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 all New Yorkers have shown the path forward for clean energy policy even in the face of federal inaction and more recently a global pandemic.
The goals of the CLCPA must be met, and in fact are more important than ever as we begin the process of preparing for a post-COVID-19 economic recovery. The link between respiratory issues and COVID-19, which has attacked people with pre-existing health conditions the hardest, shows just how important reducing pollution and improving air quality are to protecting public health, especially in times of crisis. Our most vulnerable populations, such as seniors and low-income communities of color, are already disproportionately affected by climate-influenced health issues and face the most exposure to dirty air due to their proximity to fossil fuel plants.
On top of protecting public health and addressing the disastrous and irrevocable effects of climate change, we also need solutions to reboot New York’s economy in the aftermath of COVID-19. NYISO’s carbon pricing plan advances all of these objectives by providing New York an essential tool to restart the economy and build it back cleaner and stronger than ever. Pricing the social cost of carbon within New York’s electricity markets will align our environmental and public health interests – while simultaneously jump-starting the economy at a very timely moment.
In tandem with New York’s broad CLCPA implementation, NYISO’s carbon pricing proposal will support investments in green jobs and accelerate the build-out of renewable energy infrastructure, putting thousands back to work while safeguarding the health of our environment. Especially at a time when the state has limited resources to invest in large-scale renewable energy projects, carbon pricing offers a steady and consistent mechanism to incentivize carbon-free energy production and clean energy job creation and business growth. Leveraging the power of markets, NYISO’s carbon pricing proposal ensures the most efficient utilization of public resources to achieve the CLCPA goals.
As New York works to defeat this invisible enemy, we must also continue to lead the development of a carbon-free economy. New York accounts for one out of every 230 tons of energy-related carbon dioxide (CO2) emitted anywhere in the world. With 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, incorporating the social cost of carbon into New York’s energy markets is the most efficient and affordable approach to reaching these goals, protecting public health and rebuilding the state’s green economy. This is a moment for bold leadership.
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, NYISO 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. The state can immediately use its carbon pricing plan 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 build back better and cleaner and be the nation’s clean energy leader by decarbonizing our electricity sector with a market-based model that preserves our state’s ability to choose and achieve our 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 of New York’s generation fleet and its imported electricity;
- Improve public health, especially downstate, by moving away from the most dangerous carbon-emitting generators;
- 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 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.
- Create thousands of highly skilled jobs rebuilding New York’s green economy
- Promote innovation and clean energy businesses in New York by incentivizing carbon-free electricity 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 NYISO’s adder proposal 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 while also providing the state with an environmentally friendly tool to build back better.
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