As recently as a few weeks ago, New York climate advocates were hearing that Hochul planned to preview the program in her State of the State address before including it in her proposed budget. “All indications were that this was all systems go,” Justin Balik, the senior state program director for Evergreen Action, told me.
But Hochul didn’t mention cap and invest once in her speech. Her State of the State policy book, published Tuesday, acknowledges the program and notes that in the coming months, her administration will propose new emissions reporting regulations “while creating more space and time for public transparency and a robust investment planning process.” Advocates interpreted the message as a kiss-off.
“There have to be enforceable regulations that ensure we can meet the emission reduction mandates,” Rachel Spector, a senior attorney at Earthjustice, told me. “Those were supposed to be in place a year ago. Now they are late and there’s no clear date when we are getting those regulations, and that’s a really troubling situation.”
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Governments miss statutory deadlines all the time. But without any clear timeline on when the regulations might happen, the state’s overarching climate law could become impossible to carry out. “We have a [presidential] administration that’s coming in that's extremely hostile to moving forward on climate mitigation, and is going to potentially take us backwards,” Balik told me. “And so we need states to be the bulwark like they were during the last Trump term.”
There are a few possibilities for what can happen next.
Michael Gerrard, director of the Sabin Center for Climate Change at Columbia University, likened the situation to when Hochul tried to impose an indefinite delay on congestion pricing in New York City last June, just days before it was set to go into effect. “I helped coordinate an effort that led to two lawsuits in New York state court claiming that Hochul did not have the power to do that,” he told me in an email. “We won the lawsuits, congestion pricing survived several lawsuits against it, and it launched on January 5.”
Gerrard added that some of the groups involved in those suits and others are now considering challenging Hochul’s indefinite delay of cap and invest. The text of the Climate Leadership and Community Protection Act, which created the emissions targets, “allows citizens to bring proceedings in state court for violations of the statute,” he said. And there does not appear to be any pathway for achieving the targets without cap and invest, he added.
Liz Moran, a policy advocate for Earthjustice, said that cap and invest was never going to be enough anyway, and is urging the legislature to make progress on sector-specific policies. She called for the state assembly to pass the New York Heat Act, for instance, a bill that would remove barriers to transitioning away from the use of natural gas for home heating and set in motion a plan for mass conversion to efficient electric heating.
Early outlines of New York’s cap and invest program indicate that regulators were considering a relatively low price ceiling on pollution, making it easier for companies to buy their way out of compliance with the cap. As New York Focus has reported, the state’s own modeling shows that the program alone would not achieve the 2030 target. “Given what the governor has outlined as the ambition of the cap and invest program, there was always going to need to be additional sectoral mandates or policies that come from the legislature to drive emission reductions,” Moran told me.
In theory, the legislature could also put forward a bill outlining its own cap and invest program. Assemblywoman Anna Kelles, from Ithaca, New York, introduced a cap and invest bill last year, though it never left the environmental conservation committee.
Hochul spoke at length in her speech about affordability, and her stalling of cap and invest may be related to concerns that it would raise costs for consumers — or at least the perception that it would. “New York needs to get the transition right and keep our state affordable for families,” her policy book says. This would not be the first time Hochul’s fears about the cost of climate action (and potential backlash to it) have caused her to do an about-face. In 2023, Hochul tried to change the way the state accounted for greenhouse gas emissions under the idea that it would lower the cost of decarbonization. Her backpedaling on congestion pricing is another example.
The state’s own analysis, however, found that cap and invest would likely raise costs slightly for some New Yorkers while lowering them for others. Low-income residents would be eligible for direct rebates that would more than offset the higher cost of fuel. Depending on how the remaining revenue is spent, it could bring further cost reductions by helping New Yorkers pay for energy efficiency improvements that lower their bills.
“The governor is rightly focused on affordability, which is why extensive consumer rebates were baked into this,” said Balik. “From our perspective, the way that the state was planning on moving forward with this was perfectly in line with the governor's affordability agenda.”
The one bit of climate action Hochul did commit to on Tuesday was to call for spending $1 billion of the next budget on climate action — the “largest climate investment in the history of the state budget” — though she did not say where the money would come from or where it would go. Her State of the State book gives little more detail, noting only that it will “span different sectors of our economy and across the state’s geography,” with nods to clean heating and transportation projects. Cap and invest, meanwhile, is expected to bring in $3 billion to $5 billion in its first year.
“It's a start,” Spector said of the $1 billion. “But it’s definitely not enough.”
NEADA and CEPC
5B
