Local Law 97- Too Early to Tell
Local Law 97 (LL97) is aimed at helping NYC become carbon neutral by 2050. The goal is to reduce emissions produced by the City’s largest buildings, 40% by 2030 and 80% by 2050. Beginning in 2025 if building owners do not comply they will be subject to a civil penalty.
Starting in 2024 LL97 will place carbon caps on:
- Buildings that exceed 25,000 gross square feet
- Two or more buildings on the same tax lot that together exceed 50,000 gross square feet
- Two or more buildings held in the condominium form of ownership that are governed by the same board of managers and that together exceed 50,000 gross square feet
With such an impressive objective, there are concerns about the costs of coming into compliance, but agencies are doing their part to assist these buildings in curbing their carbon output at a reasonable price. NYSERDA offers rebate programs to help cover the cost of bringing a building into carbon neutral requirements. NYC also has a Property Assessed Clean Energy (PACE) financing program that specifically loans funds for energy efficiency and renewable energy projects. They have no or low upfront cost, low-interest rates, and longer terms, and are repaid through a building’s property tax bill.
A study was done in late 2021 on the feasibility of a carbon trading program, which would allow buildings with low carbon emissions to sell credits to ones that exceed their limits. A similar concept to what is done in the Renewable Energy Certificate (RECs) market where companies can purchase a certificate or credit, for 1 MWh worth of electricity, representing proof that the energy was generated from an eligible renewable energy resource. A carbon trading program is a novel approach in that nowhere else in the world has a trading program been implemented for such a wide range of buildings as this is trying to do. This type of program would provide more flexibility to customers, help facilitate the conversion to becoming greener, and could be used, in some cases, to generate income for companies that have the ability to offer this type of trading.
However, grid decarbonization goals may help to reduce the need for carbon trading programs. The Climate Leadership and Community Protection Act (CLCPA) states if the electricity grid is decarbonized by 2040, that alone could drive most of all citywide emissions reductions necessary to comply with LL97 at a city level. If this goal is achieved, it would help to alleviate some of the worry customers might have around the cost and compliance requirements of such an ambitious goal.
Yet, despite any barriers required for this undertaking, LL97 is not only a move that’s good for the environment, it ultimately helps reduce energy costs which is beneficial for everyone. These changes will make buildings more efficient by requiring the replacement of old and outdated equipment or refurbishment of what’s already there. The world is moving toward a more efficient, energy conscience future, these changes only help reduce emissions which is not only better for the planet but helps the customer by increasing the valuation of their assets.
(Source: Greenhouse Gas Emission Reporting – Buildings (nyc.gov)
(Source: NYC C-PACE Administration – NYCEEC)
(Source: 2021-11-15 Guarini – Carbon Trading For New York City’s Building Sector – DocumentCloud)