zero mandates will do more harm than good if the future electric system relies only on wind, solar, and energy storage because of reliability and affordability risks.  I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 500 articles about New York’s net-zero transition.  The opinions expressed in this article do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.

Overview

The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050.  It includes two 2030 targets: an interim emissions reduction target of a 40% GHG reduction by 2030 and a mandate that 70% of the electricity must come from renewable energy by 2030. The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.”  After a year-long review, the Scoping Plan was finalized at the end of 2022.  Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation. 

The New York Cap-and-Invest Program (NYCI) is a key component of Climate Act implementation.  Before the 2025 State of the State was released, I believed that Governor Hochul would announce the next steps associated with the implementation of NYCI. However, the only mention of NYCI in the speech and in the FY2026 NYS Executive Budget Book noted that in the coming months the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) will take steps forward on developing the cap-and-invest program by proposing new reporting regulations to gather information on emissions sources.  Not surprisingly, Climate Act proponents were outraged. 

Samanth Maldonado’s article Green Lawmakers Pressure Hochul to Speed up Action on Climate Act is a useful summary of the status of NYCI.  I also realized while reading it that some arguments by people she interviewed deserved a response.

Status

Clearly Governor Hochul is having second thoughts about the Climate Act relative to her re-election ambitions in 2026.  Maldonado summarized the political considerations:

But Hochul has had other priorities and expressed a willingness to “rethink” where climate fits into her agenda. Her current main theme is “Making New York State More Affordable,” and the governor has been sensitive to anything that might hit New Yorkers’ wallets. That includes measures that would advance aspects of the climate law — but could also raise household costs.

“It was a different time,” Hochul said in July, noting that the climate law passed under her predecessor, Andrew Cuomo, adding “I can’t be caught in the past of 2019 into 2024 and 2025 and make decisions based on that, because a lot has changed.” 

She called the climate goals “something I would love to meet but also the costs have gone up so much, I now have to step back and say, “What is the cost on the typical New York family?’ just like I did with congestion pricing.”

Maldonado is clearly a believer in the rationale for the Climate, but she acknowledges that things have changed since it was passed:

That law, enacted in 2019, requires the state to drive down planet-warming emissions and shift away from fossil fuels, touching on nearly every sector of the economy and costing a projected $300 billion.  Nearly six years later, the goals at the heart of the CLCPA remain aligned with what climate scientists agree is urgent and necessary to mitigate and adapt to the impacts of a warming globe, but the political and economic environment have changed. Notably, federal funds supporting New York’s progress may disappear thanks to Trump’s federal funding freeze. 

For the record, the $300 billion dollar figure is Hochul mal-information because that figure only includes an unspecified fraction of the total costs and the projection cost methodologies consistently biased the expected costs low.  As to her deference given to Climate Scientists™ Dr. Matthew Wielicki explains that many ignore long-standing scientific norms to push alarmist narratives.

The implementation problems highlighted by Maldonado can be traced back to the fact that there is no plan that includes a feasibility assessment.  She notes that “an advisory group led by state officials came up with a blueprint to achieve the CLCPA, it did not create a spending plan, nor did it prescribe which actions to take first”.  This is because the CAC Advisory Group was made up of individuals chosen by ideology not technical expertise and limited discussion on issues outside of the narrative.  The Hochul Administration has yet to acknowledge that there is a reliability crisis brewing.  The lack of a plan is evident to others too.    

Andrew Rein, president of the Citizens Budget Commission, said that lack of planning and prioritization means it’s hard to know what the most cost-effective emissions reduction strategies or resiliency investments might be.

“We’ve got to pick and choose what we’re going to spend,” Rein said, referring to the state. “People are advocating for positions and keep debating, which makes it hard to be flexible with circumstances and facts as they change. That’s where I think New Yorkers have to come together and say, ‘We have to balance affordability, the economy and environmental needs. What can we do together?’”

I believe that it is time to pause the implementation process be paused until the issues raised bb Rein are addressed, certain technical issues considered, and proposed emission reduction strategies are defined.

Political Climate

In my opinion, the Climate Act has always been more about catering to political constituencies than reducing greenhouse gas emissions.  The failure to launch NYCI is undoubtedly due to political policy discussions. Maldonado points out:

Hochul’s recent announcement indicated the first cap-and-invest rules, related to emissions reporting, would come out by the end of this year. That means the cap-and-invest program wouldn’t likely take effect until late 2026 or sometime in 2027 — after the next election for governor. 

She also notes that:

New York is falling behind on two key requirements of the Climate Act: sourcing 70% of its electricity from renewables like solar and wind by 2030, and reducing planet-warming greenhouse gas emissions 40% below 1990 levels by 2030 (and 85% by 2050). New York is about three years behind the first target and has so far reduced emissions about 9% below 1990 levels, according to the latest data available.

The clean energy advocates also believe that NYCI’s delay is driven by politics:

Hochul’s slow-walking the cap-and-invest program is “110%” tied to her concerns around her reelection prospects, said John Raskin, president of the Spring Street Climate Fund and a political strategist.  “It’s reasonable she wants to take care of people’s immediate needs, but she’s not doing herself any political favors by rejecting or stepping away from climate action,” Raskin said. “If she wants to improve her poll numbers and for people to see her as a leader, she should move forward on climate action while communicating how it helps to meet people’s needs.”

Of course, there are very few people in the state that have a bigger stake in the Climate Act proceeding quickly than Raskin.  The Spring Street Climate Fund “supports high-impact policy campaigns that can make New York a model state for climate progress. We identify opportunities to win scalable climate solutions and invest in the grassroots climate campaigns that can succeed.”  There is nothing in their business model that addresses affordability, reliability, or environmental impacts that affect New Yorkers.

Raskin is not the only one with a vested interest.  Michael Gerrard is the founder and director of the Sabin Center for Climate Change Law at Columbia University.  The Sabin Center would not exist if there were not a problem.  Maldonado quotes a thinly veiled threat from him:

“I think Gov. Hochul was exceeding her authority much as she did when pausing congestion pricing, and DEC has a legal obligation to issue the regulations,” Gerrard said. “Cap and invest would generate revenues that could be used to build more renewable energy and more energy efficiency — things that the federal government is pulling back on.”

Gerrard spearheaded a lawsuit against Hochul’s congestion pricing pause, and now suggests legal action to challenge the cap-and-invest program delay could be on the horizon.

Advocates for NYCI presume that it would be an effective policy that would provide funding and ensure compliance because existing programs worked.  However, I have shown that results from the Regional Greenhouse Gas Initiative show that cap-and-invest programs can raise money but have not shown success in reducing emissions.  My biggest concern is that the draft NYCI documents have not acknowledged these results.  Past results are no guarantee of future success, especially when past results did not produce the results that advocates claim.

The disconnect between reality and New York Progressive politician’s understanding of the energy system and the effects of climate change is even worse.  Moldonado quotes Sen. Pete Harckham (D-Hudson Valley), chair of the Senate Committee on Environmental Conservation:

Harckham countered criticism of the Climate Act by pointing out that climate change impacts have only worsened since the law was enacted. Some investments could save money down the road, he added, a point NYSERDA staff made during public hearings about the CLCPA in years past.

“We need to be redoubling our efforts,” he told THE CITY. “Clean energy is cheaper than fossil fuel energy. I reject the equivalency that this is more expensive. In the long run, this is going to be much less expensive.”

The price on carbon through a cap-and-invest program could increase fuel costs for New Yorkers, including low- and middle-income households, in the short term, but rebates kicking in could result in net savings, according to a state analysis. Two reports issued by environmental groups in January showed how a cap-and-invest program could benefit low-income New Yorkers, depending on its design.

“We are literally showing you research and making a case that we are helping the exact New Yorkers that you say you want to from an affordability angle,” said New York City Environmental Justice Alliance Deputy Director Eunice Ko, who worked on one of the reports. “This is just one tool. We’re not saying it should be the only tool, but we need things like this, absent federal support and federal funding.”

I already explained that the State’s cost numbers are bogus.  The idea that green energy is cheaper than fossil fuel energy is wrong.  The idea that rebates could result in net savings is a favorite talking point but ignores implementation concerns.  People who are having trouble paying for energy now do not have extra money available and will have difficulty waiting for the rebates to get to them.  The claims that NYCI could benefit low-income New Yorkers are a stretch and ignore the fact that some of the money generated by NYCI must be spent to reduce emissions. 

Conclusion

I agree with those who argue that NYCI deployment has been stalled due to political reasons.  I do not agree that is necessarily a bad thing.  While I have no hope that there will be an epiphany within the Hochul Administration that expectations for NYCI must be tempered by reality.  It cannot support funding commitments to dis-advantaged communities, provide enough rebates to make low-income citizens whole, and fund emission reduction programs.  Funding should be guided by the experience gained with the similar RGGI program and the necessity to support emission reductions must be acknowledged.

The reality is that there is no way to simultaneously achieve the Climate Act emission reduction goals and maintain affordability such that it will not be a campaign issue for Hochul.  How she tries to resolve the irreconcilable will be fascinating to watch in the coming months.  Going forward or stalling for time she cannot win.