The success of a city law aimed at slashing planet-warming emissions from buildings could depend on executing a state law to green the power grid, according to a new report.
The study, released by NYU’s Guarini Center, found that if the grid de-carbonizes by 2040 — on pace with requirements of the state’s Climate Leadership and Community Protection Act — most office building owners and some apartment managers wouldn’t have to do much to comply with Local Law 97’s emission limits.
“The requirements should not be very onerous for most buildings, at least for the commercial sector,” said Danielle Spiegel-Feld, executive director of the Guarini Center and a lead author on the report, commissioned by the Mayor’s Office of Climate and Sustainability.
The state’s Climate Leadership and Community Protection Act mandates electricity generated from zero-emissions sources by 2040, with the interim goal of 70% of power produced from renewables by 2030. A greener grid means an overall reduction in emissions.
Local Law 97 imposes greenhouse gas emissions caps on buildings, most over 25,000 square feet. Building owners must comply with the caps by 2024 and meet even stricter limits in 2030 — or face fines.
The aim is to chop building emissions 40% by 2030 and 80% by 2050. Buildings are the largest source of greenhouse gas emissions in New York City.
The city law, passed in 2019, called for studying the feasibility of a citywide carbon trading program, which would essentially allow buildings with low carbon emissions to sell credits to ones that exceed limits.
But the report looked beyond such a mechanism to the effects of the law without a trading program.
“The study does not substantiate the concerns about the costs of meeting LL97’s emissions caps that some in the real estate industry have expressed,” the report states.
The de Blasio administration will review the study, said Lauren Bale, a City Hall spokesperson.
The longer it takes to decarbonize the grid, the more costly it will be for building owners to comply with the emissions caps, the report found.
Some 91% of the buildings covered under the city law will fall under the emission caps set for the years spanning 2024 and 2029. That means those building owners won’t have to do anything to get reduce emissions — if the electricity grid de-carbonizes in line with the state-mandated timeline and the buildings maintain energy use at 2018 levels.
As the caps become more stringent between 2030 and 2034, more than half of the square footage will still comply.
But the report highlighted varying impacts for residential and commercial buildings.
Emissions from commercial buildings will reduce at a quicker clip than in residential buildings — meaning that owners of residential buildings will likely have to shell out more than commercial building owners to meet the emissions caps.
That’s because electricity is a larger share of energy used in offices and other commercial buildings. Most apartment complexes use on-site combustion of fossil fuels for heating and hot water.
By 2040, the report found, just 7% of commercial square footage would be over the emissions caps without taking any action if the grid is greened, compared to 73% of residential square footage.
The report found that a local carbon trading program would help building owners comply with the emissions caps under the city law and spur local investments. Under such a program, buildings that keep their emissions under the cap can sell credits to owners that are emitting beyond the limits.
The goal of a trading program, which would require city legislation, would be to generate revenue to invest in “environmental justice communities” — areas that shoulder disproportionate pollution burdens.
But that may be a hard sell in practice: Advocates for environmental justice communities have long criticized cap-and-trade programs. They say such market-trading programs don’t always reduce emissions — and may actually increase them in already polluted communities.
Such concerns torpedoed President Joe Biden’s selection of Mary Nichols to head the federal Environmental Protection Agency. Nichols was formerly the chair of the California Air Resources Board, the body that oversees the statewide cap-and-trade program.
Adams Approach Eyed
The implementation of Local Law 97 may well determine de Blasio’s legacy when it comes to climate. But the ongoing enforcement, via the Department of Buildings, will soon fall into the hands of the administration of Mayor-Elect Eric Adams.
More than a dozen incoming members of City Council last week wrote to Adams to underscore the importance of Local Law 97, calling it “the best and most important local climate and jobs legislation in the nation.”
Adams agrees with the goals of Local Law 97, but has concerns about the fines buildings could face if they’re not in compliance with the law, said his campaign spokesperson, Evan Thies.
The mayor-elect has pushed for investments in clean energy that will power buildings and for financial assistance from the city to help owners complete retrofits, Thies noted.
The real estate industry, which largely supported Adams’ mayoral campaign, has expressed concerns about the costs of complying with Local Law 97, especially given that the current grid is primarily powered by fossil fuels.
James Whelan, president of the Real Estate Board of New York, said in a statement that he looked forward to “working with the incoming city administration to explore the potential for a smart carbon trading scheme and make meaningful progress on reducing carbon emissions in New York City.”