The bill determines how the money generated by the program will be spent, but does not include protective measures for disadvantaged communities., environmentalists warn.
Parts of Cap-and-Invest, a state program that will charge companies for carbon pollution, has become New York Statefor next year. While the spending bill doesn’t mention him by name, it lays the foundation for how money generated by the program would be spent in the future.
The text of the bill guarantees that no less than 30 percent of the proceeds will go to a rebate initiative that Gov. Kathy Hochulwould help “cover utility bills, transportation costs, and decarbonization efforts” for all New Yorkers as the state continues to move away from fossil fuel use to reach
Specifically, 3 percent of the funds will go toward reducing the “potential increase in costs” small businesses face as they transition to clean energy, while the remaining two-thirds will go toward a climate investment fund that would help address climate change mitigation efforts.
Environmentalists hailed the move, along with other climate policies that were included in the sprawling $229 billion state budget, including thethat will ban gas hookups in new building construction (the city passed a similar measure in 2021), and another bill that greatly expand its use of renewable energy sources, including through publicly owned projects.
At Cap-and-Invest, supporters were happy to see the budget confirm some components of the proposal, but cautioned that important measures to protect disadvantaged communities were left out and details about how it will actually be designed have yet to be determined. the program. .
“The final budget established the general framework on what to do with the income [generated from the program]said Liz Moran, environmental policy advocate at EarthJustice. “But we still don’t know exactly what this program will look like until a rulemaking process begins.”
A Cap-and-Invest program generates revenue by setting a limit on how much companies can pollute. That cap gets stricter over time until New York’s greenhouse gas emissions are reduced by at least 85 percent by 2050, according to state law..
Companies that exceed their carbon emissions limits will need to purchase a permit to continue operating above that threshold. The money obtained from that sale will be used by the state to fight climate change. And the budget guarantees that those investments will include “measures that prioritize disadvantaged communities,” since they must receive at least 35 percent of the total benefit..
Still, environmentalists warn that the bill doesn’t do enough to ensure pollution is reduced in underserved communities that aremore susceptible to environmental injustice.
“What left the account [out]What we think is really important is the inclusion of strong guardrails to protect disadvantaged communities,” said Alex DeGolia, director of state legislative and regulatory affairs for the nonprofit Environmental Defense Fund.
Environmental groups have pushed for one “guardrail” in particular: putting a limit on the number of companies that can trade and sell the allotments they purchase from the state.
In most Cap-and-Invest programs, a company that did not exceed its emissions cap and ended up not using its permit could trade or sell its permit to a company that exceeded its threshold. Environmentalists argue that companies located within a disadvantaged community could theoretically simply purchase an allotment from another company and avoid cutting emissions in hotspots where residents are already exposed to increased pollution and its negative health effects.
To ensure disadvantaged communities don’t get the short end of the stick, environmental coalitions like New York Renews have been fighting for the creation of the Community and Climate Protection Fund, which would earmark $10 billion in proceeds of a variety from sources, including Cap-and-Invest: for communities, workers and small businesses.
In March, Senator Peter Harckham sponsoredstart the fund. Harckham’s bill would distribute money earned from state programs into four separate accounts to fund things like grants for grassroots initiatives to reduce local emissions, job training for affected workers, and lower energy costs for small businesses. .
While language directly mentioning the fund was not included in Hochul’s budget this year, Harckham told City Limits that it lays the groundwork for the fund to enter the state’s rulemaking and regulatory process in the future.
“We believe the legislature still has a say in this conversation. So we will follow it,” Harckham said. “There is more work to be done here. But it was an important first step.”