New Yorkers have shown the path forward for clean energy policy.
The New York State Climate Leadership and Community Protection Act (CLCPA) represents one of the nation’s most significant efforts to address the climate crisis. Governor Cuomo and New York’s policymakers have shown the path forward for clean energy policy even in the face of federal inaction.
Considering that New York State’s economy accounts for one out of every 230 tons of energy-related carbon dioxide (CO2) emitted anywhere in the world, the CLCPA’s mandate to achieve carbon-free electricity by 2040, 70 percent renewable generation by 2030 and a net-zero carbon economy by 2050 will have a significant impact in the global climate crisis. The CLCPA further demonstrates New York’s legacy of leadership of advancing clean energy public policy and there are many tools the state can use to eliminate greenhouse gas (GHG) emissions from its electricity sector. One such tool – establishing a social cost of carbon – is embedded in the CLCPA itself. If the social cost of carbon is incorporated into New York’s electricity markets, progress toward the 2040 emission-free electric generation sector goal will be made in the most efficient and affordable manner.
Within the electricity sector, the challenges of eliminating GHG emissions by 2040 are significant, and even more so without the inclusion of a carbon price in the state’s electricity markets. Fortunately, the New York Independent System Operator (NYISO), the administrator of the state’s wholesale electricity markets, has developed a proposal for a carbon pricing plan that will charge those who produce carbon-intensive electricity and reward those who produce carbon-free electricity. As a home-grown policy, the state can immediately use to help achieve the lofty goals of the CLCPA and set New York on a path to a 100 percent emissions-free electric system. NYISO’s carbon proposal is a workhorse that efficiently aligns our climate energy goals with a market-based, technology-neutral model for decarbonization.
Shared Principles for a Carbon Price in The NYISO Market:
New York has an opportunity to be the nation’s clean energy leader by decarbonizing our electricity sector with a market-based model that preserves states’ abilities to choose and achieve their own clean energy policy goals. The NYISO carbon plan would:
- Position New York to effectively meet long-term climate goals identified in the CLCPA by leveraging competitive markets to:
- Accelerate decarbonization in New York’s generation fleet;
- Accelerate entry of new renewable projects, particularly in areas currently served by fossil units, including in vulnerable communities downstate;
- Create stronger economic incentives for cost-effective transmission investment, providing downstate market access to cleaner and more efficient resources located upstate and growing the potential market for renewables upstate;
- Create incentives for energy efficiency;
- Reduce the cost and time to achieve the state’s goal of 100 percent carbon-free emissions;
- Improve public health, especially downstate, by moving away from the most dangerous carbon-emitting generators;
- Promote innovation and clean energy businesses in New York by incentivizing carbon-free energy production;
- Avoid near-term risks associated with future FERC actions to undermine New York’s renewable and zero-emission resources - jeopardizing the state’s clean-energy goals and resulting in significant consumer cost increases.
- Benefit consumers financially. Resources for the Future (RFF), a renowned independent nonprofit organization that conducts research into environmental, energy, and natural resource economics, found that a carbon pricing initiative could reduce sector emissions by up to 22 percent and would result in economic and climate benefits of up to $691 million annually by 2025.
In short, the NYISO carbon proposal will help deliver New York’s clean energy transformation by ensuring the immediate and wide-ranging benefits.
Clean Energy in New York State: The Role and Economic Impacts of a Carbon Price in NYISO’s Wholesale Electricity Markets
Summary For Policy Makers
- Carbon Pricing Can Help NYS Meet Clean Energy Goals