New York Cap-and-Invest

New York State is undertaking one of the most ambitious efforts in the U.S. to address climate change by reducing climate-altering emissions from every sector of the economy and investing in an equitable, clean energy future for all New Yorkers. 

An economywide Cap-and-Invest Program will establish a declining cap on greenhouse gas emissions, limit potential costs to New Yorkers, invest proceeds in programs that drive emission reductions in an equitable manner, and maintain the competitiveness of New York businesses and industries. Cap-and-Invest will ensure the state meets the greenhouse gas emission reduction requirements set forth in the Climate Leadership and Community Protection Act (Climate Act).

Core Principles of Cap-and-Invest Program

Governor Hochul laid out five core principles for the Cap-and-Invest Program:

Affordability – Governor Hochul's Consumer Climate Action Account will deliver at least 30 percent in future Cap-and-Invest proceeds to New Yorkers every year to mitigate consumer costs.

Climate leadership – The program will be designed with the capacity to link with other current or future programs to further catalyze a nationwide movement towards carbon pricing, which can lower the price of the transition overall.

Creating jobs and preserving competitiveness – The program will launch new investment in industries that will create tens of thousands of good paying, family sustaining jobs of the future that can lift up entire communities.

Investing in disadvantaged communities – Cap-and-Invest will prioritize the frontline disadvantaged communities in our state that for far too long have suffered from pollution and environmental injustice.

Funding a sustainable future – the Climate Investment Account established in the FY24 Budget will direct two-thirds of future Cap-and-Invest proceeds to support the transition to a less carbon-intensive economy.

Climate Affordability Study

The Climate Affordability Study [PDF] was developed by NYSERDA and DEC, in collaboration with the Division of the Budget and the State Departments of Taxation and Finance and Public Service, to consider how best to deliver New York Cap-and-Invest proceeds to New Yorkers.

Supplemental Materials: Climate Affordability Study Supplemental Workbook[xlsx]

How Cap-and-Invest Works 

DEC and NYSERDA are designing a program that sets an annual cap on the amount of greenhouse gas pollution that is permitted to be emitted in New York. The declining cap ensures annual emissions are reduced, setting the state on a trajectory to meet our greenhouse gas emission reduction requirements of 40% by 2030, and at least 85% from 1990 levels by 2050, as mandated by the Climate Act.

It’s anticipated that large-scale greenhouse gas emissions sources and distributors of heating and transportation fuels will be required to purchase or obtain allowances for the emissions associated with their activities. By applying a price to the amount of pollution, the Cap-and-Invest Program incentivizes consumers, businesses, and other entities to transition to lower-carbon alternatives. 

Proceeds from the Cap-and-Invest auctions will be invested to bolster carbon reductions and help ensure the Program is affordable for all New Yorkers and delivers benefits to disadvantaged communities. Proceeds will support critical investments in climate mitigation, energy efficiency, clean transportation, and other projects, in addition to funding an annual Consumer Climate Action Account that will be distributed to New Yorkers to mitigate any potential consumer costs associated with the Program.

Process

This process will solicit crucial feedback from individuals and stakeholder groups to build out an equitable program that balances interests while ensuring the State meets its greenhouse gas emission reduction objectives. New York’s Cap-and-Invest Program will draw from the experience of similar and successful programs across the country and the world that have yielded sizeable emissions reductions while catalyzing the clean energy economy.

In the First Stage of Pre-Proposal Outreach DEC, and NYSERDA hosted a series of webinars (opens in new window) in June 2023. DEC and NYSERDA have now entered into the Second Stage of Pre-Proposal Outreach and will continue to host workshops to gather feedback on the program as we develop regulations to implement the Cap-and-Invest Program. See the Events page for more information on upcoming webinars and recordings of past webinars.

• Compilation of all questions from the First Stage of Pre-Proposal Outreach [PDF]
• Outline for the Second Stage of Pre-Proposal Outreach on which DEC and NYSERDA are seeking feedback [PDF]

Have your voice be heard

DEC and NYSERDA welcome input throughout the development of the program. Feedback during this early phase is vital to developing a successful program. DEC and NYSERDA are seeking feedback on the three regulations being developed for the Cap-and-Invest Program: Cap-and-Invest Rule, Mandatory Reporting Rule, and the Auction Rule, as well as the methods for the analysis underpinning the program. DEC and NYSERDA have developed a template document to assist commenters in providing feedback on these topics [PDF]. Feedback is welcome at any time.

Submit Rule Comments (opens in new window)

DEC and NYSERDA welcome public input to help refine the proposed investment framework. Feedback on the uses of NYCI Climate Investment Account proceeds will be vital to developing a portfolio of investments that will reduce emissions, aid the State’s ongoing just transition to a clean energy economy, and deliver benefits to Disadvantaged Communities. DEC and NYSERDA have developed a template document to assist commenters in providing feedback on these investment topics [PDF]. Feedback is welcome at any time, but is encouraged by September 30, 2024. Input received during prior outreach on NYCI will also be considered.

Submit Investment Comments (opens in new window)

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