Category: Climate Act

New York Affordable Energy Future

Politico’s Marie French recently reported that “Two reports backed by environmental advocates found distributing money raised from a cap-and-trade program would leave households better off.”  New York’s Affordable Energy Future included recommendations for allocating the revenues from the New York Cap-and-Invest program.  I did not address the primary claim but did calculate the expected emission reductions from the investments in the proposed allocations to the reductions needed to meet the Climate Leadership & Community Protection Act (Climate Act) 2030 and 2050 targets.  

I have been involved in the RGGI program process since it was first proposed prior to 2008.  I follow and write about the details of the RGGI program because the results of that program need to be considered for Climate Act implementation.   The opinions expressed in these comments 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 an interim 2030 reduction target of a 40% GHG reduction 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.”  The Scoping Plan was finalized at the end of 2022 and included a recommendation for a market-based economywide cap-and-invest program. 

In response to that recommendation, the New York State Department of Environmental Conservation (DEC) and New York State Energy Research & Development Authority (NYSEDA) have been preparing implementation regulations for the New York Cap-and-Invest (NYCI) program.    The program works by setting an annual cap on the amount of greenhouse gas pollution that is permitted to be emitted in New York: “The declining cap ensures annual emissions are reduced, setting the state on a trajectory to meet our greenhouse gas emission reduction requirements of 40% by 2030, and at least 85% from 1990 levels by 2050, as mandated by the Climate Act.”  In addition to the declining cap, it is supposed to limit potential costs to New Yorkers, invest proceeds in programs that drive emission reductions in an equitable manner, and maintain the competitiveness of New York businesses and industries.  I recently summarized some of my concerns with the proposed program.

My decades long experience with market-based pollution control programs has always been from the compliance side.   Starting with the Acid Rain Program in 1990 I spent 20 years tracking electric generating station emissions, submitting emissions data to EPA, and working internally to assure that the compliance obligations of the company were assured before I retired.  Over that period, DEC and EPA modified the regulations setting the caps on emissions.  I was responsible for evaluating whether the company could meet the new caps.  When EPA set new limits, the new standard was based on an evaluation of what the generating units could do, arguments revolved around whether their assessment was appropriate for individual units, and whether their schedule for implementing the new limits was achievable.  The Climate Act mandates were arbitrary with no regard to feasibility of limits or timing.

One of the concerning elements of NYCI is the near total disregard for the compliance obligations of affected sources.  Last month I evaluated the performance of RGGI relative to compliance obligations in a series of three articles.  In the first article I evaluated Environmental Protection Agency (EPA) emission data and NYSERDA documentation and found that the investments funded by RGGI auction proceeds would have been only 4.2% higher if the NYSERDA program investments did not occur.  In the second article I showed that the cost per ton reduced from the NYSERDA RGGI operating plan investments was $582 per ton of CO2. The final article described the program allocations in the NYSERDA  2025 Draft RGGI Operating Plan Amendment.  I showed that the observed  49% emission reduction since 1990 were primarily due to fuel switching and there are no more fuel switching opportunities available. These analyses also generated a cost per ton of CO2 removed for different NYSDERDA programs that was used in the following analysis.

New York Affordable Energy Future

One of the reports described by Marie French “was produced by Switchbox and paid for by WE ACT for Environmental Justice, Environmental Defense Fund, and Earthjustice”.  The recommended citation is

Smith, Alex, Rina Palta, Max Shron, and Juan-Pablo Velez. 2025. “New York’s Affordable Energy Future.” Switchbox. January 13, 2025.  I will refer to the report as Smith et al., 2025.  I asked Marie about Switchbox and she explained that it was “set up basically to do research for environmental groups in NY/other parts of the country. The project is described by Earthjustice here. 

This kind of report bothers me because it is grey literature.  One description of grey literature emphasizes the point that it is not subject to peer review but another claims that “it may be the best source of information on policies and programs”.  My problem with grey literature performed at the behest of environmental advocacy organizations is that those organizations promote the results without acknowledging the biases.  Incredibly, these reports have impacted New York policy.  Policy makers cite these works without critical appraisal of the analyses and citations used. The biggest problem is when policy makers neglect to account for potential publication bias when including grey literature in their decision-making process.  Of course, I must admit that all of my work is grey literature.  The reason that my articles are so long is because I provide the background and data necessary for my readers to assess my results and conclusions.  I included this discussion because this report is unique as it is only available on-line at the Switchbox website.  That makes assessment of their analysis and data more difficult which I think is the point of that approach.

Program Allocations

French notes that this report focuses on how the revenue from “cap and invest” should be spent and how households could benefit from electrifying their homes.  Two revenue scenarios corresponding to the range of expected proceeds proposed by NYSERDA and DEC were analyzed:

  • Scenario A would set a $24 per-unit ceiling on allowances in 2025, rising to $26 in 2026, $58 in 2027, and by 6% annually thereafter.
  • Scenario C would set a $14 per-unit ceiling on allowances in 2025, rising to $15 in 2026, $27 in 2027, and by 6% annually thereafter.

Smith et al., 2025 state that:

In 2030, the state would collect $6 billion in NYCI revenue under scenario C, and $13 billion under scenario A.

These sums would cover 54 – 115% of NYSERDA’s 2030 cost estimate and are equivalent to 3 – 5% of New York State’s $237 billion 2025 budget.

Their proposed funding scenario allocates resources to seven categories (Table 1).  In the revenue projections examined by the report, NYCI would raise a total of between $61 – $126 billion over the first 11 years of the program. 

Table 1: Funding by program under proposed spending program with 11-year total revenues

The NYSERDA RGGI Funded Program Status reports provide estimates of the effectiveness of the programs that NYSERDA manages using RGGI proceeds.  Table 2 uses data from NYSERDA’s Table 2. Summary of Expected Cumulative Annual Program Benefits through December 31, 2023 in the most recent status report.  The costs and emission savings columns in Table 2 are directly from the NYSERDA report.  I assigned different NYSERDA programs to the proposed programs in Smith et al., 2025 in the remaining columns. For example, the NYSERDA Charge New York programs support infrastructure deployment for electric vehicles.  I summed up all the relevant costs and benefits and calculated a cost effectiveness for each category by dividing the total costs by the expected emission savings:

  • Transportation: $917 per ton of CO2e removed
  • Commercial Decarbonization: $446 per ton of CO2e removed
  • Residential Decarbonization: $457 per ton of CO2e removed
  • Place-based Investments: $239 per ton of CO2e removed

Table 2: Summary of Expected Cumulative Annualized Program Benefits through 31 December 2023 Categorized by Smith et al, 2025 NYCI Proposed Programs

Combining these data, it is possible to determine how effective the proposed allocations will be for providing the emission reductions necessary to meet the Climate Act goals.  The expected reductions in each for each program equal the funds available divided the cost per ton expected.  The question is whether the investments will achieve compliance.   The Scoping Plan did not provide a schedule for emission reductions expected for their reduction strategies, so we must do our own estimate.  In 2022, the total GHG emissions for New York equaled 371.08 million tons.  In 2030 GHG emissions must meet a 40% reduction of 1990 emissions or 294.07 million tons.  To get to that level emissions must go down 9.6 million tons per year.  For Scenario A we expect to reduce emissions 119.63 million tons and there is a surplus of 13.75 million tons over the 11 year period total to reach the 2030 target.  However, Scenario C does not meet the target and the 2050 target will not be met for either scenario.

Table 3: Funding by program , expected cost efficiency and projected 11-year reductions

Discussion

While most advocates do not acknowledge that cap-and-invest programs probably will not guarantee compliance with the emission reduction goals, this report did.  One of the features of the proposed program is a price ceiling on the allowance cost that will limit the impact on consumers.  Smith et al., 2025 note that “This is why economists often describe a price ceiling as converting cap-and-trade into a carbon tax at that price point.”  In my opinion NYCI is simply a re-branded carbon tax.  The authors’ described price ceilings:

However, they have the effect of weakening the cap: if the auction price ended up being higher than the price ceiling for a given year, the state would sell unlimited allowances at the ceiling price, resulting in more allowances sold than the cap would otherwise allow.

Price ceilings therefore sacrifice the state’s ability to control the level of climate pollution in exchange for the ability to control the price of climate pollution. A declining cap would thus be unable to single-handedly decarbonize New York by 2050, and Cap-and-Invest would need to be paired with complementary policies.

There is a reference to the last sentence that states “As documented in the book Making Climate Policy Work (Cullenward and Victor 2020), this is true of all real-world cap-and-trade systems.”  In a recent article I made the same point that Cullenward and Victor believe that the level of expenditures needed to implement the net-zero transition vastly exceeds the “funds that can be readily appropriated from market mechanisms”.  The numbers derived from the New York RGGI experience corroborates that conclusion. 

I worry that there are limited emission reduction options for the compliance entities.  There are no add-on controls that can achieve zero emissions for any sector.  The only strategy is to convert to a different source of energy which takes time because some components are out of the control of the entity that is responsible for compliance.  For example, fuel suppliers are responsible for transportation sector compliance, but the strategy is to convert to zero-emission vehicles.  They have no control over that.  As noted previously, the Climate Act schedule was determined by politicians.  I have long argued that New York needs to do a feasibility study to confirm that the Scoping Plan emission reduction strategies themselves and the arbitrary schedule of the Climate Act are possible. 

The problem with NYCI is that it establishes a compliance schedule.  If the schedule or the reduction technologies are not feasible, then there will be compliance implications.  Organizations are unwilling to knowingly violate compliance requirements because the programs are designed to severely penalize non-compliance.  The only remaining option for the fuel suppliers to ensure compliance is to simply stop selling fuel.  I do not think that the resulting artificial energy shortage will be received well by anyone.

I did not address any aspects of the Smith et al., 2025 analysis other than the compliance obligation aspect.  This analysis shows the investments from the NYCI program cannot achieve the annual emission reduction rate necessary to meet the 2050 goal but for the highest revenue scenario the rate could be achieved.  This does not mean that NYCI investments will ensure that the 2030 goal can be met.  The program hasn’t even been proposed.  There won’t be any revenues available until 2026 and the programs need to be proposed, contracts let, and deployment started before there will be any emission reductions. Frankly, I doubt that there will be any meaningful emission reduction from NYCI investments by 2030.  This finding emphasizes the need for a pause in implementation until the funding requirements for meaningful reductions are identified.

I expect to follow up with another post on this report later to address the main claim that the higher revenue scenario would “reduce household costs”.

Conclusion

The Smith et al., 2025 analysis proposes an allocation scheme for NYCI revenues.  I did not address the specifics of their proposal.  My interest was the acknowledgement of the Cullenward and Victor work that persuasively argues that the level of expenditures needed to implement the net-zero transition vastly exceeds the “funds that can be readily appropriated from market mechanisms”.  The performance of NYSERDA investment of RGGI proceeds confirms that argument. 

The biggest question is the appetite of New Yorkers to accept a $13 billion-dollar annual carbon tax whatever the investment benefits claimed.  Governor Hochul will be running for re-election in 2026 so I believe the political machinations regarding costs will be the over-riding factor in the choice of the allowance ceiling price and the costs to consumers.  Unacknowledged by most are the compliance obligations that could have massive unintended consequences.  Stay tuned.

New York Cap-and-Invest Issues to Resolve in 2025

After spending most of my time dealing with the December rush of comments submitted for various Climate Leadership & Community Protection Act (Climate Act) initiatives, I finally have time for issues that I would like to see resolved in 2025.  At the top of the list are concerns associated with the New York Cap-and-Invest Program (NYCI).

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 490 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 an interim 2030 reduction target of a 40% GHG reduction by 2030. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040. 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.” The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantified the impact of the electrification strategies.  That material was used to develop the Draft Scoping Plan outline of strategies.  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. 

There are many issues that remain unresolved even while the Hochul Administration rushes ahead to build as much solar, wind, and energy storage as possible as quickly as possible.  This post poses questions related to NYCI;

The CAC’s Scoping Plan recommended a market-based economywide cap-and-invest program.  The program works by setting an annual cap on the amount of greenhouse gas pollution that is permitted to be emitted in New York: “The declining cap ensures annual emissions are reduced, setting the state on a trajectory to meet our greenhouse gas emission reduction requirements of 40% by 2030, and at least 85% from 1990 levels by 2050, as mandated by the Climate Act.”  In addition to the declining cap, it is supposed to limit potential costs to New Yorkers, invest proceeds in programs that drive emission reductions in an equitable manner, and maintain the competitiveness of New York businesses and industries.  

New York Cap-and-Invest Concerns

The draft cap-and-invest rule was originally slated for release in summer 2024 after the last public comment period ended in March 2024.  The first question is when are the regulations going to come out?  At the August 2024 Update on the New York Cap-and-Invest Plan  the following slide was included that states that the “Allocation of funds will be finalized through State Budget Process.“   Consequently, I believe that the NYCI regulations will be released in conjunction with the State Budget process that will consume everyone’s attention in Albany for the next couple of months.

There are many questions related to how NYCI fund allocation would be done.  At the top of that list is the revenue goals.  I don’t see any way to include something in the budget unless they estimate costs.  Do not ever forget that these climate initiatives are primarily about scoring political points.  Governor Hochul appears to have figured out that the costs of implementing the Climate Act are enormous.  I am sure that packaging the costs of NYCI as a benefit and not just another tax is a major reason why the regulations have been delayed.  The resulting question is how much will this cost?

Two years ago, the Hochul Administration floated the idea of changing the GHG emissions accounting to the one used by nearly every jurisdiction in the world. That would enable New York to participate in trading programs with other jurisdictions, eliminate the need to develop an entirely new accounting framework, and would reduce the number of allowances in the auction.  The last reason was the primary driver because it was alleged that it would reduce costs.  There was immediate and intense blowback from environmental organizations and the proposal was dropped.  I would not be shocked if it reappears.  It is fair to ask how New York will ever be able to participate with other jurisdictions as long as New York insists on a unique accounting system.

The Regional Greenhouse Gas Initiative (RGGI) is often cited as a model for the NYCI program, but last month I showed that RGGI electric sector performance and New York State Energy Research & Development Authority (NYSERDA) investment effectiveness raise concerns.  I question whether NYCI can improve on the results shown in NYSERDA reports that indicate RGGI has not been a very effective emission reduction mechanism.

  • I evaluated Environmental Protection Agency (EPA) emission data and NYSERDA documentation.  The figure below shows that electric sector economic fuel switching from oil and coal to natural gas is the primary reason for the observed reduction in emissions.  It also shows that there are no more fuel switching emission reductions possible.
  • On a regular basis NYSERDA publishes a status update of the progress of their program activities, implementation, and evaluation.   According to the latest update, the total cumulative annual emission savings due to NYSERDA program investments of RGGI proceeds through the end of 2023 is 1,976,101 tons.  That means that emissions from RGGI sources in New York would have been only 4.2% higher if the NYSERDA program investments did not occur.  I showed that according to the report, cumulative combined costs for those programs was $1,149 million which means that the cost per ton reduced is $582.
  • I also showed that the results in the Funding status reports show that since the start of the program NYSERDA has allocated 10% of its investments to programs that directly reduce utility emissions by 199,733 tons, 58% to programs that indirectly reduce utility emissions by 1,205,780 tons, and 32% to programs that will increase utility emissions by 678,804 tons.  When those savings that do not affect RGGI source emissions are removed, total savings are 1,297,297 and the emissions from RGGI sources in New York would have been only 2.8% higher if the NYSERDA program investments did not occur.
  • The proposed NYSERDA Amendment to the RGGI Operating Plan allocates only 22% to programs that directly, indirectly, or could potentially decrease RGGI-affected source emissions.  Programs that will add load that could potentially increase RGGI source emissions total 37% of the investments.  Programs that do not affect emissions are funded with 29% of the proceeds and administrative costs total another 8%. 

The proposed Amendment to the RGGI Operating Plan indicates that NYSERDA has not incorporated the need to fund RGGI emission reduction programs now that fuel switching is no longer an effective option.  Before we start implementing NYCI it is appropriate to check on implementation plans for RGGI.  Where does NYSERDA expect the emission reductions necessary for RGGI compliance to come from?

With respect to NYCI and the non-electric sector economy, there are no fuel switching opportunities that will save fuel costs.  Has NYSERDA determined how much auction revenue is needed to fund the emission reduction strategies necessary to meet the Climate Act mandates?  When that amount is combined with the mandates c to fund benefits to disadvantaged communities and Hochul Administration promises for rebates what is the expected starting cost for the allowance auctions? According to the latest GHG emission inventory, the 2022 GHG emissions were 371.08 MMT CO2e and need to reach 245.47 by 2040 which means that NYS must reduce emissions by 33.8% over 18 years.  Will NYCI target auction prices increase to make up for the reduced number of allowances?

In addition to these relatively broad issues there are numerous technical concerns.  NYCI is supposed to be an economy-wide program.  Does that mean every sector will participate?  The electric sector is already covered by RGGI.  Will the electric sector be exempt from NYCI or will there be some accounting mechanism to ensure that ratepayer don’t pay twice. 

There are technical issues associated with timing for the start of the program.  The 2024 Statewide GHG Emission Report released at the end of December covers data from 1990 to 2022.  RGGI emissions are reported by the end of the following January and compliance determined 30 days later.  Will NYCI mandate reporting similar to that schedule or one compatible with the official inventory.  I spent more time than I care to remember dealing with emission inventories during my career and a major concern was compatibility.  How will that be resolved in NYCI considering the report timing?

Discussion

California was the first in the nation legislate a “solution” to climate change with its AB32 Global Warming Solutions Act of 2006.  I recently posted an article describing the Breakthrough Journal article by Jennifer Hernandez and Lauren Teixeira entitled Time to reset California’s climate leadership.  After fourteen years the inevitable effects of reality are getting the attention of the politicians that supported the law.  The authors explained:  

California’s Democratic Assembly leader Richard Rivas opened the new Legislative session signalling a strong focus on meeting voter concerns about housing and the state’s extraordinarily high cost of living, specifically calling out the state’s climate policies: “California has always led the way on climate. And we will continue to lead on climate,” he told his Assembly colleagues. “But not on the backs of poor and working people, not with taxes or fees for programs that don’t work, and not by blocking housing and critical infrastructure projects. It’s why we must be outcome driven. We can’t blindly defend the institutions contributing to these issues.”

I think it is incumbent upon the Hochul Administration to consider whether the Climate Act will have similar impacts to New York.  My analysis of the RGGI program indicates that RGGI is a hidden tax that is not working as advertised.  My overarching concern is that any increase in costs is regressive and affects those least able to afford them the most.  The Hochul Administration has included promises to reduce those impacts, but the reality is that it is easier said than done.  For example, rebates to those adversely affected will lag payments and there is the danger that many in need will not get rebates. 

New York’s stakeholder process is another hinderance to effective policy.  Comments submitted go off into the bureaucracy and there is no indication which comments are addressed and how.  When the regulations come out agencies are not allowed to discuss issues.  Revolving issues requires dialogue, and the New York process effectively shuts that down. 

There is another stakeholder issue.  The desire for inclusivity is a laudable goal and the State has committed to encouraging participation by constituencies that claim that past practices have ignored their concerns.  In theory that is great.  In practice, if those aggrieved parties demand zero impacts and are unwilling to consider compromises or the existing structure of environmental protections, then the stakeholder process gets mired down, off track, and becomes ineffective.  The Hochul Administration has yet to resolve that problem.

Conclusion

The premise for NYCI was that it would be an effective policy that would provide funding and ensure compliance because existing programs worked.  The RGGI program results show that cap-and-invest programs can raise money but have not shown success in reducing emissions.  My biggest concern is that NYCI has not acknowledged this problem.  Past results are no guarantee of future success, especially when past results are not triumphs.  This is another instance where I believe that the Climate Act implementation will do more harm than good.

California Tipping Point

A slightly different version of this post appeared at Watts Up With That.  If this topic interests you I suggest that you check out the comments there too.

I recently posted an article describing how the Breakthrough Journal article by Jennifer Hernandez and Lauren Teixeira entitled Time to reset California’s climate leadership was relevant to New York State Climate Leadership & Community Protection Act (Climate Act) implementation.  I agree with the authors that both states need to reevaluate their climate policies until the states can cut “emissions while assuring that home ownership, an affordable cost of living, and good jobs are available to all.”  This post highlights a remarkable description of what is needed to reduce transportation sector emissions on the way to climate nirvana. 

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 490 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 Leadership & Community Protection Act (Climate Act) established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050.  It includes an interim 2030 reduction target of a 40% GHG reduction by 2030. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040.  Since the completion of the Scoping Plan at the end of 2022 New York has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation. 

California Climate Leadership

California was the first in the nation legislate a “solution” to climate change with its AB32 Global Warming Solutions Act of 2006.  After fourteen years the inevitable effects of reality are getting the attention of the politicians that supported the law.  Hernandez and Teixeira’s introductory paragraph explains that:

Faced with the election of Donald Trump to a second term, soaring inequality, and a decline in support from the state’s non-white majority, California’s Democratic leaders have begun asking hard questions about the state’s vaunted climate policies. California’s Democratic Assembly leader Richard Rivas opened the new Legislative session signalling a strong focus on meeting voter concerns about housing and the state’s extraordinarily high cost of living, specifically calling out the state’s climate policies: “California has always led the way on climate. And we will continue to lead on climate,” he told his Assembly colleagues. “But not on the backs of poor and working people, not with taxes or fees for programs that don’t work, and not by blocking housing and critical infrastructure projects. It’s why we must be outcome driven. We can’t blindly defend the institutions contributing to these issues.”

Hernandez and Teixeira compared several metrics for California, Florida, Texas, and the United States to determine how successful California’s claim to lead the way on climate has been. They explained that:

California’s claims to eco-superiority long predate the passage of AB32, the 2006 law that committed the state to ambitious climate targets and established a cap-and-trade system by which to achieve them. Even before this landmark bill, the state’s per capita carbon emissions were far lower than the national average.

The authors show that a primary reason for California’s low per capita emissions was because their electric sector emissions were low to start.  Texas and Florida reduced their electric sector emissions without climate policies because generating units “transitioned from coal to natural gas for largely economic reasons”.  California’s climate policies limit future generation technologies to solar, wind, and battery storage.  The unanticipated costs associated with deploying those technologies has made California electricity prices second only to Hawaii. 

In my previous article I compared California to New York.  New York observed emission reductions also occurred because of natural gas fuel switching.  The deployment costs for wind, solar, and energy storage are starting to become obvious and will force rates up to compete with California and Hawaii as the most expensive.  Another similarity is that both California and New York are going to have to find emission reductions from other sectors going forward.  The sector with the most emissions in California is transportation and, because of the climate difference, the building sector has the highest emissions in New York.  Transportation emissions are only slightly lower.  This article highlights the description by Hernandez and Teixeira of what emissions reduction strategies are planned for the California transportation sector to meet their climate goals.

Transportation Sector Strategies

Hernandez and Teixeira raised an issue that has been acknowledged by New York agencies but very few understand the implications.  Future emission reductions won’t come from the electric sector because the incremental benefits are small:

The rooftop solar and other signature California climate policy choices, despite their rising cost, increasingly brought diminishing returns, as much of the easy emissions reductions had already been realized, thanks to lower baseline electricity consumption and early adoption of natural gas. Carbon emission reductions from expensive new renewable energy additions were never going to be large. The state therefore increasingly prioritized aggressively reducing emissions from the transportation sector—the state’s largest source of emissions.

In New York the building sector is the largest source of emissions because of our climate.  Nonetheless the Climate Act targets are so extreme that New York and any other jurisdiction that wants to go to net zero must eventually pursue the same aggressive transportation sector reduction strategies espoused by California:

Compared to places like Texas and Florida, California’s emissions reductions since 2006 have come disproportionately from the transportation sector, not the electricity sector. Low carbon fuel requirements, new regulations on refineries, and electric vehicle mandates, have collectively increased the cost of driving substantially. California routinely now has the second highest gas costs in the country second only to Hawaii, which must import all of its gasoline by ship. The state has mandated the phase-out of internal combustion engines in vehicles by 2035 and its gasoline prices now seems poised to surpass even Hawaii: a few days after the election, the California Air Resources Board (CARB) voted to further tighten the Low Carbon Fuel Standard, a measure that is expected to further increase gas prices by up to 85 cents per gallon.

I find it hard to believe that Californians are going to passively accept those massive increases in gasoline costs.  But that is not all.

Even more ambitiously, California’s climate regulators have demanded that even after California converts to electric vehicles, local governments and regional planning agencies should reduce automobile use by 30%—a reduction in “vehicle miles travelled” that would be 2.5 times greater than the decline in miles driven during the depths of the Covid pandemic lockdown. To achieve this objective, CARB recommends and provides funding for local governments to eliminate traffic lanes through so-called “road diets,” intended to increase drive times and traffic congestion and incentivize use of public transit, even as massive investments in public transit have failed to reverse ridership declines that began pre-COVID and have caused massive transit system operating deficits.

Discussion

The mother of all reality slaps is coming to the regulators that think that road diets will be accepted by citizens.  Public transit is fine in concept, but the reality is that our society is now dependent upon personal transportation for most of the country. One hundred years ago there was an extensive network of trolley and interurban railroads in every city and the cities were compact enough that this transit option was viable.  By viable I mean that people could get from where they lived to where they worked using transit in a reasonable amount of time.  However, one hundred years ago those trolley systems started to go out of business because relying on public transit is inconvenient.  Most of those systems are gone now.   Even when replaced by bus systems, the fact is that public transit takes more time and using it forces you into a schedule.  Over the last 100 years development has spread out and the ability for public transit to get many people from where they live to where they work is limited to major cities.  This makes personal transportation demand inelastic.  Only fools think that road diets are going to incentivize the use of public transit.  This affects the emission reduction goals because the reductions in transportation sector emissions envisioned are never going to happen.

Conclusion

I hope that frequent visitors to my blog are aware of the difficulties associated with the net-zero transition plans imposed by reality.  When you are aware of the physical challenges the inevitable impacts on personal choice and quality of life of the transition policies become evident.  Unfortunately, most people are unaware of what is coming at them.

The public is faced with incessant propaganda that there is an existential climate crisis that is evident in every extreme weather event.  All they hear is the lie that fixing the weather is only the simple matter of stopping the use of fossil fuels which will be cheaper, more resilient, more secure, and improve the quality of life. 

California fossil fuel transition plans include policies “intended to increase drive times and traffic congestion and incentivize use of public transit”.  Eventually that will seep into the consciousness of the public.  I cannot imagine a scenario where this will not create massive blowback.  Will the charade end in California when the wind and solar system causes a massive blackout or when Californians are required to pay 85 cents more per gallon, or they are required to give up personal transportation options?  Hopefully California will hit the green transition wall soon enough and hard enough that New York policies will change before the impacts seen there inevitably arrive here.

Time for Resets in California and New York

The Breakthrough Journal published an article by Jennifer Hernandez and Lauren Teixeira entitled Time to reset California’s climate leadership that I think is relevant to New York.  I have recently argued that because there are so many unanswered questions and unresolved issues that the logical next step for New York is to pause in Climate Leadership & Community Protection Act (Climate Act) implementation until we understand how to decarbonize our electric system without adversely affecting affordability and current reliability standards.   Hernandez and Teixeira come to the same conclusion but with arguments that I have not made but are applicable to New York too.

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 490 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 an interim 2030 reduction target of a 40% GHG reduction by 2030. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040.

Responsible New York agencies all agree that new Dispatchable Emissions-Free Resource (DEFR) technologies are needed to make a solar and wind-reliant electric energy system work reliably during periods of extended periods of low wind and solar resource availability.  Because DEFR is needed and because we don’t know what technology can be used, I think that the Climate Act schedule needs to be paused.  In that light I was interested in this article calling for California to “go back to the drawing board”.

Jennifer Hernandez and Lauren Teixeira are both well versed in California energy policies.  Hernandez has practiced land use and environmental law for more than 30 years and has received numerous civil rights awards for her work on overcoming environmentalist opposition to housing and other projects needed and supported by minority communities.  Teixeira is a Climate and Energy Analyst with the Breakthrough Institute. 

California Climate Leadership

California was the first in the nation legislate a “solution” to climate change with its AB32 Global Warming Solutions Act of 2006.  After fourteen years the inevitable effects of reality are getting the attention of the politicians that supported the law.  The introductory paragraph explains:

Faced with the election of Donald Trump to a second term, soaring inequality, and a decline in support from the state’s non-white majority, California’s Democratic leaders have begun asking hard questions about the state’s vaunted climate policies. California’s Democratic Assembly leader Richard Rivas opened the new Legislative session signalling a strong focus on meeting voter concerns about housing and the state’s extraordinarily high cost of living, specifically calling out the state’s climate policies: “California has always led the way on climate. And we will continue to lead on climate,” he told his Assembly colleagues. “But not on the backs of poor and working people, not with taxes or fees for programs that don’t work, and not by blocking housing and critical infrastructure projects. It’s why we must be outcome driven. We can’t blindly defend the institutions contributing to these issues.”

Hernandez and Teixeira compared several metrics for California, Florida, Texas, and the United States to determine how successful California’s claim that they lead the way on climate has been. They explained that:

California’s claims to eco-superiority long predate the passage of AB32, the 2006 law that committed the state to ambitious climate targets and established a cap-and-trade system by which to achieve them. Even before this landmark bill, the state’s per capita carbon emissions were far lower than the national average.

Table 1 compares the data from CA, FL, TX, and the US along with New York and the original ten Regional Greenhouse Gas Initiative (RGGI} states.  I included the RGGI states because they also claim to be climate mitigation leaders.  The authors chose to compare current emissions to 2006 when California’s landmark climate law AB32 was passed.  I analyzed Energy Information Administration  data and added two other years. I included 1990 because that is the base year for most net-zero transition programs and 2000 because that has been used by New York State in recent analyses.  The results show that New York is close to California for most years. Note that compared to the other jurisdictions New York is the worst performer almost every year.

Table 1: Per capita energy-related carbon dioxide emissions

Hernandez and Teixeira explained the reason for the decreases was the same as what I have found in New York:

The reason why states like Texas and Florida were able to reduce greenhouse gas emissions with practically no climate policy to speak of is quite simple: natural gas. Emissions reductions in Texas and Florida were driven by the electricity sector, which had transitioned from coal to natural gas for largely economic reasons. Indeed, by 2017, 41 out of 50 U.S. states had decoupled economic growth from emissions, a phenomenon widely attributed to this transition.

New York politicians were undoubtedly influenced by California’s AB32 because we have similar restrictions on the what technologies were acceptable for reducing GHG emissions:

Along with its climate commitments, California’s political leaders also decreed that further carbon emission reductions in the electricity sector would need to be achieved with a limited suite of renewable energy technologies: solar, wind and battery storage. (Both legacy technologies like hydropower and nuclear, and technologies considered renewable in other states and countries such as biomass, did not meet the state’s narrow definition of “renewable” energy.)

This decision had consequences. Costly renewable energy power purchase agreements, combined with the expense of integrating intermittent resources into the grid, helped to make California’s retail electricity prices the highest in the country (second only to Hawaii). Meanwhile, the state’s remarkable rate of rooftop solar adoption—due to the combination of costly retail electricity, generous state subsidies to often-wealthy homeowners, and rooftop solar mandates—ended up raising electricity prices still further, pushing costs disproportionately onto renters and low-income households who do not have their own rooftop solar.

Given California’s fourteen-year head start I am not surprised that New York’s rates have not shown comparable increases, but double-digit rate case settlements and all the other costs required for the transition will inevitably show similar impacts at some point.  The important point made here is that California’s policies have disproportionately increased costs for those least able to afford it.  I have always thought that was a likely outcome but here is proof.

Decarbonization at the expense of growth and civil rights?

In the introduction, Hernandez and Teixeira quoted Speaker of the Assembly Richard Rivas who said “California has always led the way on climate. And we will continue to lead on climate, but not on the backs of poor and working people, not with taxes or fees for programs that don’t work, and not by blocking housing and critical infrastructure projects.”  The authors also addressed his concerns about effects of AB32 on the economy.

At first glance, California’s impressive economy—the world’s fifth largest, as state officials are fond of reminding the press and populace—would seem to vindicate its climate policy, demonstrating by virtue of its enormity that economic prosperity and deep decarbonization can coexist.

But the state’s wealth masks some troubling trends. While growth in California has significantly outstripped the rest of the country, it has been highly concentrated in just a few high-income places. Since 2001, California’s real GDP has grown by 82%–23 percentage points higher than the U.S. average of 55%. This difference disappears, however, when you take out the three Bay area counties that house Silicon Valley. Bolstered by four of the world’s seven companies with trillion dollar valuations, real GDP in these counties rose at four times the rate of the U.S. average. This remarkable and hyperlocal rise accounted almost entirely for California’s above-average growth:

New York proponents of the Climate Act also trot out New York’s economy relative to the world but don’t mention recent growth.  New York does not have the benefit of four massively successful companies so growth is much worse than California.  Hernandez and Teixeira note that even with those companies, recent growth is problematic:

But even with massively outsized contributions from Silicon Valley, California’s growth in recent years is not very impressive. Between 2017 and 2023, real GDP in California grew by only 18.5%, slightly above the national average (15.6%), and well behind real GDP in red state competitors Texas (25.7%) and Florida (27.3%).

I dug up some comparable gross state product numbers for New York.  Between 2017 and 2023 the gross state product only grew by 10%, well behind all three states and the nation.  Hernandez and Teixeira broke down growth by county and showed that the growth was unevenly distributed.  They also showed there was a racial disparity to growth.  I could not find similar data for New York, but I don’t think it is a stretch to imagine similar patterns are present in New York.

Hernandez and Teixeira also noted that growth is affected by environmental regulations:

California’s strict environmental regulatory regime has not helped to improve this unbalanced state of affairs; in fact, it has likely exacerbated it. Despite abundant natural reserves, the state’s once-mighty oil production industry—a source of well-paying jobs for non-college educated workers—is threatened with terminal decline due to a hostile regulatory environment. After 145 years in California, Chevron is moving its headquarters to Texas.

New York’s ban on hydraulic fracking has certainly limited growth in the same way.  The authors addressed other issues raised by Speaker of the Assembly Richard Rivas.  In both examples, the situation in New York is identical:

Conclusion

Hernandez and Teixeira summed up by making several points:

  • Considering California’s environmental and economic record since 2006, one can reasonably conclude one of two things: either it is not possible to achieve deep emissions reductions without slowing growth and making economic inequality worse, or California is doing something wrong.
  • California’s climate policies have contributed to slow economic growth for most of the state and have disproportionately punished the poor and non-college educated workers.
  • Until the state demonstrates that it can cut its emissions equitably, such that working people once more see the Golden State as a land of opportunity rather than fleeing it, California should not be held up as a model of climate governance.
  • Expensive policies, supported by high end keyboard economy tax revenue, are simply not exportable to the rest of the country, much less the rest of the world.

Buried somewhere in the Climate Act language is a mandate for New York to consider what is happening at other jurisdictions who are developing their own net-zero transition plans.  Typically, California is considered an example of what we should be doing.  In this instance I agree with the conclusion of Hernandez and Teixeira that: “While some state leaders may still be tempted to double down on current climate policies, the state, its political leaders, its economy, and the climate will be far better served by going back to the drawing board—as Speaker Rivas has urged.”  I also think that New York would be well served by their recommendation: “California’s claims to climate leadership now depend not upon proving that the state is willing to cut its emissions at any cost but rather demonstrating that it can cut its emissions while assuring that home ownership, an affordable cost of living, and good jobs are available to all.”

Climate Science New Year Rant

As I age, I am becoming less willing to play along with the Climate Leadership & Community Protection Act (Climate Act) narrative that there is an existential threat to mankind from man-made climate change and that an energy system that relies on wind, solar, and energy storage can solve that threat.  One aspect of playing along is to appease supporters by accepting that there is a reason to reduce GHG emissions and agreeing that solar and wind resources should be part of the future electric energy system.  Ron Clutz’s recent article “Lacking data, climate models rely on guesses” included information that spurred this article.

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 480 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.

The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050.  The authors of the Climate Act believed that “our State could rapidly move away from fossil fuels and instead be fueled completely by the power of the wind, the sun, and hydro” and that “it that it could be done completely with technologies available at that time (a decade ago)”.  In my opinion we need a feasibility analysis to determine if this presumption is correct.  This article addresses the questions: should we be trying to reduce GHG emissions in hopes of affecting the climate and even if we accept that decarbonization is a worthy goal should we try to rely on wind and solar.

Is There an Existential Threat?

Keep in mind that climate models provide all the evidence that there is an existential threat.  Despite the constant claims in the main stream media, attributing extreme weather events to man-made climate change is a claim no one without a vested interest in that answer is willing to make.  Ron Clutz’s recent article “Lacking data, climate models rely on guesses” described the response to a question about climate model accuracy by Dr. Keith Minor.  The following is parts of the summary from Ron’s post.

A recent question was posed on  Quora: Say there are merely 15 variables involved in predicting global climate change. Assume climatologists have mastered each variable to a near perfect accuracy of 95%. How accurate would a climate model built on this simplified system be?  Keith Minor has a PhD in organic chemistry, PhD in Geology, and PhD in Geology & Paleontology from The University of Texas at Austin. 

Minor responded with bolds by Clutz:

I like the answers to this question, and Matthew stole my thunder on the climate models not being statistical models. If we take the question and it’s assumptions at face value, one unsolvable overriding problem, and a limit to developing an accurate climate model that is rarely ever addressed, is the sampling issue. Knowing 15 parameters to 99+% accuracy won’t solve this problem.

The modeling of the atmosphere is a boundary condition problem. No, I’m not talking about frontal boundaries. Thermodynamic systems are boundary condition problems, meaning that the evolution of a thermodynamic system is dependent not only on the conditions at t > 0 (is the system under adiabatic conditions, isothermal conditions, do these conditions change during the process, etc.?), but also on the initial conditions at t = 0 (sec, whatever). Knowing almost nothing about what even a fraction of a fraction of the molecules in the atmosphere are doing at t = 0 or at t > 0 is a huge problem to accurately predicting what the atmosphere will do in the near or far future.

These problems boil down to the challenge of measuring the meteorological parameters necessary to initiate weather and climate models.   The reference to t = 0 relates to the start time of the model. Minor explains that there are many sources of variability within the models themselves too including:

  • The inability of the models to handle water (the most important greenhouse gas in the atmosphere, not CO2) and processes related to it;  e.g., models still can’t handle the formation and non-formation of clouds;
  • The non-linearity of thermodynamic properties of matter (which seem to be an afterthought, especially in popular discussions regarding the roles that CO2 plays in the atmosphere and biosphere), and
  • The always-present sampling problem.

Minor goes on to describe how these issues affect weather forecasting and how more sampling could improve certain forecasts.  He concludes:

So back to the Quora question, with regard to a cost-effective (cost-effect is the operational term) climate model or models (say an ensemble model) that would “verify” say 50 years from now, the sampling issue is ever present, and likely cost-prohibitive at the level needed to make the sampling statistically significant. And will the climatologist be around in 50 years to be “hoisted with their own petard” when the climate model is proven to be wrong? The absence of accountability is the other problem with these long-range models into which many put so much faith.

Clutz also references a quote by esteemed climate scientist Richard Lindzen that I think sums up whether we should rely on climate models to make the policy decision to transition away from fossil fuels.   In a presentation (here) Lindzen states:

I haven’t spent much time on the details of the science, but there is one thing that should spark skepticism in any intelligent reader. The system we are looking at consists of two turbulent fluids interacting with each other. They are on a rotating planet that is differentially heated by the sun. A vital constituent of the atmospheric component is water in the liquid, solid and vapor phases, and the changes in phase have vast energetic ramifications. The energy budget of this system involves the absorption and re-emission of about 200 watts per square meter. Doubling CO2 involves a 2% perturbation to this budget. So do minor changes in clouds and other features, and such changes are common. In this complex multifactor system, what is the likelihood of the climate (which, itself, consists in many variables and not just globally averaged temperature anomaly) is controlled by this 2% perturbation in a single variable? Believing this is pretty close to believing in magic. Instead, you are told that it is believing in ‘science.’ Such a claim should be a tip-off that something is amiss. After all, science is a mode of inquiry rather than a belief structure.

Can We Transition Away from Fossil Fuels

A recurrent theme at this blog is that the electric energy system absolutely needs new technology to achieve decarbonization.  Responsible New York agencies all agree that new Dispatchable Emissions-Free Resource (DEFR) technologies are needed to make a solar and wind-reliant electric energy system work reliably.  Because DEFR is needed and because we don’t know what should be used, I think that the Climate Act schedule needs to be reconsidered or at least paused.

I believe the only likely viable DEFR backup technology is nuclear generation because it is the only candidate resource that is technologically ready, can be expanded as needed, and does not suffer from limitations of the Second Law of Thermodynamics. I do concede that there are financial issues that need to be addressed.  The bigger issue is that DEFR is needed as a backup during extended periods of low wind and solar resource availability, but nuclear power is best used for baseload energy.  I estimate that 24 GW of nuclear could replace 178 GW of wind, water, battery storage.  Developing nuclear eliminates the need for a huge DEFR backup resource and massive buildout of wind turbines and solar panels sprawling over the state’s lands and water.  Until the New York Energy Plan settles on a DEFR solution the only rational thing to do is to pause the implementation process.

Lest you think that I am the only skeptical voice about the viability of an electrical energy transition relying on wind and solar resources I list some recent articles below.

Thomas Shepstone describes a fact sheet from the Empowerment Alliance that outlines why the electric grid is headed to a crisis:

America’s Electrical Grid Crisis is on the brink of a crisis that no one is talking about. Government mandates and pledges from utilities to achieve “net zero” emissions by 2050 or sooner have led to the closure of traditional power plants fueled by coal, natural gas and nuclear energy.

However, the wind and solar energy that is supposed to replace these sources is intermittent, unreliable and artificially supported by government subsidies. “Net zero” policies may sound nice on paper but they are not ready for practice in the real world.

In fact, the crisis may have already begun. A recent capacity auction by the largest U.S. electrical grid operator resulted in an over 800% price increase for these very reasons. And, everyday Americans are going to pay the price through higher bills for less reliable electricity.

  • One study of electricity plans in the Midwest found that, “Of the 38 major investor-owned utilities spanning the Great Lakes region, 32 are pledged to net zero by 2050 or sooner. Of the seven states analyzed in this report, three have net zero mandates by law, one has net zero mandates through regulation and the other three have no net zero mandates at the state level.”
  • “The Midcontinent Independent Systems Operator, the grid operator for much of the Midwest, projects that by 2032, none of the five Great Lakes states in its territory will have enough electricity capacity to meet even the most conservative projection of demand load.”
  • “Wind and solar cannot be relied on as a one-for-one replacement of existing generation sources, like coal, natural gas and nuclear. If the grid relies on forms of generation that are uncontrollable and unreliable, it must also maintain backup sources that are controllable and reliable. Because wind and solar production can fall to near zero at times, utilities may need to maintain up to another grid’s worth of generation capacity.”

Source:

Joshua Antonini and Jason Hayes, “Shorting The Shorting The Great Lakes Grid: Great Lakes Grid: How Net Zero Plans Risk Energy Reliability,” Mackinac Center for Public Policy, 2024

Thomas Shepstone describes a report by the Fraser Institute regarding the real costs of electricity produced from solar and wind facilities, compared to other energy sources.  Tom highlights the money paragraphs with his emphasis added:

Often, when proponents claim that wind and solar sources are cheaper than fossil fuels, they ignore [backup energy] costs. A recent study published in Energy, a peer-reviewed energy and engineering journal, found that—after accounting for backup, energy storage and associated indirect costs—solar power costs skyrocket from US$36 per megawatt hour (MWh) to as high as US$1,548 and wind generation costs increase from US$40 to up to US$504 per MWh.

Which is why when governments phase out fossil fuels to expand the role of renewable sources in the electricity grid, electricity become more expensive. In fact, a study by University of Chicago economists showed that between 1990 and 2015, U.S. states that mandated minimum renewable power sources experienced significant electricity price increases after accounting for backup infrastructure and other costs. Specifically, in those states electricity prices increased by an average of 11 per cent, costing consumers an additional $30 billion annually. The study also found that electricity prices grew more expensive over time, and by the twelfth year, electricity prices were 17 per cent higher (on average).

Finally, Chris Martz compares the impacts of wind and solar vs. nuclear power. I should note that he is not including DEFR support in his estimates. He concludes:

In order to power the same number of homes that a 1,000 MW nuclear power plant can, it would require either:

• For 𝐬𝐨𝐥𝐚𝐫 𝐏𝐕: Approximately 4,000 MW of installed power (equivalent to four nuclear facilities) and 24,000 acres of land (some 37.5 × as much land area than a nuclear plant).

• For 𝐨𝐧𝐬𝐡𝐨𝐫𝐞 𝐰𝐢𝐧𝐝: Approximately 2,800 MW of installed power (equivalent to 2.8 nuclear facilities) and 89,600 acres of land (some 140 × as much land area than a nuclear power generation station).

But, I should caution you that these estimates are in fact conservative. Why? Because they do 𝒏𝒐𝒕 take into consideration land area required for battery storage due to their intermittency in overcast sky conditions, low wind speed and/or overnight.

Conclusion

It is terrifying that the rationale and proposed solution to a New York policy that could cost hundreds of billions is based on fantasy.  Richard Lindzen describes the made-up rationale: “In this complex multifactor system, what is the likelihood of the climate (which, itself, consists in many variables and not just globally averaged temperature anomaly) is controlled by this 2% perturbation in a single variable? Believing this is pretty close to believing in magic.”  Keith Minor explains that even if this perturbation was the climate change driver that we can never provide enough data to to ensure that a model could accurately project the impacts.  The myth that wind and solar can replace fossil fuels on the schedule mandated by the Climate Act is dependent upon the fantastical notion that a resource that does not exist can be developed, tested, permitted, and deployed by 2040.

I can only conclude that allowing politicians to set energy policy will turn out to be an unmitigated disaster.

New York Response to Part 490 Sea-Level Rise Amendment Comments

I submitted comments last April on the Department of Environmental Conservation (DEC) proposed Amendment to Part 490 Projected Sea-Level Rise (Amendment).  DEC stated that: “The goal of the proposed amendments is to provide up-to-date science-based projections of future sea level rise.”  This article responds to the replies to the comments I submitted.

This is one component of the Climate Leadership & Community Protection Act (Climate Act) mandate to do something about the “existential threat” of climate change.  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 480 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.

Part 490 Projected Sea-Level Rise

DEC’s Climate Change Regulatory Revisions webpage describes the Amendment to the regulation:

On September 22, 2014, the Community Risk and Resiliency Act was signed into law — Chapter 355 of the Laws of 2014 (CRRA). CRRA is intended to ensure that decisions regarding certain State permits and expenditures consider climate risk, including sea-level rise. Among other things, CRRA requires the Department of Environmental Conservation (Department) to adopt regulations establishing science-based State sea-level rise projections. Therefore, the Department proposed a new 6 NYCRR Part 490, Projected Sea-Level Rise (Part 490). Part 490 establishes projections of sea-level rise in three specified geographic regions over various time intervals, but does not impose any requirements on any entity. An amended Part 490 was adopted in September 2024 with no revisions to the draft released for public comment in January 2024.

While DEC loses no opportunity to say that this regulation imposes no requirements on any entities, I believe there are implicit requirements. 

Last April I was prompted to respond to the proposed Amendment by some articles that were published early in 2024.  Kip Hansen wrote a post entitled New York State Sea Level Rise:  Fantasy as Law.   A few days later Anthony Watts responded to a New York Post article by Carl Campanile with the headline: Sea levels around NYC could surge up to 13 inches in 2030s due to climate change: state study. I prepared comments which I summarized in a post.  In September 2024 DEC adopted the Amendment.  Surprising no one, their Assessment of Public Comments blew off all the concerns expressed.  

Part 490 Projected Sea-Level Rise

Kip Hansen summarized New York sea level rise history and the DEC projections in detail in his post.  What you need to know here is that New York City’s sea level has been increasing 3 mm per year over 167 years.  Enough of that observed increase is caused by local subsidence so that the remainder is “very close to the standardly cited Global Sea Level Rise figure for the 20th Century of 1.7 or 1.8 mm/yr.  (opinions vary – see NOAA here.)”   Kip explains that the projected increases included in the Amendment” have not been seen in the decade since the 2014 update report and, based on the historical record, are extremely unlikely to be seen in the near future.” He points out that “all the projections, in the Amendment, in the NYSERDA 2014 report and in the NYS Climate Assessment require doubling and tripling of long-term sea-level rise rates in New York City.”

RCP8.5 Comments

Kip, Anthony, and I agree that the projections are flawed because the methodology estimates an unrealistically high projected sea-level dependent upon an impossible climate model scenario.  Depending upon which version of the Intergovernmental Panel on Climate Change report being used the modeling scenarios are known either as a Representative Concentration Pathway (RCP) or Shared Socio-economic Pathways (SSP).  The RCP-8.5 scenario has been debunked by many as Anthony reported here and here.  My comments focused on the misuse of RCP-8.5 using some of those references and adding others. 

The Amendment revises the projections of future sea-level rise required by New York regulations. 

I raised the RCP-8.5 concerns in the pre-proposal draft of the amendment.  The Regulatory Impact Statement (RIS) uses the label SSP5-8.5 for this scenario and admits that those emission scenarios are implausible:

The Department acknowledges that current GHG emissions policies would result in actual emissions lower than projected by SSP5-8.5. Thus, the inclusion of higher projections of sea level rise, especially those based on SSP5-8.5, could lead to consideration of conditions that are unlikely to occur, at least in the more immediate future.

So how did DEC justify the continued use of SSP5-8.5?  The RIS goes to considerable lengths to justify its use with statements like the following: “Unfortunately, current literature does not provide a basis for assessment of the emissions levels at which ice shelf and marine ice cliff instability, important factors in sea level rise in high emissions scenarios, such as SSP5-8.5, become significant.” 

Response to RCP8.5 Comments

DEC is required to respond to submitted comments.  The Assessment of Public Comments document addressed my arguments in their response to Comment 6.  They summarized my concerns saying that “SSP5-8.5 is not plausible, and model outputs based on this SSP, including the rapid ice melt scenario, should not be included in the projections.”   The reply stated:

Response to Comment 6: DEC has described its rationale for including SSP5-8.5 model outputs in its projections, including the rapid ice melt scenario, in the RIS. To summarize here, the emission-reduction gap noted above, uncertainties in the causal chain to sea level heights, including ice cliff and ice shelf stability, and reports of accelerating Antarctic and Greenland ice loss reduce confidence that SLR will be limited to the levels projected by SSP2-4.5 models.  The CIA methodology report (p. 21) provides additional rationale for including projections based on SSP5-8.5:

• Continuity with previous New York State projections, which were based on representative concentration pathways with the same end-of-century radiative forcing.

• Stakeholder interest in these projections, based on CIA Needs Assessment.

• Value of identifying a broad range of plausible outcomes.

• Current climate impact models’ underestimation of plausible outcomes when driven by only moderate GHG forcing.

DEC maintains that inclusion of high, albeit unlikely, projections to enable consideration of the consequences of low-probability but high-consequence events to be the more prudent alternative to limiting projections to those based on SSP2-4.5.

The crux of my disagreement is the value of incorporating what is essentially an impossible scenario.  All the reasons cited attempt to justify what is essentially an executive decision to perpetuate the narrative that there is an existential threat of climate change exemplified, in this case, by extraordinary sea-level rise projections. 

It is telling that the response claims that the extreme projections are included because of “Stakeholder interest in these projections, based on CIA Needs Assessment.”  New York State agencies love to claim that they have a robust stakeholder process.  However, the stakeholder process operates with a loaded deck.  The New York Research & Development Authority (NYSEDA) CIA Needs Assessment Steering Committee is a relevant example.  The report states “The assessment has been guided by a Steering Committee of climate scientists, assessment experts, and representatives from nonprofit organizations and state and municipal government agencies.”  I am very critical of the review process because I know that there is immense pressure to adhere to the narrative within NYSERDA and I am sure no one skeptical of the extreme impact narrative was allowed anywhere near the Steering Committee. In addition, technical analyses performed for NYSERDA will not be funded in the future if the answers do not support the narrative.

Another reason given for using the impossible scenario is the “value of identifying broad outcomes”.  In this instance I think the value is primarily for the “scare the bejesus out of the populace” narrative needed to perpetuate the story that New York politicians are here to save the planet even in the face of increasingly obvious enormous costs, threats to reliability, and inevitable reduction in personal choice.  This will only stop when there is a change in the political balance of New York.

Amendment Mandate

I also submitted comments on the use of the projections.  

The Assessment of Public Comments document summarized my concern about how the projections will be used in Comment 7: “Although Part 490 may not directly create a mandate on local governments, many permits must consider the SLR climate hazard, which is a clear mandate affecting all governmental agencies.”  The response stated:

Commenter is correct that the Community Risk and Resiliency Act (CRRA) requires that applicants for all permits regulated pursuant to the Uniform Procedures Act (UPA) demonstrate consideration of climate change, including SLR. However, local governments are not required to incorporate the State’s climate change projections, including projected SLR, into local decision making. Local governments may be required to incorporate projected SLR into siting and design for projects for which a UPA permit is required. However, the manner in which projected SLR must be incorporated is described in program-specific regulations, policies, guidance and permit conditions.

This response basically abdicated their responsibilities with a “well it really doesn’t matter” claim.  I don’t think that local governments have the time or the expertise to address sea level rise with their own approach.  Part 496 will be approach used to define sea level rise in most cases.

DEC responded to my comment about where the extremely high projection will be used in Comment 9:  “The proposed amendments would require that all projects along the tidal shoreline must protect against 114 inches of SLR.”

Comment is not accurate. SLR of 114 inches is the proposed end-of-century projection under the rapid ice melt scenario. However, as stated in the RIS, DEC does not intend to require consideration of the rapid ice melt scenario in its permitting. The State Flood Risk Management Guidance (SFRMG) recommends consideration of the medium SLR projection (36 inches by 2100) over the expected service life of the project for non-critical projects and recommends use of the high projection (65 inches by 2100) over the expected service life of the project only for critical projects. Lower projections would be applicable according to the expected service life of the project.

The DEC responses focused on the rapid ice melt scenario, but the intent of my comments was that all the scenario results were way too high because they use RCP-8.5.  At the observed rate over the last 167 the likely total sea-level rise by 2100 is only 9 inches which is four times higher than the medium SLR projections and over seven times higher than the high SLR projections they recommend.  This must have an impact on costs.  DEC responded to my recommendation that the RIS should include an accounting of costs associated with the different SLR projections in Comment 10:

No reasonable accounting of costs associated with these projections can be provided due to uncertainty regarding the number and types of projects that might be affected. Although municipalities could incorporate the proposed projections into local planning and zoning, CRRA does not require them to do so. Thus, most residential projects would not be directly affected by these projections. Rather, these projections are most applicable to projects under the Department’s regulatory purview, which are more likely to be unique in their siting and design considerations and warrant consideration of costs and benefits on a case-by-case basis. Further, as discussed in the revised RIS, the differences between the scenario recommended by the commenter as the basis of projections and the approach selected by the Department are relatively small and represent a reasonable additional element of safety to account for uncertainty and the gap between GHG emission reduction commitments and implementation for the projections that are most likely to be used in regulatory contexts.

I have two problems with this response.  Refusing to include costs because it would be hard simply avoids responsibility.  Secondly, I do not think that projections that are four to seven times higher than the observed trend are “relatively small”.  I think this response represents a different interpretation of the intent of my comments that the modeling approach used by DEC over-estimates the possible sea-level rise compared to the observed trend.  The changes in the observed trend necessary for the models to be reasonably accurate are so great that the trend would have to exhibit marked acceleration today.  It is not happening.

My cost concerns were summarized in Comment 11: “The RIS is flawed because it does not weigh data against benefits and consequences for the intended application, i.e., developments with near-term life expectancies. All the other steps for appropriately addressing risk are hindered by not considering the applicability of the time frame. Ultimately the precautionary principle is applied without any other considerations.”  DEC responded:

The comment is incorrect in that it implies that projections of SLR far into the future, beyond the life expectancy of the project, must be incorporated into siting and design of the project. In fact, every one of the flood risk management guidelines for tidal areas included in the SFRMG includes consideration of the “sea-level rise projection over the expected service life of the structure.”

This might be another instance where DEC and I are talking past each other.  I tried to argue that the probability of problems with sea-level rise that their projections imply is very low compared to a reasonable expectation of the life expectancy of the project.  The observed sea-level rise expectation in 2100 will likely not occur until 2300 which is far beyond any reasonable expectation for life expectancy planning.

Conclusion

This process is an indictment of New York State’s regulatory mandates for stakeholder participation.  State agencies treat the stakeholder process as an obligation and not as an opportunity to improve their programs.  In this instance the lack of pre-proposal comments from the affected jurisdictions should have prompted more outreach.  The response to comments suggests that the extreme projections that prompted the New York Post article mentioned in the introduction will not necessarily affect SFRMG planning as much as I fear.  The question is whether the affected jurisdictions know that or not.  There are some instances where my comments and their responses could have led to further discussions if there was genuine interest in improving either the regulation or their description of why they are doing what they propose. 

Surprising no one, their Assessment of Public Comments blew off our concerns.  There is no reasonable defense for using RCP-8.5.  As long as New York State continues to claim they follow the science but ignore it when it is inconvenient, the more likely the rush to the bottom will become a death spiral. 

Why New York Renewables?

On December 18, 2024, the New York Assembly Committee on Energy held a public hearing to gather information about New York State Research & Development Authority (NYSERDA) revenues, expenditures, and the effectiveness of NYSERDA’s programs.  During questioning, members of the committee asked NYSERDA and New York Department of Public Service staff questions about implementation of the Climate Leadership & Community Protection Act (Climate Act).  This article discusses the response to the question can New York rely solely on wind and solar.

This is the 800th post at this blog.  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 480 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 an interim 2030 reduction target of a 40% GHG reduction by 2030. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040. 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.” The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantified the impact of the electrification strategies.  That material was used to develop the Draft Scoping Plan outline of strategies.  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 Assembly Committee on Energy hearing was intended to gather information about NYSERDA’s revenues and expenditures in order to gain a broader perspective on effectiveness of NYSERDA’s programs.  I submitted written testimony describing NYSERDA’s RGGI program effectiveness that included two documents: my public statement and an attachment that documented the analysis of the trends and cost-effectiveness.  I also included a link to the spreadsheet that generated all the trends and graphs.

At the end of this article is a complete transcript of the questions and responses.  The body of the article is not going to provide specific references.  Assembly Member Philip Palmesano asked the question about renewables that is the subject of this article.  Jessica Waldorf, Chief of Staff & Director of Policy Implementation, New York State Department of Public Service and John Williams, Executive Vice President, Policy and Regulatory Affairs, New York State Energy Research and Development Authority responded.

Why Renewables

I frequently make the point that New York GHG emissions are less than one half of one percent of global emissions and global emissions have been increasing on average by more than one half of one percent per year since 1990.  Even if New York were to successfully eliminate its GHG emissions the increases elsewhere we supplant our efforts in less than a year. 

Palmesano made the same point that New York emissions are not going to affect global warming and asked what impact the emission reduction programs are going to have.  I think that is an obvious question and it appeared that Waldorf and Williams had prepared to respond to it.

Waldorf said that there are other reasons “to build renewable energy resources in New York that are not just related to emissions.  She gave two reasons: energy security and price volatility.  Palmesano followed up early in her response questioning whether the emphasis on wind and solar was putting all our eggs in one basket provided energy security. 

Waldorf’s explanation of energy security mentioned “localizing energy production here”.  She went on to state:

The other thing I would say about energy security is price volatility.  Customers are beholden to the winds of the fossil fuel industry and the up and down markets that we see from fossil fuels.  Localizing our energy production and renewables allows us for price stability.  That is definitely a benefit of building resources here. 

With regards to energy security, my interpretation is that the Agency position believes that if we develop the wind and solar resources called for in the Scoping Plan that we will not be dependent upon other jurisdictions for our electricity.  That ignores the fact that the supply chain for the rare earth elements necessary for wind, solar, and energy storage has significant risks:

Despite their global importance, the production of rare earth elements has become increasingly concentrated in China over recent years. Not only does this present a geopolitical and economic risk to most of the developed world, but it is also indicative of possible future supply constraints which could interrupt progress toward a decarbonized future.

There is another flaw in this vision for New York electricity system independence using wind and solar – weather variability.  In my comments on the Draft Scope of the Energy Plan I argued that this is an unresolved issue that must be addressed sooner rather than later.  All solar goes away at night and wind lulls can affect all of New York and adjoining regional transmission organization (RTO) areas at the same time. Therefore, when a future electric grid relies on wind and solar those resources will correlate in time and space.  This issue is exacerbated by the fact that the wind lulls occur at the same time the highest load is expected.  I do not believe we can ever trust a wind, solar, and energy storage grid because if we depend on energy-limited resources that are a function of the weather, then a system designed to meet the worst-case is likely impractical.  For example. I believe that in the last 70 years the worst-case weather lull occurred in 1961.  I cannot imagine a business case for the deployment of enough of any Dispatchable Emissions Free Resources (DEFR) technology that will only be needed once in 63 years.  For one thing, the life expectancy of the candidate technologies is much less than 63 years

At first glance, the price volatility argument is persuasive because we have all experienced the impact of increased fuel costs in recent memory.  However, in the last two months the European electric market has shown what happens when an electric system becomes overly dependent upon wind and solar:

From November 2 to November 8 and from December 10 to December 13, Germany’s electricity supply from renewable energies collapsed as a typical winter weather situation with a lull in the wind and minimal solar irradiation led to supply shortages, high electricity imports and skyrocketing electricity prices.

The electric transmission connections to other countries raised prices elsewhere.  Prof. Fritz Vahrenholt says they went up so much in Norway that the energy minister “wants to cut the power cable to Denmark and renegotiate the electricity contracts with Germany”.  Swedish Energy Minister Ebba Busch stated: “It is difficult for an industrial economy to rely on the benevolence of the weather gods for its prosperity.” He went on to respond directly to Habeck’s green policy: “No political will is strong enough to override the laws of physics – not even Mr. Habeck’s.”

Finally, note that the DEFR technologies are proposed as backup with expected operations of under ten percent per year.  Those resources will have to be paid very high rates during those hours when needed to be economically viable.  That makes price volatility of a wind and solar electric system inevitable.

Waldorf also responded to Palmesano’s question about over-reliance on wind and solar:

The other thing I would say is we’re not putting all our eggs in one basket when it comes to generation resources.   The points that were discussed earlier and in the zero by forty proceeding, we are looking at other zero emission resources and the value that they can bring into the grid.  So, it’s not the case that we’re just looking at solar and wind.  We are looking at energy storage, at nuclear, and at other resources and how they fit into the picture.

At other times during their response to questions Waldorf and Williams touched on the need for DEFR to back up wind and solar resources during extended periods of calm winds and low solar availability.  In that context, they said the state was looking at these other resources.  They are trying to make the need for DEFR resources a feature not a flaw. 

Responsible New York agencies all agree that new DEFR technologies are needed to make a solar and wind-reliant electric energy system work reliably.  No one knows what those technologies are.  I believe the only likely viable DEFR backup technology is nuclear generation because it is the only candidate resource that is technologically ready, can be expanded as needed, and does not suffer from limitations of the Second Law of Thermodynamics. I do concede that there are financial issues that need to be resolved for nuclear, but this is an issue for any of the DEFR options. 

Waldorf and Williams ignore the following point.  If the only viable DEFR solution is nuclear, then the wind, solar, and energy storage approach they are advocating cannot be implemented without nuclear.  I estimate that 24 GW of nuclear can replace 178 GW of wind, water, battery storage.  Developing nuclear eliminates the need for a huge DEFR backup resource and massive buildout of wind turbines and solar panels sprawling over the state’s lands and water.  If I had the opportunity to ask them a question I would have asked if it would be prudent to pause renewable development until a DEFR technology is proven feasible because the choice and even the viability of any DEFR technology will affect the entire design of the future electric structure necessary to meet the Climate Act net-zero energy system.  Throwing money at renewable energy without knowing that there is a viable backup resource is the last thing we should do because New York cannot afford to invest in “false solutions”.

One last point, Waldorf and Williams did not mention the effect of global warming conceding the fact that New York emission reductions are not going to make any difference.

Conclusion

I have always wondered how state agencies would respond to the point that New York GHG emissions are smaller than the observed increase in global emissions thus making our efforts inconsequential.  The energy security and price volatility response given at this hearing was rehearsed and flawed. 

The “localized” energy security advantage for the wind, solar, and energy storage approach is easily rebutted.  Deployment of the resources is dependent upon supply chains that are anything but secure.  Because all New York wind and solar resource availability is correlated, that means we will be reliant upon resources outside of New York for support.  Finally it is hardly secure that we must develop and deploy new DEFR technologies that are not currently commercially available on an ambitious schedule.

The intermittency of wind and solar has two impacts on price volatility.  During peak demands and likely low renewable resource availability we need DEFR technologies that will likely be expensive.  Even in the absence of DEFR, European experience shows that extreme price volatility occurs during these periods.

There are so many unanswered questions and unresolved issues that the only logical next step is a pause in Climate Act implementation until we truly understand how to decarbonize our electric system without adversely affecting affordability and current reliability standards.    

Transcript of the Why Renewables Question

There is a video of the entire presentation available at the NYS Assembly website.  The question and response is in the video available in the sub-listing of questions in Assemblyman Palmesano’s second link.  The following is a transcript of the entire exchange that I captured using the Dictate application in Microsoft Word and then edited for clarity.

Palmesano Question during second round of questions at 2:05:32

New York contributes 0.4% of total global missions.  China contributes 30%, has 1000 coal plants and is building more every week.  In fact they expanded their coal generating capacity actually by 70 gigawatts, double our total generating capacity including wind, solar, hydro, nuclear, and natural gas.  What true impact are we really making with this process?  Are we just driving out more families, farmers, small businesses, and manufacturers because this only affects New York.  It doesn’t affect China, India, or Russia which is 42% of total emissions.  It doesn’t affect Pennsylvania.  What impact are we truly going to make?

Waldorf response at 2:06:11

I’ll respond to that first and say that there are other reasons to build renewable energy resources in New York that are not just related to emissions.  Some of them relate to things like energy security so localizing energy production here.  Some of them also relate to a point that one of my colleagues made earlier which is a lot of the different fuel sources that provide our energy today are …. 

Palmesano interrupted her here.

Palmesano follow up question at 2:06:32

You mentioned energy security.  I’m supportive of wind and solar and support wind and solar as part of the energy portfolio but you’re putting all your eggs in one basket of full electrification. We don’t have the technology out there for 2040.  Natural gas is used by 60% percent of New York homes for heating.  Natural gas should be a part of the portfolio just like the diversified 401K.  That’s what we should be doing with her energy portfolio if you want to stabilize prices and have energy security in New York You’re going away from that.  It’s not gonna work.  It’s not very successful.  It’s gonna be very costly.

Waldorf response at 2:07:10

The other thing I would say about energy security is price volatility.  Customers are beholden to the winds of the fossil fuel industry and the up and down markets that we see from fossil fuels.  Localizing our energy production and renewables allows us for price stability.  That is definitely a benefit of building resources here.  The other thing I would say is we’re not putting all our eggs in one basket when it comes to generation resources.   The points that were discussed earlier and in the zero by forty proceeding we are looking at other zero emission resources and the value that they can bring into the grid.  So, it’s not the case that we’re just looking at solar and wind we looking at energy storage, at nuclear, and at other resources and how they fit into the picture.

On electrification we’re certainly mindful of the breakdown of how customers get their heating and electricity services today.  In things like gas transitioning and our gas policy planning proceeding we are looking at the best way to make an equitable transition and what that looks like for the current customers that rely on those fuels today.  It is not the case that we’re asking everybody to make the switch tomorrow.  We see this as a transition that’s going to span several years, several decades in terms of meaningful returns transitioning away those customers that currently rely on natural gas to a cleaner source.  It’s not the case that it is an overnight switch.  We are really looking at the long term and trying to achieve those objectives.  

Williams response at 2:08:35

If I could just add on the long-term objectives, focusing particularly on the generation aspects.  We are in the midst of an energy plan process.   We recently launched that and we had a meeting of the planning committee last week where we brought in a representative of the North American electric reliability council and representatives from the New York independent system operator.  What we were asking them to really inform us about was how we should be approaching planning, over the next 15 years that’s our energy plan horizon.  We asked what the nature of the resources that we should be bringing in.  They responded that we must look at all the attributes that various resources can bring into the system.   The emissions aspect is one thing, but we have to understand the varying different contributions to all of the engineering that’s necessary to run a secure and reliable electricity system.  It’s not just a question of just the energy but we need to look at all of those other aspects of electricity whether it’s frequency or voltage. What are the nature of the resources that are necessary to do that.   We are going to be taking a look at that through our energy plans.

Comments on RGGI Performance and Implications for NYCI

My last three published articles described the status of the New York component of the Regional Greenhouse Gas Initiative (RGGI) as administered by the New York State Energy Research & Development Authority (NYSERDA).  The ulterior motive for those articles was the need to describe the implications of NYSERDA observed performance relative to historical emission trends for two submittals.  NYSERDA’ was taking comments on its Regional Greenhouse Gas Initiative (RGGI) Operating Plan Amendment for 2025 and the New York Assembly Committee on Energy was taking public statements as part of its public hearing on NYSERDA spending and program review.  This post summarizes my submittals because advocates of the New York Cap-and-Invest (NYCI) program frequently refer to RGGI as a successful model.

Although I was tempted to state in my submittals that no one in the state has more experience with RGGI than me, I settled on say I was uniquely qualified to comment on issues related to RGGI. I have been involved in the RGGI Program since it was first proposed and continue to review and comment in stakeholder processes including the NYSERDA RGGI Operating Plan stakeholder processes to this day.   At one time I even purchased RGGI allowances from an auction and held the allowances for several years.  I continue to follow and write about the details of the RGGI program in my retirement because its implementation affects whether I will be able to continue to be able to afford to live in New York.   I have extensive experience with air pollution control theory, implementation, and evaluation of results having worked on every cap-and-trade program affecting electric generating facilities in New York including the Acid Rain Program, Regional Greenhouse Gas Initiative (RGGI) and several nitrogen oxide programs.   The opinions expressed in this post 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.

Background

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania has joined but is not actively participating in auctions due to on-going litigation.

My last three RGGI articles were related. In the first article I evaluated Environmental Protection Agency (EPA) emission data, determined that the primary reason for the observed 49% reduction in electric sector emissions was due to fuel switching from coal and oil to natural gas.  I also evaluated NYSERDA documentation and found that the investments funded by RGGI auction proceeds would have been only 4.2% higher if the NYSERDA program investments did not occur.  In the second article I showed that the cost per ton reduced from the NYSERDA RGGI operating plan investments was $582 per ton of CO2. The final article described the program allocations in the 2025 Draft RGGI Operating Plan Amendment.  There are unacknowledged ramifications of the emission reduction performance, funding program priorities, and RGGI compliance mandates.  I will only summarize the findings in this article because details are available in the previous articles and my comments referenced below.

Operating Plan Amendment

NYSERDA designed and implemented a process to develop and annually update an Operating Plan that summarizes and describes the initiatives to be supported by RGGI auction proceeds.  On an annual basis, the Authority “engages stakeholders representing the environmental community, the electric generation community, consumer benefit organizations and interested members of the general public to assist with the development of an annual amendment to the Operating Plan.”  I have submitted comments on the annual amendments since 2021.  Previously I discussed every program included but because I think the NYSERDA stakeholder process is broken I limited my comments to the implications of the observed emissions trend, the funding program priorities, and RGGI compliance mandates. 

Energy Committee Public Hearing

On December 18, 2024, the New York Assembly Committee on Energy held a public hearing to gather information about NYSERDA’s revenues and expenditures in order to gain a broader perspective on effectiveness of NYSERDA’s programs.  I submitted testimony describing NYSERDA’s RGGI program effectiveness.  My submittal to the Energy Committee included two documents: the public statement and an attachment that documented the analysis of the trends and cost-effectiveness.  I believe that it is appropriate for authors who comment on public policy to provide sufficient information so that readers can check my work and come to their own conclusions so I also included a link to the spreadsheet that generated all the trends and graphs.

Electric Sector Emission Trend

Both submittals discussed the observed emission reduction trend because the effectiveness of RGGI as a pollution control program is determined by the observed emission trend.  Figure 1 describes the annual electric sector emissions and emissions by fuel type.  It clearly shows that the observed emission reductions are due to fuel switching from coal and oil to natural gas.  Natural gas CO2 emissions are lower per MWhr so even though natural gas generation went up the overall CO2 emissions have gone down.  The other important finding in Figure 1 is that fuel switching emission reductions are no longer available. 

Figure 1: New York State Annual Electric Sector Emissions by Fuel Type

On a regular basis NYSERDA publishes a status update of the progress of their program activities, implementation, and evaluation.   According to the latest update, the total cumulative annual emission savings due to NYSERDA program investments through the end of 2023 is 1,976,101 tons.  That means that emissions from RGGI sources in New York would have been only 4.2% higher if the NYSERDA program investments did not occur.  According to the report, cumulative combined costs for those programs was $1,149 million which means that the cost per ton reduced is $582.

The funding status reports also break out emission savings and costs for NYSERDA programs. NYSERDA RGGI proceed investments can produce CO2 emission savings from RGGI-affected electric generating units in two ways: directly by displacing natural gas generation by deploying zero-emissions resources or indirectly by reducing the amount of load that the affected units must provide.  I categorized programs for three categories: direct reductions to RGGI sources, indirect reductions, and those programs that will actually increase electric generating emissions. One program that increases emissions is NYSERDA’s Clean Transportation Program that “has been pursuing five strategies to promote EV adoption by consumers and fleets across New York”.   The results in the Funding status reports show that since the start of the program NYSERDA has allocated 10% of its investments to programs that directly reduce utility emissions by 199,733 tons, 58% to programs that indirectly reduce utility emissions by 1,205,780 tons, and 32% to programs that will increase utility emissions by 678,804 tons.  When those savings that do not affect RGGI source emissions are removed, total savings are 1,297,297 and the emissions from RGGI sources in New York would have been only 2.8% higher if the NYSERDA program investments did not occur.

The proposed Amendment to the Operating Plan does not address the need to focus on emission reductions.  It allocates only 22% to programs that directly, indirectly, or could potentially decrease RGGI-affected source emissions.  Programs that will add load that could potentially increase RGGI source emissions total 37% of the investments.  Programs that do not affect emissions are funded with 29% of the proceeds and administrative costs total another 8%. 

There is one other notable aspect of the NYSERDA funding in the Draft Amendment for 2025. The Funding Status report states that annual cumulative program investments are $1.1 billion through the end of 2023 whereas the cumulative total revenues in the Operating Plan Amendment are $2.4 billion through FY 23-24.  There is no discussion of the differences.  Most of the difference is probably due to collected but unspent revenues.  It is notable that more than half of the money collected has not been spent.

Implications

The Climate Leadership & Community Protection Act (Climate Act) Scoping Plan recommended an economy-wide market-based program as part of the net-zero transition.  In response New York regulators have been developing the NYCI program.  Advocates for this approach frequently refer to RGGI as the successful model for NYCI citing observed emission reductions and the quantity of funds raised.  The prevailing perception of NYCI is exemplified by Colin Kinniburgh’s description in his recent article in New York Focus.  He describes the theory of a cap-and-invest program as a program that will kill two birds with one stone.  “It simultaneously puts a limit on the tons of pollution companies can emit — ‘cap’ — while making them pay for each ton, funding projects to help move the state away from polluting energy sources — ‘invest.'”

In the real world there are issues.

The missing piece for NYCI is that setting a cap on carbon emissions is all well and good in theory, but where are the emission reductions going to come from.  Reducing carbon emissions to zero is hard because the only way to get there is to replace existing technology with something that has zero emissions.   In the electric sector, the owners of the generating units are not building zero-emission replacements.  NYSERDA must motivate somebody else to do it. 

Danny Cullenward and David Victor’s book Making Climate Policy Work describe another related aspect of these programs that has not been acknowledged by NYSERDA or NYCI proponents.  The authors note that the level of expenditures needed to implement the net-zero transition vastly exceeds the “funds that can be readily appropriated from market mechanisms”.  The RGGI experience corroborates these findings and should be considered by the Energy Committee.  It is also concerning that NYSERDA has never addressed my repeated comments describing these issues and the implications on their funding priorities.

There is another inconvenient aspect of cap-and-invest programs.  RGGI and NYCI both have defined emission reduction trajectories that determine how many allowances are offered for sale.  That means that the implementation of the zero-emission technology that must displace existing technology to get the necessary reductions is on a schedule with ramifications.  If the replacement technology deployment is delayed, then it is likely that there will not be enough allowances available for compliance.  The only option available for affected sources is to reduce or stop operations.  In other words, an artificial energy shortage.

Conclusion

The implication of this work is that the proposed NYCI plan to have NYSERDA manage the investments like they do with RGGI is not likely to succeed as shown by their performance to date.

My comments to NYSERDA argued that their RGGI auction proceed investments have done little to reduce emissions.  I always have argued that NYSERDA funding priorities over emphasize Climate Leadership and Community Protection Act (Climate Act) initiatives at the expense of the electric generating unit RGGI emission goals.  I take the simple position that RGGI was promulgated as an emission reduction program for the electric generating sector.  NYSERDA investments must be revised to displace the generation needed from RGGI-affected sources because that is the only compliance option left with no reliability implications. 

My public statement on NYSERDA program effectiveness of the RGGI auction proceeds followed the same reasoning.  Observed reductions are mostly unrelated to the NYSERDA investments so that is not a success.  The observed cost per ton reduced is very high and funding priorities do not recognize the compliance obligations, so these are not accomplishments.  I also argued that the NYSERDA stakeholder process is broken because there are clear problems with the current strategy, but the latest operating plan amendment makes no changes. 

There is one final note.  If NYSERDA provided a comprehensive explanation of all the emission reduction strategies in the Scoping Plan along with the expected emission reductions, anticipated costs, and potential sources of funding for their strategies then it would be possible to determine if NYSERDA has planned for the necessary reductions via other programs.  If NYSERDA published documentation of their response to submitted comments on their Operating Plan amendments, they could have explained their strategy for RGGI compliance. The lack of transparency in both instances precludes any reassurance that NYSERDA can be trusted to continue to operate without more governance and transparency.

Implications of NYSERDA RGGI Operating Plan Investments

This is the third article in a series of three on the status of the New York component of the Regional Greenhouse Gas Initiative (RGGI) as administered by the New York State Energy Research & Development Authority (NYSERDA).  This is timely because on December 18, 2024, the New York Assembly Committee on Energy held a public hearing to gather information about NYSERDA’s revenues and expenditures in order to gain a broader perspective on effectiveness of NYSERDA’s programs. 

In the first article I evaluated Environmental Protection Agency (EPA) emission data and NYSERDA documentation and found that the investments funded by RGGI auction proceeds would have been only 4.2% higher if the NYSERDA program investments did not occur.  In the second article I showed that the cost per ton reduced from the NYSERDA RGGI operating plan investments was $582 per ton of CO2. This article describes the program allocations in the 2025 Draft RGGI Operating Plan Amendment.  There are unacknowledged ramifications of the emission reduction performance, funding program priorities, and RGGI compliance mandates. 

Background

I have been involved in the RGGI program process since its inception.  I blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program.   I submitted comments on the Climate Act implementation plan and have written over 480 articles about New York’s net-zero transition because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good because of impacts on reliability, affordability, and environmental impacts.  The opinions expressed in this post 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.

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania has joined but is not actively participating in auctions due to on-going litigation. According to a RGGI website:

The RGGI states issue CO2 allowances that are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs.

Proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation, and direct bill assistance. Energy efficiency continued to receive the largest share of investments.

NYSERDA Operating Plan

NYSERDA designed and implemented a process to develop and annually update an Operating Plan which summarizes and describes the initiatives to be supported by RGGI auction proceeds.  On an annual basis, the Authority “engages stakeholders representing the environmental community, the electric generation community, consumer benefit organizations and interested members of the general public to assist with the development of an annual amendment to the Operating Plan.”

The latest Draft RGGI Operating Plan Amendment explains that

New York State invests RGGI proceeds to support comprehensive strategies that best achieve the RGGI greenhouse gas emissions reduction goals pursuant to 21 NYCRR Part 507.  The programs in the portfolio of initiatives are designed to support the pursuit of the State’s greenhouse gas emissions reduction goals by:

  • Deploying commercially available energy efficiency and renewable energy technologies;
  • Building the State’s capacity for long-term carbon reduction;
  • Empowering New York communities to reduce carbon pollution, and transition to cleaner energy;
  • Stimulating entrepreneurship and growth of clean energy and carbon abatement companies in New York; and
  • Creating innovative financing to increase adoption of clean energy and carbon abatement in the State.

The latest Operating Plan process is on-going at the time of this writing.  The Advisory Stakeholder meeting was held Thursday, December 5, 2024.  The presentation and webinar recording for the meeting are available.  The meeting described the proposed programs for the latest amendment.  Comments are due on December 23, 2024.

2025 Amendments to Operating Plan

The Stakeholder presentation notes that the 2025 Amendment assumes a future auction allowance price of $15.71.  This value is a conservative estimate based on the average price of the past ten auctions.  Note, however, that the auction price has settled higher in the most recent auctions so the FY25 Operating Plan budget assumes the allowance price of $19.59 which is the average of actual prices for first two RGGI auctions conducted this fiscal year and $15.71 per ton allowance estimate for the second two auctions.

It is notable that there is no mention of the total revenues expected.  That value equals the number of New York allowances in the auctions times the expected allowance prices.  I believe that New York will auction 21,783,380 allowances next year which means that the proceeds available in the Amendment total somewhere between $342,216,900 and $426,736,414 for FY 25.  At the Assembly Committee on Energy public hearing John Williams, Executive Vice President, Policy and Regulatory Affairs, NYSERDA stated that in the NYSERDA budget “RGGI allowance sales account for $191 million” at 15:30 in the video.  I have no idea why there is such a discrepancy between the actual proceeds and the NYSERDA RGGI Budget or why the 2025 Amendment presentation did not provide the totals expected.

Implications

Note that only one of the five goals described previously to “support the pursuit of the State’s greenhouse gas emissions reduction goals” addresses emission reductions.  The others are vague cover language to justify the use of RGGI auction proceeds to bury administrative expenses, force ratepayers to cover inconvenient costs related to Climate Act implementation and provide funding for other politically favored projects at the expense of programs that affect CO2 emissions from RGGI affected sources.  The question I tried to answer is just how much is allocated to reducing emissions.

Table 1 from the 2025 Draft RGGI Operating Plan Amendment lists all the proposed programs.  Highlighted programs indicate newly funded programs or additional funding to existing programs.  The original table highlights programs that “indicate newly funded programs or additional funding to existing programs”.  The notes to the table also explain that “Totals may not sum exactly due to rounding and that the fiscal years begin on April 1st and end on March 31st.  The document provides brief descriptions of the proposed programs in most instances, but not all the programs have descriptions.

As part of my annual comments, I evaluated these programs in the Operating Amendment relative to their value for future EGU emission reductions.  In my comment analysis, I reviewed each proposed program and classified each program relative to six categories of potential RGGI source emission reductions.  The first three categories cover programs that directly, indirectly or could potentially decrease RGGI-affected source emissions.  I also included a category for programs that will add load that could potentially increase RGGI source emissions such as programs to incentivize electrification.  The two other categories consider programs that do not affect emissions and administrative costs respectively.

Table 2 presents the results of my interpretation of the potential for RGGI EGU emission reductions for the programs in the proposed amendment.  The five programs without documentation highlighted in yellow.  The orange highlighted programs will be discussed in a later post.  The first three categories cover programs that directly, indirectly, or could potentially decrease RGGI-affected source emissions.  They account for only 22% of the investments.  Programs that will add load that could potentially increase RGGI source emissions and whose emissions savings are unrelated to the electric sector total 37% of the investments.  Programs that do not affect emissions are funded with 29% of the proceeds and administrative costs total another 8%.  Clearly there is no preference for reducing emissions.

Table 2: Potential for RGGI Reductions for Funding Allocations for 2025 Operating Plan Amendments

Discussion

In the previous two RGGi status articles I made the point that the observed emission reductions are the primary reason for the observed reductions.  Figure 1 clearly shows this.  Since the start of the RGGI program I estimate that emissions from RGGI sources in New York would have been only 4.2% higher if the NYSERDA program investments did not occur and only 2.8% higher when projected savings that do not affect RGGI source emissions are removed.

Figure 1: New York State Emissions by Fuel Type

To date the lack of investment in electric sector emission reduction programs has not been an issue because fuel switching has provided the emission reductions necessary to comply with RGGI reduction requirements.  However, eventually there will be a problem because no more fuel switching reductions are available while RGGI allowance allocations continue to decrease. 

NYSERDA has shown no indication that it is aware of this concern.  In my previous article, I pointed out that the observed investments have not made emission reductions a priority.  Since the start of the program NYSERDA has allocated $98.8 million to programs that directly reduce utility emissions by 199,733 tons, $702.7 million for programs that indirectly reduce utility emissions by 1,205,780, and $348.1 million for programs that will increase utility emissions by 678,804 tons.  In the last category, the GHG emission savings listed are the benefits for switching from gasoline and diesel to electric vehicles.   

Furthermore, this post shows that NYSERDA has not addressed this concern for future investments either.  The proposed Amendment to the Operating Plan allocates only 22% to programs that directly, indirectly, or could potentially decrease RGGI-affected source emissions.  Programs that will add load that could potentially increase RGGI source emissions total 37% of the investments.  Programs that do not affect emissions are funded with 29% of the proceeds and administrative costs total another 8%. 

There is one other notable aspect of the NYSERDA funding in the Draft Amendment – there is no mention of the total revenues expected.  That value equals the number of New York allowances in the auctions times the expected allowance prices.  I believe that NYSERDA will have between $342 and $426 million in FY25-26.  John Williams stated that in the NYSERDA budget “RGGI allowance sales account for $191 million” at 15:30. Also note that the Funding Status report annual cumulative investments for the programs described with benefits totals $1.1 billion whereas the cumulative total revenues in the Operating Plan Amendment are $2.4 billion.  The difference in those two values represents even more money not likely to address the need for electric sector emission reduction programs.  In my opinion, the lack of a clear description reconciling these differences is at least in part due to NYSERDA recognizing that there is no non-incriminating way to explain it.

Conclusion

Given my decades-long background in the electric sector, it is not surprising that I have compliance concerns.  In all my comments to NYSERDA on their operating plan amendments I have argued that funding priorities over emphasize Climate Leadership and Community Protection Act (Climate Act) initiatives at the expense of the electric generating unit RGGI emission goals.  I take the simple position that RGGI was promulgated as an emission reduction program for the electric generating sector.  The failure of affected sources to comply with the RGGI compliance requirements has ramifications.  Sas a final point of emphasis, NYSERDA does not acknowledge that because fuel switching opportunities are no longer available that affected sources can only comply by reducing or stopping operations. To prevent that from occurring, NYSERDA investments must displace the generation needed from RGGI-affected sources because that is the only compliance option left with no reliability implications.

I conclude that NYSERDA must reassess its program funding priorities to ensure that sufficient funding is available for programs that displace electric sector generation to zero-emissions sources.  If NYSERDA provided a comprehensive explanation of all the emission reduction strategies in the Scoping Plan along with the expected emission reductions, anticipated costs, and potential sources of funding for their strategies then it would be possible to check that NYSERDA has planned for the necessary reductions via other programs.  If NYSERDA published documentation of their response to submitted comments on their Operating Plan amendments, they could have explained their strategy for RGGI compliance. The lack of transparency precludes that reassurance.

Implications of NYSERDA RGGI Funding Status Report Status Results

This is the second article in a series of three on the status of the New York component of the Regional Greenhouse Gas Initiative (RGGI) as administered by the New York State Energy Research & Development Authority (NYSERDA).  This is timely because on December 18, 2024, the New York Assembly Committee on Energy held a public hearing to gather information about NYSERDA’s revenues and expenditures in order to gain a broader perspective on effectiveness of NYSERDA’s programs. 

In the first article I evaluated Environmental Protection Agency (EPA) emission data and NYSERDA documentation and found that the investments funded by RGGI auction proceeds would have been only 4.2% higher if the NYSERDA program investments did not occur.  There are unacknowledged ramifications of this emission reduction performance relative to future NYSERDA program investments and RGGI compliance mandates.

Background

I have been involved in the RGGI program process since its inception.  I blog about the details of the RGGI program because very few seem to want to provide any criticisms of the program.   I submitted comments on the Climate Act implementation plan and have written over 480 articles about New York’s net-zero transition because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good because of impacts on reliability, affordability, and the environment.  The opinions expressed in this post 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.

RGGI is a market-based program to reduce greenhouse gas emissions (GHG) (Factsheet). It has been a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector since 2008.  New Jersey was in at the beginning, dropped out for years, and re-joined in 2020. Virginia joined in 2021 but has since withdrawn, and Pennsylvania has joined but is not actively participating in auctions due to on-going litigation. According to a RGGI website:

The RGGI states issue CO2 allowances that are distributed almost entirely through regional auctions, resulting in proceeds for reinvestment in strategic energy and consumer programs.

Proceeds were invested in programs including energy efficiency, clean and renewable energy, beneficial electrification, greenhouse gas abatement and climate change adaptation, and direct bill assistance. Energy efficiency continued to receive the largest share of investments.

On a quarterly basis permits to emit a ton of CO2 or allowances are auctioned by RGGI.  The electric generating units that have RGGI compliance obligations must surrender one allowance for each ton emitted during the compliance period.  In theory, States invest the proceeds to reduce emissions indirectly through energy efficiency programs and directly through the deployment of renewable energy that displaces fossil fired generation and supporting carbon abatement technology.  This article describes the implications of NYSERDA RGGI program emission reduction effectiveness and funding priorities on these compliance obligations.

NY Electric Generating Unit Emission Reductions

In my New York RGGI Funding Status Report Status Through 2023 post I used EPA emission data and NYSERDA documentation to determine the effect of the investments funded by RGGI auction proceeds.    In 2000, New York EGU emissions were 57,114,439 tons and in 2023 they were 28,889,913 tons, a decrease of 49%.  Figure 1 plots these data and shows emissions by fuel type.  Clearly, fuel switching is the primary driver of the observed reductions.  Since the start of the RGGI program I estimate that emissions from RGGI sources in New York would have been only 4.2% higher if the NYSERDA program investments did not occur.  The Figure 1 graph also shows that the opportunity to make further emission reductions by switching fuels is no longer available.

Figure 1: New York State Emissions by Fuel Type

New York RGGI Program Investment Reductions

Table 1 lists data from Semi-Annual Status Report through December 2023  Table 2: Summary of Total Expected Cumulative Annual Program Benefits including the cumulative annual costs of investment programs and annual tons of carbon dioxide equivalent (CO2e) saved by the investments.. The report notes that: “NYSERDA begins tracking program benefits once project installation is complete and provides estimated benefits for projects under contract that are not yet operational (pipeline benefits).“   The report presents “expected quantifiable benefits related to carbon dioxide equivalent (CO2e) reductions, energy savings, and participant energy bill savings with expended and encumbered funds” but I only consider the CO2e reductions.  Note that the emission savings evaluated in the report include carbon dioxide, methane, and nitrous oxide.  In the original table “lifetime” savings are included.  I did not use “lifetime” savings data because I am trying to compare the RGGI program benefits emission savings reductions to the RGGI compliance metric of an annual emission cap.  Lifetime reductions are clearly irrelevant. 

Table 1: RGGI Funding Status Report Table 2: Summary of Total Expected Cumulative Annual Program Benefits

NYSERDA RGGI proceed investments can produce CO2 emission savings from RGGI-affected electric generating units in two ways: directly by displacing natural gas generation by deploying zero-emissions resources or indirectly by reducing the amount of load that the affected units must provide.  I assumed that the indirect investments reduced load that directly offset RGGI-affected sources.  This has been a good assumption because load growth has been stalled but with electrification of buildings and transportation and the addition of data centers and large load centers, the presumption that indirect NYSERDA investments will reduce emissions will become weak. 

Table 2 compares the observed emissions to the NYSERDA emission savings.  These results show that emissions from RGGI sources in New York would have been only 4.2% higher if the NYSERDA program investments did not occur.  However, that estimate is an overestimate of the capability of NYSERDA investments to reduce RGGI-affected source emissions.  NYSERDA estimates of emission savings include methane and nitrous oxides, but RGGI compliance is only for CO2.  The presumption that programs that indirectly reduce emissions has qualifications that reduce the actual reductions.  The NYSERDA savings number also includes savings from programs that will not reduce RGGI-affected units’ emissions as shown in the next section.

Table 2: NY Electric Generating Unit Emissions, NYSERDA GHG Emission Savings from RGGI Investments, and Emissions by Fuel Type

NYS RGGI Funding Priorities

Table 2 overestimates relevant savings because of RGGI funding program priorities.  The October 2024 New York State Funded Programs report describes the funding priorities for the auction proceeds:

The State invests RGGI proceeds to support comprehensive strategies that best achieve the RGGI CO2 emission reduction goals. These strategies aim to reduce global climate change and pollution through energy efficiency, renewable energy, and carbon abatement technology. Deploying commercially available renewable energy and energy efficiency technologies help to reduce greenhouse gas (GHG) emissions from both electricity and other energy sources in the short term. To move the State toward the goals enacted by the Climate Leadership and Community Protection Act (Climate Act) and a more sustainable future, RGGI funds are used to empower communities to make decisions that prompt the use of cleaner and more energy-efficient technologies that lead to both lower carbon emissions as well as economic and societal co-benefits. RGGI helps to build capacity for long-term carbon reduction by training workers and partnering with industry. Using innovative financing, RGGI supports the pursuit of cleaner, more efficient energy systems and encourages investment to stimulate entrepreneurial growth of clean energy companies. All these activities use funds in ways that accelerate the uptake of low- to zero-emitting technologies.

Table 2 is misleading in the context of RGGI compliance obligations because not all the savings will affect RGGI emission sources.  There is a significant fraction of RGGI funds that goes to programs that increase rather than decrease electric generating unit emissions.  In Table 3, I categorized programs relative to RGGI compliance obligations.  The table breaks down the program allocations and expected annualized CO2 savings for three categories: direct reductions to RGGI sources, indirect reductions, and those programs that will actually increase electric generating emissions. For example, Charge NY is NYSERDA’s Clean Transportation Program that “has been pursuing five strategies to promote EV adoption by consumers and fleets across New York”.   The results in the Funding status reports show that since the start of the program NYSERDA has allocated $98.8 million to programs that directly reduce utility emissions by 199,733 tons, $702.7 million for programs that indirectly reduce utility emissions by 1,205,780, and $348.1 million for programs that will increase utility emissions by 678,804 tons.  In the last category, the GHG emission savings listed are the benefits for switching from gasoline and diesel to electric vehicles.   When those savings that do not affect RGGI source emissions are removed, total savings are 1,297,297 and the emissions from RGGI sources in New York would have been only 2.8% higher if the NYSERDA program investments did not occur.

Table 3: Summary of Expected Cumulative Annualized Program Benefits through 31 December 2023 for Programs that Directly, Directly, or Do Not Affect RGGI CO2 Emissions

Discussion

The results of NYSERDA RGGI funding have important and unacknowledged ramifications.

The comparison of observed electric generating unit emission reductions by fuel type clearly show that historical reductions were the result of fuel switching.  In addition, it is obvious that all that low-hanging fruit is gone.  Nonetheless, many ill-informed voices are clamoring for stricter RGGI emission reduction trajectories begging the question – where will the emission reductions come from?  It does not seem that NYSERDA RGGI investments will help the affected sources meet their compliance obligations.

I did not mention the observed cost per ton saved in Table 1.  It is not very encouraging that NYSERDA program investments cost $582 for each ton saved.  At that rate, New York will have to invest $16.8 billion to achieve the Climate Leadership & Community Protection Act 2040 electric sector zero-emissions mandate.  In the first 15 years New York RGGI auction proceeds are a little over $2 billion based on the sale of 480.4 million allowances.  Assuming a RGGI straight line reduction to zero by 2040, 231 million total allowances will be allotted by 2040.  At the $582 cost per ton rate the RGGI allowance price would have to be $73 per ton to provide sufficient funding to meet the compliance targets.

There is a huge assumption relative to the $73 allowance price funding necessary to achieve the zero-emissions by 2040 mandate.  I assumed that all the RGGI proceeds would be allotted to programs that directly or indirectly reduce emissions at electric generating stations.  Table 3 shows that for the programs that produce quantifiable benefits 32.6% of the proceeds goes to programs that increase RGGI emissions.  It is much worse than that.  In my next article in this series I will document how the latest Draft RGGI Operating Plan Amendment allocates funds to programs.  Spoiler alert only 22% goes to programs that will provide direct or indirect emission reductions.

Conclusion

This analysis of the latest NYSERDA RGGI funding plan document has important implications to New York’s plans to implement a Cap-and-Invest (NYCI) program.  RGGI is touted as a successful model for NYCI to emulate but the poor emission reduction performance suggests that the presumption that NYCI will be an effective emission reduction program is misplaced. 

There is another important issue.  NYSERDA has not acknowledged that electric generators have no options to reduce their emissions to comply with RGGI.  In the future those facilities can only meet compliance requirements if zero-emissions resources displace their generation and emissions.  If there are insufficient investments to reduce generation at the RGGI-affected sources there will be compliance issues.  The only option for affected sources to comply is to reduce or stop operations.