Battle Looms Among New York Democrats Over High Cost of Green Energy Plans

While the public overwhelmingly supports taking action against climate change, people’s willingness to pay for that action is very limited.

AP/Hans Pennink
Governor Hochul at the state Capitol, January 10, 2023. AP/Hans Pennink

The stage is set for a battle royale within the New York Democratic Party over climate policy. Governor Hochul has suddenly realized that the cost of the state’s planned emission reduction scheme will be “extraordinary,” and is challenging her own party to make the climate law less damaging to New Yorkers’ pocketbooks. Will the left wing of her party go along?

In this year’s budget negotiations Ms. Hochul and the legislature agreed to a cap-and-invest program as recommended by the state’s Climate Action Council. Cap-and-invest programs put an annual limit on the amount of greenhouse gas emissions New York businesses collectively emit, with the amount declining each year. Businesses will have to bid for an ever-decreasing number of permits and naturally will pass the costs on to consumers by raising prices.

But a wrinkle in the Climate Act will make those costs more than half as much as they would be under Hochul’s proposed change.

Most countries and states compare emissions of different greenhouse gases using a 100-year time frame. New York’s Climate Law is unusual in that it uses a 20-year time frame. The issue is complex, but New York’s choice has two effects: it would reduce greenhouse gases faster, but at a much higher cost.

The governor has recognized this and wants to change to the more commonly used 100-year time frame, which would reduce greenhouse gases more slowly, but would have less sticker shock for average New Yorkers.

Under the Climate Act’s 20-year time frame, cap-and-invest would add 63 cents to the cost of a gallon of gasoline. Ms. Hochul’s proposal would reduce that to a still hefty but more bearable 39 cents per gallon.

For users of natural gas, the current approach would add $595 to the average family’s average annual bill. Changing it would reduce that to a $330 cost increase.

And for users of heating oil, the annual hit under the current law would be $605, while Ms. Hochul’s requested change would drop that to $410 per year.

Either way, the price increases are going to be considerable, but if Ms. Hochul gets her way, many New Yorkers would be spared hundreds of dollars per year in Climate Act costs.

This could be important politically, because while the public overwhelmingly supports taking action against climate change, people’s willingness to pay for that action is very limited. 

A recent Siena College poll conducted for the industry group New Yorkers for Affordable Energy found that three-quarters of New Yorkers were unwilling to pay $480 per year to combat climate change, and more than half balked at paying just $240.

Granted, the cap-and-invest program is intended to use the proceeds from sales of emissions allowances to give rebates to poorer New Yorkers to offset their costs. Yet those folks will still have to scrounge up the cash to pay upfront costs. And middle-income New Yorkers will suffer the blow without any rebates at all.

This poses an urgent political problem for Ms. Hochul, whose gubernatorial win last year was by the slimmest margin in more than a generation. People vote their pocketbooks, and fair or not they tend to blame the chief executive when their wallets get emptied.

Yet that doesn’t mean the Democrats in the legislature will go along with the governor. While gubernatorial candidates must appeal to middle-of-the-road voters, many legislators represent lopsided districts where the political voice is dominated by activists.

And climate activists are outraged at the governor’s proposal to change the Climate Act’s greenhouse gas accounting method. Their sentiments are summed up in the words of a Cornell Professor and Climate Action Council member, Robert Howarth, who said the governor’s proposal would be “disastrous for the NY climate law.”

Even some Democratic legislators who might personally agree with the governor about reducing the financial blow to New Yorkers may balk at changing the Climate Act out of fear of their most vocal constituents’ response.

So Ms. Hochul and legislative Democrats have an intra-party battle on their hands because they don’t share the same set of voters.

Ms. Hochul tried to get this change made during budget negotiations but was shot down. How hard she’ll push during the rest of the legislative session is anyone’s guess.

In the short run the activists may get their way again. But how long they can dominate a public that’s increasingly financially pressured remains to be seen.

James Hanley is a fellow at the Empire Center.

The New York Sun

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