New York’s “cap and invest” program (NYCI), a central part of the state’s efforts to reduce greenhouse gas emissions, appears designed to hold back much of the program’s sticker-shock until January 2027—after the 2026 election.

About two-thirds of emissions would be subject to NYCI (pronounced “nicky”), meaning the companies responsible would need to purchase allowances from the state. Allowances would be required for most fuel purchases (federal law exempts aviation fuel), and officials are still deciding among other things whether the rules would apply to electric generators, who already pay into a separate system.


The Department of Environmental Conservation (DEC) would determine how many allowances each company needs, establish a limit on the number of allowances sold in a year and place a ceiling on the price of those allowances. As the state approaches its 2030 emissions reduction goal (about 34 percent below 2021 levels), the number of allowances would shrink and the ceiling would rise.

Last week officials from NYSERDA, the state energy agency, presented a preliminary analysis showing how the program could look when it’s launched next year. While they emphasized the price levels were hypothetical, all three scenarios (see below) called for the price ceiling to more than double at the beginning of 2027. By comparison, price ceilings increase 5 to 6 percent in each of the other years.

Put another way:

Under the “modeling exercise,” NYCI would add at least 13 to 21 cents to the cost of a gallon of gasoline in 2026—and 22 to 48 cents in 2027. The total cost in 2025 (in the hypothetical scenarios, in 2022 dollars) would range from $3.1 billion to $5 billion, rising to $5.6 billion to $11.9 billion in 2030. At least 30 percent of NYCI proceeds would be rebated back to at least some New Yorkers (possibly as a refundable tax credit). NYSERDA has indicated a significant portion of households will break even or come out ahead.

These are preliminary numbers, but the fact that the 2026-2027 jump was the basis for all three scenarios is a strong indicator this will be a feature of the program when it’s rolled out later this year.

This wouldn’t be the first time New York climate policy was molded with Election Day in mind.

As the Climate Act was being finalized in June 2019, a costly provision—requiring the state to get 38 percent of its electricity from renewables by 2022—was dropped. To put that in perspective, New York only reached 30 percent renewables in 2022 (a target previously set for 2015), and forcing utilities to pay subsidies equivalent to 8 percent of load would have pushed electricity rates considerably higher in 2022 when Governor Andrew Cuomo expected to be seeking a fourth term.

Meanwhile, the announcement of detailed regulations (such as bans on gas stoves and oil furnaces) was moved from June 2022 in the original version to December 2022 in the final text, putting it weeks after the 2022 gubernatorial election.

It’s difficult to square the apocalyptic rhetoric from state officials about the threat posed by climate change with New York again moving climate-policy timelines to mitigate electoral blowback. As a political move, however, given that the state is deliberately aiming to make things cost too much for people to keep using them, doing it after an election makes perfect sense.

You may also like

State Offers Taxpayer-Funded Health Coverage to Unionized Home Care Workers

In a new subsidy for the health-care union 1199 SEIU, the Hochul administration is allowing the union's benefit fund for home care aides to shift some members into taxpayer-funded health coverage through the Essential Plan. Read More

A Closer Look at $4 Billion in State Capital Grants to Health Providers

The state has awarded $4.3 billion in health-care capital grants over the past decade, with a disproportionate share flowing to upstate providers, Health Department records show. Th Read More

NY’s net taxpayer migration loss dropped a bit in 2021-22, latest IRS data show

The outflow of New York taxpayers to the rest of the country subsided from the previous year's record high during the second tax-filing period following the March 2020 COVID-19 outbreak, according to the latest (IRS). Read More

Hochul’s Pandemic Study Is a $4.3 Million Flop

The newly released study of New York's coronavirus pandemic response falls far short of what Governor Hochul promised – and the state urgently needs – in the aftermath of its worst natural disaster in modern history. Read More

NY’s biggest public pension fund gained nearly 12% in FY 2024

Rebounding from its biggest loss since the Global Financial Crisis, New York's Common Retirement Fund realized a strong investment gain of 11.55 percent in fiscal year 2024, state Comptroller Thomas DiNapoli announced. The Fund, which now stands just below $268 billion, supports pensions paid to members of the New York State and Local Retirement System (NYSLRS). Read More

82 Questions Hochul’s Pandemic Report Should Answer

This is the month when New Yorkers are due to finally receive an official report on the state's response to the Covid-19 pandemic, one of the deadliest disasters in state history. T Read More

The Real Lack of Courage Driving NYC Congestion Pricing

Governor Hochul is taking heat after postponing the state’s years-old plan to charge drivers to enter lower Manhattan. As critics slam her for lacking “political courage,” it’s an appropriate time to examine some of the underlying issues that congestion pricing was meant to indirectly mitigate—because many if not most advocates were afraid to touch those issues themselves. And if congestion pricing proponents are to be taken at their word about their concern for MTA finances, or traffic, or air quality, they must show some of the same courage they’ve accused the governor of lacking. Read More

To Encourage Recycling, Pols Move To Trash The Legislature

New York state lawmakers in recent years have surrendered some of their policymaking and taxing powers to the executive branch. With the 2024 legislative session coming to close, they’re poised to go even further and turn those powers over to an organization outside of government entirely. Read More