The New York State Department of Environmental Conservation and New York State Energy Research and Development Authority on Dec. 20 announced the release of two key documents and a series of stakeholder meetings in the ongoing development of New York’s Cap-and-Invest Program.
The Pre-Proposal Outline and Climate Affordability Study offer a framework for the program design and distribution of benefits “to help ensure the program achieves a declining cap on greenhouse gas emissions, limits energy costs to New Yorkers, invests proceeds in equitable programs that drive emission reductions, and helps maintains the competitiveness of New York businesses and industries,” a news release related to the announcement said.
A cap-and-invest program was recommended by the Climate Action Council’s Scoping Plan and proposed in Gov. Kathy Hochul’s 2023 State of the State Address.
The FY 2024 State Budget included a Consumer Climate Action Account and an Industrial Small Business Climate Action Account, which ensure one third of future proceeds will be provided directly to New Yorkers to help protect affordability and directed the completion of a Climate Affordability Study.
The budget also established a Climate Investment Account to direct two-thirds of future New York Cap-and-Invest Program proceeds to equitably support the transition to a less carbon-intensive economy, the news release noted.
The NYCI Pre-Proposal Outline includes a framework for the three core regulatory components of a Cap-and-Invest program -- the Mandatory Greenhouse Gas Reporting Program Rule, Cap-and-Invest Rule, and Auction Rule.
The document, available at https://capandinvest.ny.gov/, contains details regarding anticipated program design, such as the types of greenhouse gas emission sources subject to reporting or allowance requirements, the process for demonstrating compliance, the emission cap and allowance budget trajectories, provisions for emissions-intensive and trade-exposed industries, program stability measures and cost containment, and rules for auction and allowance market participation.
The Pre-Proposal Outline includes placeholders for various values, such as the price levels for various NYCI emission allowance price triggers or ceilings, while NYSERDA and DEC continue to collect feedback from stakeholders on the levels for each of these.
Preliminary results of the analysis, including potential consumer costs and projected benefits, will be made available to stakeholders in January.
The Climate Affordability Study was developed by NYSERDA and DEC, in collaboration with the State Departments of Taxation and Finance and Public Service and Division of Budget, to consider how best to deliver NYCI proceeds to New Yorkers.
The study, available at https://capandinvest.ny.gov/, evaluates options for benefit delivery as part of the Cap-and-Invest Program Consumer Climate Action Account and assesses various delivery mechanisms’ effectiveness in promoting broad and equitable distribution while minimizing administrative burdens.
DEC and NYSERDA are continuing the public process to develop New York Cap-and-Invest Program regulatory proposals prior to issuing a draft regulatory package and starting the formal regulatory process.
In addition, as part of program development, NYSERDA has initiated a procurement process to solicit platforms and services necessary for the functioning of the program.
This includes emissions reporting, a market registry platform, auction platform, and other related services, as well as market monitoring and financial services. Responses to this solicitation are due by Feb. 12, 2024.
Similar platforms and services are a critical part of other existing cap-and-invest programs, including the Regional Greenhouse Gas Initiative and programs in other jurisdictions.
To gather additional feedback on the program this summer, DEC and NYSERDA held seven industry-specific webinars and two roundtables focused on labor and equity and climate justice. Recordings of all the webinars and roundtables can be found on the Cap-and-Invest website.
A series of learning sessions are also available through the Georgetown Climate Center, Columbia’s Sabin Center for Climate Change Law, and Resources for the Future here.
DEC and NYSERDA are holding virtual stakeholder meetings in January that include:
Jan. 23 – The Role of Cap-and-Invest
Jan. 25 – Pre-Proposal Outline Overview
Jan. 26 – Preliminary Analysis Overview
To register to attend, visit https://capandinvest.ny.gov/Meetings-and-Events. Recordings of the webinars will be posted online following the events.
