Environmental Law: NY taking aggressive climate policy action with legislation and regulations

In past columns we have reported on the Climate Leadership and Community Protection Act (CLCPA), which was adopted by Gov. Cuomo in 2020. The CLCPA requires that New York State limit greenhouse gas emissions (GHG) from all sectors (power generation, transportation, industrial/institutional facilities, etc.) to 60% of 1990 emissions by 2030 and 15% by 2050. The CLCPA requires the state to obtain 70% of its electric production from greenhouse gas free sources by 2030 and ultimately 100% by 2040. Currently, the state only gets about 28% of its electricity from renewable sources and a large portion of that amount from hydropower sources. Attempting to hit the CLCPA goal in the next nine years will take massive restructuring of the state’s power system and affect both residential and commercial customers dramatically.

Both the state and local governments are starting to take significant actions that will have immediate impacts on New York residents and property owners. Some are hard to calculate, but the CLCPA will transform all aspects of life in New York. Hence, it would be wise for all residents to monitor the pending legislation, regulations, and guidance as it develops.

The New York City Council recently approved legislation prohibiting the use of gas in new buildings in an attempt to reduce GHG and limit climate change. Under the new local law, gas use in most new buildings under seven stories will be illegal following 2024. Buildings over seven stories will ban use of gas starting in 2027. There are exemptions for certain buildings such as schools, public works structures, manufacturing, laboratory, hospitals, and commercial kitchens. At the state level, legislation has been proposed that would prohibit issuance of building permits for any commercial, residential, or mixed-use building after December 2023 unless that the building is an “all-electric building” (S.6843-A/A.8431).

In another significant development, NYS Department of Environmental Conservation (DEC) has issued draft guidance for agencies to comply with the CLCPA’s GHG limits when issuing permits, licenses and executing grants, loans, and contracts. The draft guidance, captioned “CP-49/Climate Change and DEC Action,” addresses the issues that New York agencies must consider in reviewing and issuing permits and approvals, as well as determining whether the agency decisions are inconsistent with or will interfere with the attainment of the CLCPA’s GHG limits. The scope of potential impacts is significant, under the CLCPA the emission limits to be considered “include all emissions of GHGs from sources with either (1) the generation of electricity imported into the State, or (2) the extraction and transmission of fossil fuels imported into the State.” The DEC is accepting public comments on the draft guidance through Feb. 7, 2022.

Under the draft version of the guidance, DEC must consider whether an agency decision may be inconsistent or interfere with the statewide GHG limits. The DEC is going to consider whether the decision “enables a new source of GHG emissions, increases a source’s permitted or potential GHG emissions, or allows a reasonably expected increase in actual GHG emissions above levels that existed prior to a permit application or a decision at issue.” If the agency action is inconsistent with the CLCPA limits, the agency must provide a detailed explanation of why the limits are not going to be met, identify alternatives or other mitigation at the project location. The guidance will dramatically affect the scope of climate considerations on state agency decisions, actions, and approvals.

As anticipated, environmental groups support the proposed air permit guidance. For example, the Sierra Club has noted that with this policy change, “DEC clarifies that they’ll be applying more scrutiny to their permit renewals if there’s any aspect of the power plant or factory that’s changed since the issuance of the original Title V air permit.” The CLCPA is already being used by DEC and environmental groups to deny power plant modification and expansion applications, so it appears that enhanced DEC guidance that forces compliance with CLCPA will present even greater challenges for the power sector and industry in the state. In October, DEC rejected a Title V air permit for Astoria Gas Turbine Power LLC for a replacement power project in Queens. Groups such as Earthjustice that opposed the project have touted the denial of the air permit for the project and DEC’s reliance on the project’s non-compliance with the CLCPA. According to Earthjustice’s attorney, “the NYS Department of Environmental Conservation correctly decided that New York’s Climate Leadership and Community Protection Act does not allow approval of new, polluting fossil fuel infrastructure as the state moves to a zero-emission electricity system by 2040.”

Conversely, the guidance and regulatory requirements for establishing compliance with CLCPA mandates present significant concerns for businesses seeking new or modified Title V air permits or other major permits. As a fundamental matter, the state needs strong and diverse energy and industrial sectors to thrive and prosper. The Business Council of NYS is closely monitoring the proposed guidance and will be submitting comments to DEC.

In addition, the expansive CLCPA analysis required by applicants is a significant commitment of time and resources as part of permit proceedings. The analysis will require consideration of a host of issues ranging from on-site greenhouse gas emitting operations, upstream emissions such as fuel development and transportation and alternative operations and technologies that might eliminate or reduce emissions.

While CLCPA mandates may be laudable in the long run, imposing draconian greenhouse gas considerations on each major air and other permit that is considered by DEC has the strong potential to harm energy production and industrial development. Based on comments from Earth Justice and Sierra Club, that may be the ultimate objective of the CLCPA. However, if DEC adopts and applies the guidance extensively, it will harm the economy and state residents. It may lead to further departure of business and residents to states with less restrictive regulatory requirements.

George S. Van Nest is Partner in Underberg & Kessler LLP’s Litigation Practice Group and chair of the firm’s Environmental Practice Group. He focuses his practice in the areas of environmental law, development, construction, and commercial litigation.