Public Service Commissioner John Howard recently warned that the state’s climate-action scheme will cost New Yorkers “hundreds of billions of dollars” — which Albany politicians “totally obfuscated” to push the plan through and refused to fund through taxes.
For speaking this clear truth, he was branded an “alarmist” by Assembly Environmental Conservation Chair Steven Englebright. But Howard’s numbers come directly from a report commissioned by the Climate Action Council, which the Climate Leadership and Community Protection Act created and tasked with drafting a scoping plan to implement the 2019 law.
The consultants’ report puts the price of implementation, which requires huge cuts in greenhouse-gas emissions as the state seeks to transition from fossil fuels to renewables, at $280-$340 billion. It identified benefits of $420-$430 billion, so supposedly it’s a net gain.
But more than half that presumed benefit — $260 billion — is from global reductions in harm from climate change. That means those gains flow out of state and out of country, not to New Yorkers.
That leaves just about $170 billion in benefits to New Yorkers, at a cost nearly twice that much. The Climate Council keeps misrepresenting this to incorrectly suggest New Yorkers get a net benefit. Apparently it doesn’t understand what its own consultants say.
That’s bad even if you believe the consultants’ numbers. But in the real world, grandiose public projects frequently cost more than twice as much as predicted and produce as few as half the benefits. So New York could be looking at laying out more than $600 billion to get less than $100 billion in benefits.
And even if the Empire State gets lucky and this poorly designed law doesn’t turn out that badly, there are still hundreds of billions of dollars in costs that have to be paid one way or another. And from Gov. Kathy Hochul to the Legislature to the Climate Council, everyone’s ducking the question of how to pay for it.
During this year’s budget negotiations, CLCPA supporters demanded annual spending of $15 billion to implement the plan. Despite a record spending spree in Albany, they didn’t get it. About all they won was $500 million for port and manufacturing facilities for offshore wind power and $59 million in grants for the Clean Green Schools Initiative to improve schools’ energy efficiency. That’s a mere 3% of their request.
The Clean Air, Clean Water, and Green Jobs Bond Act, if enacted by voters in November, will provide at least $500 million for electric school buses. While that sounds like a lot, it’s at most 5% of the $10 billion-plus cost premium for those buses.
And when two members of the Climate Council formally requested an analysis of how the law’s various costs might be distributed among taxpayers, ratepayers and consumers, the council’s co-chairs, New York State Energy Research and Development Authority President Doreen Harris and Department of Environmental Conservation Commissioner Basil Seggos, flatly declined to consider the question.
Are you starting to see a pattern? Politicians who voted the CLCPA into law didn’t specify how it would be paid for. Neither will the leaders of the council created specifically to lay out a path toward achieving its metrics and timetables.
They’d all prefer to leave the hard questions to someone else.
That someone else, as Commissioner Howard noted, may be the Public Service Commission, which regulates power utilities. As it noted in a recent order, “investments required to implement the CLCPA are becoming a significant driver of utility rate increases.” The PSC won’t be able to avoid addressing this issue through rate cases, in which utilities try to recover those costs of meeting CLCPA requirements.
That is to say: Your electricity rates look set to skyrocket because that’s the default method of paying the costs no politician wants to touch. But as Commissioner John Maggiore said, the cost of the green-energy conversion is greater than the capacity to finance it through ratepayers’ electric bills.
So how do we pay for the rest of the hundreds of billions in costs? Three years after CLCPA was signed into law, we still don’t know — and our political leaders in Albany still can’t tell us.
James E. Hanley is a senior policy analyst at the Empire Center for Public Policy.
