New Yorkers should be on high alert in the wake of a new study issued last month concerning the ambitious climate law signed by then-Gov. Andrew Cuomo in July 2019 that mandates goals and timetables for the state’s transition from fossil fuels to renewable energy.
The study reveals the unrealistic assumptions entailed in the law, the extraordinary cost of trying to achieve them and the inability or unwillingness of the law’s authors or implementers to say how much of that cost will be paid by residential homeowners and businesses through higher monthly utility bills.
The study – a cost-benefit analysis of the Climate Leadership and Community Protection Act – was prepared internally for the Climate Action Council, and is intended to inform the council’s development of a “scoping plan” for implementation of the CLCPA, a draft of which is due by Dec. 31. The analysis, unsurprisingly, finds the benefits of the transition will exceed the costs, with the costs estimated at $280 billion to $340 billion and the benefits at $420 billion to $430 billion, for a net benefit of $80 billion to $150 billion.
New Yorkers should be skeptical. Mega projects that cost hundreds of billions of dollars and take decades to complete often run 50 percent over budget and produce as little as 50 percent of the projected benefits. If that is the case with the CLCPA, its value may be negative resulting in a net cost to New Yorkers of $200 billion to $300 billion. That is, the costs may far outweigh the benefits.
Additionally, the transition analysis claims that the CLCPA will prevent $260 billion in climate change-induced economic damages. The public report does not provide any detailed information on this crucial assumption. New York contributes only four-10ths of 1 percent of global greenhouse gas emissions. The report does not specify how this minuscule reduction in global emissions will affect climate change enough to produce such savings. Nor does it specify how much of these alleged savings will accrue to New Yorkers or how much will be to the benefit of neighboring states.
The transition analysis also highlights how arbitrary the CLCPA’s 2050 deadline is. Mega projects not only tend to cost more and produce less value than predicted, they reliably take longer than predicted. The CLCPA is likely to be no different, so the analysis makes heroic assumptions to make its analysis work by the deadline.
It assumes the retrofitting of 92 percent of building stock with more energy-efficient shells. With more than 1 million buildings in New York City alone, this will require retrofitting more than 31,000 buildings a year – 85 every day – for the next 29 years just in the city. This pace is improbable.
The analysis also ignores the indirect cost to building and homeowners of increased construction and renovation costs due to the increased demand for labor caused by this level of activity.
It also does not address who will pay for all this retrofitting. Will homeowners have to bear the cost on their own? Will taxpayers subsidize the projects? Or will power companies subsidize it with the cost ultimately covered by utility ratepayers?
Another heroic assumption is the construction of up to 19 gigawatts (19,000 megawatts) of offshore wind power by 2050. This is twice as much as the currently projected 9 gigawatts by 2030 and will require the construction of 655 megawatts annually. New York has 4,500 megawatts of projects approved but not built. Meeting this goal will require the completion of more than one offshore wind turbine weekly between 2024 and 2050. Siting and regulatory approvals for further wind projects, plus the delays caused by any legal battles, are likely to draw out the length of time needed to complete these projects and increase their costs.
Despite voluminous detail in some areas, the study entirely fails to address a question that the bill’s authors also skirted, but is of concern to anyone who pays a monthly utility bill: Who will pay for this accelerated energy transition?
New Yorkers already pay some of the highest energy prices in the nation. And it’s inescapable that a substantial portion of the hundreds of billions of dollars required to finance the green energy transition will be passed on to consumers.
Most Americans wouldn’t pay $10 or more in higher electricity bills in order to fight climate change, according to a recent national poll. But nobody is asking New Yorkers how much more they’re willing to pay. Indeed, they won’t know how much they’ll soar under the 2019 climate law until those higher bills arrive in the mail.
James E. Hanley is a senior policy analyst with Empire Center in Albany.
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