This story was updated on March 2nd with additional information about how the Governor is seeking to allocate Regional Greenhouse Gas Initiative funds this year.
New York City, and the rest of the state, is bracing itself for the mounting impacts of climate change. But environmental and clean energy groups are calling foul as Governor Cuomo seeks to divert millions from a “climate abatement” fund, and move those resources into the state’s general pot.
As we reported last week, projections for sea level rise, temperature, and precipitation in New York City through the year 2100 are now available for the first time.
Area sea level could rise 11-21 inches by the 2050s, and 18-39 inches by the 2080s. By 2100, sea level could increase by as much as six feet, according to a report released by the New York City Panel on Climate Change.
Governor Cuomo has directly linked destructive storms like Sandy to the state’s changing climate. And he has made the expansion of renewable sources of energy, like solar, a priority for his administration.
But, at the same time, the Governor wants to divert $36 million this year from the Regional Greenhouse Gas Initiative, a “wildly successful” carbon trading program in which New York and eight other states participate. RGGI is designed to cap and reduce power sector CO2 emissions.
The sum that the Governor wants to divert is not insignificant. Last year, New York State received almost $145 million from RGGI’s carbon allowance auctions. That money is supposed to go toward energy efficiency and renewable energy projects across the state. Governor Cuomo is seeking to re-route about one-fourth of that amount this year.
What the Governor is proposing could be seen in two different ways: 1.) re-routing RGGI funds to support other important environmental priorities; or 2.) re-routing RGGI funds to fill budget gaps that the State arguably already has the means to address.
Paying for Carbon Pollution
RGGI includes New York State, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island and Vermont. It is the “first mandatory, market-based CO2 emissions reduction program in the United States.”
New Jersey was a participant in RGGI but Governor Chris Christie pulled the state out of the program in 2011.
Power plants in RGGI states must pay to emit carbon pollution. They participate in “auctions” in which they purchase “carbon allowances.” The price for these allowances is guided by a cap on how much carbon all RGGI states can collectively emit.
The idea is to keep lowering the cap in order to raise the allowance price- thus incentivizing power plants to switch to less polluting sources of energy.
RGGI has implemented a new carbon emissions cap of 91 million short tons for participating states. That cap is supposed to decline 2.5 percent each year from 2015 to 2020.
Does RGGI Work?
Supporters say RGGI is a national model for reducing carbon emissions and accelerating the use of renewable sources of energy.
Climate pollutant emissions from power plants across the region have dropped by more than 40-percent since RGGI was initiated in 2005, a coalition of 26 environmental and clean energy groups wrote in a February 10th letter to Governor Cuomo.
The program has raised almost $2 billion from auction proceeds across the nine participating states since 2008. RGGI has “defied critics by proving that reducing climate-altering pollution in a way that raises funds for clean energy is a true win-win,” says Albany watchdog group Environmental Advocates.
New York, as the largest state in the coalition, and the one with the most pollution emitted, received a little more than one-third of all RGGI proceeds in 2014. The funds are managed by the New York State Energy Research and Development Authority.
Since its inception, RGGI has raised more than $728 million for clean power, energy efficiency, technology innovation and green workforce development projects across New York State, says Environmental Advocates. Projects have been initiated in every county in the state.
Buildings = Carbon Pollution
A major portion of RGGI funds have been directed toward making the state’s residential building stock more energy efficient. New York’s buildings -residential, commercial and industrial- are the state’s second leading emitter of greenhouse gases, surpassed only by the transportation sector.
In New York City, buildings are the number one source of carbon pollution.
RGGI has paid for over 30,000 free or reduced-cost energy audits for New York State homeowners. It also helps to fund low-cost energy efficiency retrofits for single and multi-family buildings.
What’s the Danger in Redirecting RGGI Funds?
As part of this year’s budget negotiations, the Governor wants to redirect $23 million in RGGI proceeds towards the state’s General Fund, Travis Proulx, Environmental Advocates’ communications director told us.
Those proceeds would help to offset “various energy related tax credits.” The Governor’s plan sets a bad precedent, say environmental groups. Funds that are supposed to be dedicated for renewable energy and energy efficiency projects should not be free for the taking, they argue.
“This diversion could threaten the integrity of RGGI in New York and cause a ripple effect throughout the region if other states also choose to shift carbon allowance revenues away from their intended use,” said the environmental and clean energy groups in their letter to the Governor.
Environmental Funds Up for Grabs
The Governor’s re-direction of RGGI dollars could also undermine another important source of funding for environmental projects.
Cuomo wants to use an additional $10 million in RGGI proceeds, Proulx said, to make an increase to the state’s Environmental Protection Fund. The problem with that idea is that the EPF already has a dedicated funding source but, that too, has been systematically raided for the General Fund.
The EPF is supposed to be replenished by proceeds from the Real Estate Transfer Tax, along with other state revenue streams, like the Bottle Bill.
[Another $2 to $3 million in RGGI proceeds will go to the EPF, said Proulx. Not as an increase but to “continue to account for the underuse of the Real Estate Transfer Tax in meeting expected funding of the program.”]
Since the establishment of the Environmental Protection Fund in 1993, $2.1 billion has been disbursed toward environmental projects across New York State. But another $928 million has been “swept” from the EPF to the state’s General Fund for budget relief.
Environmental groups across the state have been pushing the Governor to bring the Fund back to pre-recession levels. Raiding one dedicated environmental fund to partially replenish another raided fund, is not a responsible approach, they say.
“The EPF is a proven job generator which has created parkland, protected farmland, and supported local recycling programs – it deserves an increase that doesn’t pit environmental programs against each other,” the groups, such as the NY Public Interest Research Group and the Natural Resources Defense Council, wrote in their letter to the Governor.
“We urge the Senate and Assembly to support an increase to the EPF that doesn’t come at the expense of RGGI,” they concluded.
We’ve reached out to Assemblymember Steve Englebright, the new chair of the State Assembly’s Environmental Conservation committee, to see what he thinks of the Governor’s budget proposal. Englebright, a Democrat from Long Island, is a supporter of a major wind energy project off the Long Island coast.
We’ll keep you posted about Englebright’s response, and how the state budget negotiations are shaping up.
But the bigger question is how best to prepare New York State for climate change head-on. State and local governments, like the de Blasio administration, are focused on both reducing carbon emissions, and determining how to most effectively protect residents and critical infrastructure.
“RGGI has proven that the state can take aggressive action on climate while stimulating economic growth. As proud as we are of this program, it is only a piece of the pie and not a substitute for a clear and comprehensive climate action plan,” said Conor Bambrick, Environmental Advocates’ Air and Energy director, last December.
“Governor Cuomo should deliver the framework of a real climate action plan – which includes but is not limited to expanding RGGI,” Bambrick concluded.