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New York state lawmakers Wednesday said they’re frustrated and disappointed that Gov. Kathy Hochul has delayed the implementation of a cap-and-invest system to generate revenue for green energy projects.
Hochul’s legislative agenda for the year — outlined in Tuesday’s State of the State address in Albany — was void of a proposal for a cap-and-trade system that the governor promised she’d release by the end of last year.
The program, mandated by state law, would require companies to buy credits from the state to contribute to its greenhouse gas emissions. It would also fund rebates to reduce utility costs for taxpayers.
At the end of the year, Hochul’s office floated a draft plan with varying funding levels to stakeholders, who anticipated a proposal in the upcoming executive budget.
"They haven’t talked to anybody," said Sen. Kevin Parker, a Democrat from Brooklyn. "They haven’t had hearings, they don’t know what the community thinks, (and) they haven’t talked to the Legislature with their ideas about it."
Parker said he’s finalizing a proposal to create the emerging system as mandated under the 2019 Climate Act.
The senator said Hocul and her team failed to tell policymakers about their new hesitancy to impose cap and trade after codifying language in the 2023-24 budget to create a fund to impose the program this year.
"They said ‘We’ve got it, we’ll come out with rules,’ and now, they said they’re not ready," the senator said.
The delay of the program means the system will not be in place to generate revenue for the state’s green energy mandates until at least 2027, and increases the chances lawmakers will have to rollback its ambitious emission reduction mandates set under its climate law.
Hochul on Wednesday defended her decision to delay the program’s rollout and said the state needs more pollution data to get the program right. She insisted her support for New York’s climate mandates have not faltered.
"This simply says we can study here, we’ll get the right information, we’ll get it right," Hochul told reporters. "But I’m not letting these projects go unfunded. I think that’s an important distinction to make here."
In her speech, Hochul touted last month’s signing of the Climate Superfund Act, which created a $3 billion fund that fossil fuel companies would be forced to pay into it annually for 25 years.
"It should be the big corporate polluters who should pay for the consequences of climate change instead of New York taxpayers," Hochul said to a crowded theater at The Egg.
But lawmakers said Hochul needs to put the money where her mouth is.
"What was disappointing was that there was no mention of climate change, the environment, or specifically cap and invest pertaining to climate change," Senate Environmental Conservation Committee chair Pete Harckham said Wednesday of the governor’s speech.
"Let’s hope the approach to climate policy is not changing," he added. "It’s greatly disappointing, but more importantly, it’s a missed opportunity to address climate change and a missed opportunity to address affordability in utility rates."
Other top Democrats stand ready to fight back this budget cycle — arguing the policy is critical to bridge the state’s affordability gap that Hochul focused on in her speech. The system’s imposed fee on polluters would fund rebates for consumers to drive down utility costs.
Senate Finance Committee chair Liz Krueger expressed her extreme disappointment that Hochul failed to include NY HEAT Act and cap and invest in her State of the State after championing both proposals.
"She said herself that we are the last generation who can do anything to stop the most catastrophic impacts of climate change, but then missed the major opportunities to do so," Krueger said in a statement. "She is also choosing not to save ratepayers billions of dollars every year through NY HEAT or provide low- and middle-income New Yorkers the immediate affordability benefits of cap and invest."
Critics have expressed concern the cap-and-invest system would increase gas prices and costs of natural gas and other utilities.
Republican lawmakers are praising the governor for delaying the timeline, and said it validates their push to pull back on climate proposals they fear will drive up costs for ratepayers.
"The speed in which they’re moving forward is really unworkable, not feasible and very, very costly," said Assemblyman Phil Palmesano, the ranking Republican on the Energy Committee. "It’s a radical energy climate agenda that’s really going to be borne by ratepayers and businesses."
Lawmakers and environmental advocates argue the continuing costs of climate change are higher than waiting to address it — especially as taxpayers foot the bill for an increase of natural disasters like the recent California wildfires.
The delay has also prompted questions from lawmakers about how it could impact the strict timeline of the state’s other climate mandates.
"The longer we wait, the harder it will be to meet those," New York League of Conservation Voters President Julie Tighe told Spectrum News 1. "And generally speaking, the more expensive it will get. Most infrastructure projects don’t get cheaper over time, they get more expensive, so trying to move things along sooner rather than later also provides a longer time frame over which to help get those reductions."
Hochul will unveil her executive budget proposal next week, but the spending plan is not expected to include cap and trade details as the governor’s office analyzes more pollution data.
