New York Gov. Kathy Hochul backs bill to bring greenhouse gas accounting rules in line with other states

April 5, 2023

Originally published in The Washington Post. Analysis by .

New York Gov. Kathy Hochul (D) is backing a proposal to change the state’s method of accounting for greenhouse gas emissions, after state modeling estimated significant cost increases for buying gas and heating homes.

Amid outcries from environmentalists, Hochul has defended the change, saying the current accounting system could saddle consumers with additional costs.

“It’s clear that cost is an issue that needs more attention and we are working with the legislature to explore options to address it, and we remain committed to securing a state budget that includes the most impactful climate initiatives in recent history,” Hochul spokeswoman Katy Zielinski said in an email.

While the proposal is highly technical, it could undermine the landmark climate law that New York passed in 2019, environmentalists say.

“What appears to be a dorky accounting change is in fact a severe weakening of the climate law,” Pete Sikora, climate and inequality campaigns director for New York Communities for Change, told The Climate 202.

The details

The 2019 climate law, known as the Climate Leadership and Community Protection Act, requires New York to reduce greenhouse gas emissions 40 percent below 1990 levels by 2030 and 85 percent by 2050.

To determine whether a proposed project is consistent with these climate goals, state agencies must account for the harmful effects of the project’s emissions over a 20-year period.
  • New York is one of only two states that uses the 20-year metric; Maryland is the other.
  • Under the change backed by Hochul, New York would shift to the 100-year international standard used by other states and the federal government.

The Hochul administration says the current accounting method would burden consumers with higher energy costs under the state’s proposed cap-and-invest program.

  • Cap-and-invest programs set a limit on overall emissions in a state and require large polluters to purchase “allowances” for their emissions at auctions.
  • California, Oregon and Washington state have already established cap-and-invest programs. Hochul in January directed New York agencies to begin crafting a similar program.
  • However, Hochul administration officials fear that large polluters could pass along the compliance costs to consumers. According to their modeling, under the current accounting system, it would cost New Yorkers 61 percent more to buy a gallon of gas and 80 percent more to heat their homes when the cap-and-invest program takes effect.

“When we advance that [cap-and-invest] proposal, we need to look at it through the lens of affordability,” Doreen Harris, president and chief executive of the New York State Energy Research and Development Authority, told The Climate 202. “And ultimately, this topic of our accounting has a very significant impact on costs.”

Basil Seggos, commissioner of the New York Department of Environmental Conservation, said in a joint interview with Harris that the new accounting method would not prevent state agencies from rejecting proposed projects that are incompatible with the climate law’s goals.
Seggos added that the cap-and-invest program, for which draft regulations are expected this summer, will have benefits that outweigh the costs.

“No matter what accounting system we use, there is still that big net benefit,” he said. “What we’re concerned about now is the short-term cost on consumers.”

The view from environmentalists

But critics say the state’s current approach more accurately reflects the harmful effects of methane, a potent greenhouse gas and the main component of natural gas. During its first 20 years in the atmosphere, methane traps more than 80 times more heat than carbon dioxide.

“This change would make methane emissions appear much less damaging than they actually are,” Shiv Soin, co-executive director of TREEage, a youth-led environmental group based in New York City, told The Climate 202.

New York State Senate Energy Committee Chair Kevin Parker (D), who proposed the change in a bill last week as part of negotiations over the state’s budget, did not respond to a request for comment.

The view from gas utilities

National Grid, the biggest electric and natural gas utility in New York, has also called for the state to align its accounting method with international standards.

“Accounting methods should be standardized across our state and federal jurisdictions, and they should be as consistent as possible with international standards,” the utility wrote in a report last year.

Zielinski, the Hochul spokeswoman, said the governor has not discussed the issue with any representatives of the gas industry, including any National Grid officials.

National Grid spokeswoman Karen Young said in an email that the utility has not taken a position on the accounting proposal.

The budget and building electrification

Despite their disagreement over the accounting method, Hochul and environmentalists have both supported a ban on fossil fuel appliances in new buildings. Such a ban is expected to be included in the state budget for fiscal 2024.

  • Hochul in January endorsed banning fossil fuel appliances in new buildings by 2025 for single-family homes and by 2028 for larger or commercial buildings.
  • If New York bans fossil fuels in new buildings, it would become the first state to do so legislatively. (California and Washington state have encouraged electrification through updates to their building codes.)
  • The New York state legislature was originally due to pass the budget last weekend but encountered several delays.

Lawmakers are now expected to pass the budget, including the ban, later this month after taking a break for Easter and Passover.