New York’s Climate Law Is Cracking Under the Weight of Affordability Politics

New York Governor Kathy Hochul has been signaling her intent to rewrite the state’s climate law for months, arguing that achieving the existing emissions targets it lays out would impose “enormous” costs on New Yorkers. She finally revealed her proposal to do so on Friday, requesting new targets and more time to meet them. If she gets her way, New York would be the first state to renege on its climate goals.

More specifically, Hochul pitched moving the law’s deadline for enacting climate regulations from 2024 to 2030. She wants to establish a new emissions target for 2040 to replace one for 2030 that will now be all but impossible to meet, and to revise the existing 2050 target. She also wants to change the official accounting method the state uses to calculate emissions from shorter-lived greenhouse gases like methane — an idea she first floated during a budget fight in 2023. That would ease pressure to cut natural gas use and make the state look further along on its climate goals than it currently does. It would also align New York’s approach with the way the rest of the U.S. accounts for methane.

The governor can’t do any of this without the legislature, though. She’s pushing for the changes as part of closed-door budget negotiations with a March 31 deadline. Discussions did not get off on a promising foot: More than half the state Senate has rebuked her plan, with 29 Democrats penning a letter to say they “categorically oppose any effort to roll back New York’s nation-leading climate law.” It is the “fossil fuel status quo that has created the affordability crisis,” the senators wrote.

Environmental groups also reject the governor’s version of events, arguing that her proposal would threaten affordability rather than address it, and accusing her of giving in to fossil fuel interests.

Neither side is presenting a complete picture of the trade-offs, however. To back up Hochul’s assertion that the law as written would impose prohibitive costs on New Yorkers, her administration has relied on overly aggressive analyses that misleadingly frame climate action as a pure expense. At the same time, it's true that the regulations Hochul wants to delay would raise costs for many New Yorkers in the near term, with savings materializing later.

The dispute is emblematic of the way the cost of living crisis is deepening a tension at the heart of climate politics: Decarbonization often imposes real costs now in exchange for diffuse benefits later, which is a tough sell to voters who are finding it increasingly difficult simply to keep themselves afloat.

Hochul arguably got herself into this mess. The clash in New York dates back to 2024, when her administration missed the deadline to issue regulations that would ensure the state achieved its emissions targets.

At first it seemed like the regulations would simply come late. The state was developing a Cap and Invest program — essentially a carbon price that charges polluters for every ton they emit and delivers the proceeds back to consumers as rebates, incentives, and public benefit programs. State officials released a pre-proposal for the program in January 2024 that included a price ceiling to minimize cost impacts. It was expected to generate $3 billion to $5 billion in its first year.

At the time, Hochul’s administration painted a rosy picture of the program, arguing that it would accelerate emission reductions, especially as the state reinvested revenue into incentives for New Yorkers to switch to heat pumps and electric vehicles. While the cost for consumers of driving gas-powered cars and using oil and gas-burning heating systems would go up, “millions of households would break even,” officials said, after proceeds from the program were returned via direct payments and incentives. By 2030, they said, many would come out ahead.

Cap and Invest was never envisioned as New York’s only tool to ratchet down emissions. The state’s own modeling indicated that the proposal — even when implemented alongside other policies — would fall short of the state’s target of cutting emissions to 40% below 1990 levels by 2030 by at least 15%.

Then, after holding a series of public workshops on the pre-proposal, the administration went silent. In early 2025, Hochul shocked the climate community when she decided to delay the program indefinitely, citing affordability concerns. Environmental groups accused her of breaking the law, sued the state, and won. Last October, the New York State Supreme Court ordered Hochul to “promulgate rules and regulations to ensure compliance with the statewide emissions reductions limits.”

Hochul had two options. She could impose a tax on carbon in an election year when affordability had become the defining issue. Or she could ask the legislature to change the law’s deadlines.

That brings us to February, when a conveniently-timed memo leaked from the state energy office with the subject, “Likely Costs of CLCPA Compliance.” (CLCPA stands for Climate Leadership and Community Protection Act — the name of New York’s climate law.)

In order to “fully comply” with the law’s emissions limits, the memo says, the Cap and Invest program cannot have a price ceiling. The energy office estimated the carbon price would start at $120 per metric ton, although the memo says this is likely an underestimate because it was calculated before Trump revoked clean energy tax credits, rolled back vehicle emissions rules, and imposed costly tariffs that also raise the cost of clean energy projects. By comparison, the 2024 pre-proposal would have capped the carbon price at between $14 and $23 in the first year.

“Absent changes” to the climate law, the memo goes on to say, New Yorkers would be paying more than $2 more at the pump and an extra $17 per month on their heating bills by 2031 under Cap and Invest.

The environmental community was flabbergasted. The memo “represents modeling of a program that has not been on the table,” Kate Courtin, a senior manager on the state climate policy team at the Environmental Defense Fund, told me. The numbers “do not reflect any of the scenarios the state was looking at.”

The document appears to reflect a Cap and Invest program that would singlehandedly achieve the statutory targets, which other climate advocates I talked to framed as an absurdly literal reading of the court’s order.

“It feels very disingenuous, because no one is asking for that,” Liz Moran, a New York policy advocate at Earthjustice, told me. Earthjustice represented the environmental groups who sued the administration to compel Hochul to release a climate plan. “Our litigation is not about what is in the regulations,” she said. “It is about the fact that she did not issue regulations. No one was anticipating one set of regulations alone to achieve the targets.”

Vanessa Fajans-Turner, the executive director for Environmental Advocates NY, issued a statement calling the memo “a political tactic meant to scare legislators into giving her a way out of obeying the law.”

That may be so, but the memo also raises uncomfortable questions about New York’s climate strategy in a political environment dominated by affordability concerns.

Environmental Advocates NY argues that extending the law’s deadlines would “increase costs for households and the state,” citing the hazards of a warming world. The state’s earlier analysis also found that the financial benefits to New Yorkers would outweigh the costs. But in both examples, there is a lag between when the costs and benefits hit.

New Yorkers will experience Cap and Invest as a cost first. While the costs may not be as high as the memo envisions, it still literally puts a price on carbon. The pre-proposal also estimated that fuel costs would increase by as much as $9 to $15 per month in the first year for some families. Enacting a carbon tax just as energy prices are going up due to rising demand, the costs of caring for our increasingly fragile grid, and war with Iran could come off as tone deaf at best, political suicide at worst.

“It’s impossible to have a coherent debate about this if we’re not all first on the same page that a carbon price is designed to add costs to carbon-intensive energy uses, and that will add costs to consumers,” Noah Kaufman, a senior research scholar at Columbia University’s Center on Global Energy Policy, told me.

While Moran emphasized that the Cap and Invest program did not have to be the only tool the state uses to reach its emissions targets, the memo underscores how much the state’s toolbox has changed since the targets were enacted. Trump’s slashing clean energy tax cuts and enacting tariffs have increased the cost of clean energy. New York’s strategy also relied on clean car rules that would require all vehicle sales to be zero-emissions by 2035 — but Trump has stripped the state’s ability to enact such a policy. He also, of course, put an effective ban on new offshore wind development. New York was planning to have at least 9 gigawatts of offshore wind by 2035, but it got just 1.8 gigawatts into the pipeline before the moratorium came down.

The most recent data shows that as of 2023, New York had cut emissions by only about 14% relative to 1990 levels. “You look at where New York is on emissions or renewables or electric vehicle penetration, and it doesn’t look plausible at all,” Kaufman said. “It’s analogous to the 1.5-degree [Celsius temperature rise] target. People have a hard time letting go of it, even though when you map out the pathway that it would take to get from here to there, it looks entirely implausible.”

When I asked climate advocates about the emission targets, they didn’t deny that the numbers were unrealistic, but they also saw no need to update them. “There’s an understanding that the targets will be hard to meet,” Moran said. “But why change them if we haven’t even started to try?”

“I think any conversation about the targets and the law should focus on what the state can be doing right now and in the immediate future to implement the law and accelerate clean energy progress,” Courtin said.

At the same time, environmental groups are right that reliance on fossil fuels is a big part of why energy costs are increasing for New Yorkers. The state’s grid operator published a report in January that highlighted how the rising cost of natural gas was a leading factor driving up electricity bills. Some of Hochul’s recent decisions, including walking back a ban on gas hookups in new buildings and approving a new natural gas pipeline, will further entrench New York’s reliance on the fuel.

Advocates told me they were most angry that the Hochul administration was portraying climate action and clean energy as an impediment rather than a solution to the affordability crisis, which could do long-term damage to the case for decarbonization. Already, the New York Post editorial board has claimed victory, writing that Hochul is “finally admitting that the ‘climate’ law she’s long supported is toxic to New York’s economy and to ’affordability.’”

“The troubling thing is that they’re presenting this false narrative that these two things are at odds with each other,” Justin Balik, the state program director for the nonprofit Evergreen Action, told me. He pointed out that other governors — Mikie Sherrill in New Jersey, Abigail Spanberger in Virginia — have found winning political messages that champion both affordability and climate action.

“Let’s have a conversation about New York doing every single thing that is within the state’s control to both cut people’s costs and cut pollution at the same time,” Balik said. Evergreen recently commissioned a report outlining a range of clean energy-friendly strategies that could help New York reduce energy costs, like requiring data centers to build new clean power plants and lowering utilities’ rate of return. Those strategies would not get Hochul out of the deadline to impose a carbon tax, however.

There will never be a good time to price carbon; it could feel as politically painful, or more so, in 2030 as it did in 2024, 2025, and 2026. It will be up to the legislature to decide whether New York will take the leap now and recommit to the ambition it had during an earlier, more auspicious moment for decarbonization, or to wait. If there’s a third option, it hasn’t been articulated yet.