Progress in Cap-and-Invest Program
By Maya Gerber, ACE NY Intern
Progress continues on the design of New York’s Cap-and-Invest Program (NYCI). The stated goal of this program is to help the state meet its greenhouse gas emission (GHG) reduction requirements of 40% below 1990 levels by 2030 and 85% below that level by 2050, in accordance with the Climate Leadership and Community Protection Act, while also providing needed funds for the green energy transition. Two key documents were recently released: The Pre-Proposal Outline and Climate Affordability Study, will help provide a framework for the program. The Climate Action Council’s Scoping Plan has provided an outline for how New York will reduce GHG emissions and eventually achieve net-zero emissions through the NYCI. An increase in renewable energy coupled with robust stakeholder engagement is critical to the success of the NYCI. More information on NYCI can be found on the Cap-and-Invest website. The Pre-Proposal Outline includes the following mandates:
Mandatory Greenhouse Gas Reporting Program Rule: Identifies the type of greenhouse gas emission sources that would be reporting to the DEC
Cap-and-Invest Rule: compliance obligations under NYCI, and ensures that that all GHG emissions are accounted for and reduce at the proper rate
Auction Rule: Describes allowance auctions and the mechanisms to protect the integrity of the auctions
The goals of NYCI include the following: (1) Affordability (2) Climate Leadership (3) Creating Jobs and Preserving Competitiveness (4) Investing in Disadvantaged Communities (5) Funding a Sustainable Future. The NYCI is currently in the second stage of pre-proposal outreach. Use the Stakeholder Feedback Page to sign up for future meetings and access past recordings of NYCI stakeholder meetings.
Former ACE NY Executive Director Anne Reynolds made the following comments after the release of the Pre-Proposal Outline: “The cap-and-invest policy is a cornerstone of New York’s Climate Scoping Plan – not just because it would create the cap on carbon pollution that declines over time, but because it would generate funds to help pay for implementation of the rest of the plan. It’s very good news that New York is demonstrating progress with the release of the Pre-Proposal Outline of regulations. The Climate Act directs us to get the regulations in place to implement the plan in 2024, so there is really no time to waste.
“Page 12 of the Pre-Proposal Outline released indicates that DEC is still seeking comments on whether to include the electricity sector in this policy. It is the position of ACE NY that the cap-and-invest policy should include the electricity sector, as ACE argued in comments submitted this past August.” (ACE NY's Comments on Cap-and-Invest)
NYSERDA has initiated a procurement process to solicit platforms and services necessary for the NYCI program to succeed. These include emissions reporting, a market registry platform, auction platform and market monitoring and financial services. Responses to this can be submitted on the portal page and are due by Feb. 12.
The Department of Environmental Conservation (DEC) and The New York State Energy Research and Development Authority (NYSERDA) are seeking feedback on the Pre-Proposal Outline and the three regulations listed above. Comments may be submitted through this form. Additionally, DEC and NYSERDA will be holding three virtual stakeholder meetings throughout January:
Jan. 23, 3 to 4:30 p.m. – The Role of Cap-and-Invest
Jan. 25, 1 to 4 p.m. – Pre-Proposal Outline Overview
Jan. 26, 11 a.m. to 2 p.m. – Preliminary Analysis Overview
The “Invest” aspect of NYCI is formed when GHG emitters pay their fees, those proceeds will then be put towards climate mitigation, energy efficiency, clean transportation, and other climate related projects. In addition to this, this funding will also be put towards an annual Consumer Climate Action Account that will be distributed to New Yorkers to mitigate any potential consumer costs associated with NYCI. Governor Hochul has estimated that NYCI will generate more than $1 billion in proceeds towards Cap and Invest proceeds. The program is designed based on other successful programs with similar goals and procedures. By applying a price to carbon, the goal is to incentivize consumers, businesses, and other entities to transition to lower-carbon alternatives which in turn will decrease their fees and help work towards decreasing carbon emissions.
ACENY has previously written on NYCI, during the Initial Stage of the Pre-Proposal Outreach, which can be found using this link: https://www.aceny.org/blog/new-yorks-cap-and-invest-policy-begins-to-take-shape.
Stay updated with the latest on NYCI with ACENY by using this page: https://www.aceny.org/climate-action
