Hochul's climate law fumble roils budget talks

ALBANY, N.Y. — Gov. Kathy Hochul’s botched attempt to rewrite the state’s landmark climate law during secretive budget negotiations outraged her sometimes allies in the environmental movement — and handed the cudgel of higher gas prices to opponents of New York’s efforts to slash emissions.

Hochul inserted a proposal in budget talks that would have weakened the actions needed to achieve the state’s emissions reduction limits enshrined in law. Her effort, first reported by POLITICO, received immediate blowback from environmental groups and Democratic lawmakers who have made tackling the climate crisis a top priority.

At first, the governor deployed her top energy and environmental officials to defend the urgency of the proposed change. It was needed to avoid having implementation of the climate law prove too costly for consumers, they said.

But that effort lasted less than three days before they met with the governor and then were sent to face reporters and announce that the change was no longer a top priority in budget negotiations.

“New Yorkers experienced budgetary whiplash,” said New York Public Interest Research Group’s legislative director Blair Horner.

A rebate for consumers remains a priority for the Hochul administration in budget talks, and they’re not backing down from pushing the controversial change later this year.

“Governor Hochul and her administration remain fully committed to addressing cost implications outside of the budget and combatting climate change, and the Governor continues to work with the legislature on a budget that includes the most impactful climate initiatives in recent history,” Hochul spokesperson Katy Zielinski said in a statement.

The state’s Climate Leadership and Community Protection Act mandates reductions in greenhouse gas emissions of 40 percent from 1990 levels by 2030 and 85 percent by 2050, with the remainder offset.

New York is unique in using three factors that increase the emissions that have to be reduced: a 20-year metric for the impact of planet-warming gasses, out-of-state upstream emissions from imported fuels and “biogenic” emissions from burning fuels like wood and ethanol.

If New York were to use the accounting most other states do, its statutory targets would fall behind at least Washington, Massachusetts and Maryland.

The progress toward the goal as of 2020 under the two scenarios indicates New York would be able to keep burning more fossil fuels for longer. Under the state’s current accounting, for example, New York has achieved about 37 percent of the progress needed to meet the 2030 goal, according to an analysis of state data by POLITICO.

If the state were to switch over to the accounting method being pushed by Hochul’s administration, the picture is much rosier: the state has already gotten three-quarters of the way to the 2030 goal.

It’s hardly unusual for a governor to privately insert a new ask into budget talks after they’ve already staked out a public position in the official executive budget proposal. Hochul, for example, successfully secured millions for a new Buffalo Bills stadium as part of negotiations last year.

Former Gov. Andrew Cuomo regularly exercised the outsized power an executive has in the state’s budget process, including by strengthening his control over an obscure public financing body that lawmakers used to derail a deal to bring an Amazon headquarters to New York City.

But the Hochul administration’s failure to execute and the public about-face on rewriting the climate law heralded as “nation leading” has taken some observers aback. It’s another example, following the defeat of her first nominee to lead the state’s highest court, of growing pains for the governor who won by a relatively narrow margin last November.

“The affordability issue is a legitimate issue for us to discuss, and we need to address it because it's a real thing. I don’t know that it was a wise move to try to inject it without any pre-sale into the budget negotiations,” said Sen. Pete Harckham (D-Westchester County), who chairs the Environmental Conservation Committee and opposed Hochul’s proposal.

“It was kind of ill-timed the way it was done.”

The proposal garnered praise from business groups, Republican lawmakers and support from the biofuels industry and gas companies. Labor also supported the accounting change pushed by Hochul, although the New York State AFL-CIO hasn’t taken a position on a separate but related legislative measure.

The saga led the Wall Street Journal’s editorial board — never the biggest fan of aggressive action to address climate change — to declare Hochul “the weakest New York governor in decades.”

Backers of much of Hochul’s climate agenda, who have been pressing for faster action, were disheartened by the governor’s proposal – even though it appears temporarily shelved.

“It’s a real 180 degree change from where the administration was just a month ago,” said Liz Moran, the New York policy advocate for Earthjustice. “To now say, ‘Oh, it’s too costly,’ is deeply concerning. It’s echoing the talking points of the fossil fuel industry.”

Environmental advocates and their legislative allies urged the governor to consider other policies to limit costs of the state’s climate plan for low-income New Yorkers, including by capping energy costs as a percent of income and eliminating support for expanding the gas system. They’ve also pushed a measure that would raise $75 billion from fossil fuel companies for historic global emissions.

All of it comes as lawmakers and Hochul try to negotiate a state budget that missed the April 1 start of the fiscal year.

Moran said picking between affordability and acting on climate was a false choice. The state’s own analysis shows a net benefit for New York’s aggressive action on reducing emissions under the current law rather than Hochul’s proposed change.

That includes health benefits and global benefits of reduced greenhouse gas emissions, which may ultimately do little to stem the effects of a warming planet, more intense storms and rising seas in New York.

It may be too soon to tell whether Hochul’s actions will be viewed as a misstep or not, said Larry Levy, executive dean of the National Center for Suburban Studies at Hofstra University on Long Island — where Hochul lost last November to Rep. Lee Zeldin, the Republican candidate.

“Her supporters could say it’s a sign of flexibility in the face of a strong counterargument,” he said. “Her opponents might promote this as a sign of weakness, … which scenario depends on what else she gets back from the legislature in exchange for keeping her political powder dry on this particular issue.”

The Hochul administration has indicated they’ll continue pushing the proposed change later in the legislative session. The Department of Environmental Conservation expects to issue draft regulations to impose an economy-wide pricing mechanism on emissions through a cap-and-trade style system this summer.

Hochul wants legislative signoff to rebate roughly a third of the money raised to consumers to cushion the expected increase in fossil fuel costs. The figures cited by her administration in pushing to change New York’s law indicate gas prices would rise about 60 cents a gallon under the current system versus 39 cents if the changes proposed were adopted.

In the immediate aftermath of the latest fight, opponents of the state’s climate policies now have a convenient talking point to hammer as Hochul’s administration moves forward with regulations required by the end of the year to achieve the emissions reductions mandated in law.

“The Hochul administration, and some top legislative Democrats, finally acknowledge that, left as is, the CLCPA will cost everyday New Yorkers and their families far too much,” wrote Sen. Tom O’Mara (R-Chemung County) in a column. “They finally recognize that the current plan holds massive consequences, on so many levels, and that it’s time to pump the brakes on an out-of-control climate strategy.”