CDRLA NY Opposition Response Letter 1 /2

(CDRLA - A8597/S8171)

  1. “We expect to see these bills in Texas and Louisiana – home to a massive petrochemical build out – but not in New York. We can do better.”

Topline: Responsible and equitable carbon dioxide removal requires New York State leadership. Without New York and other climate forward states taking the lead, there is a risk of bad CDR policies that preserve the status quo taking precedence.Yes, New York can do better. And we must. It is a valid concern that states like Texas and Louisiana - and Republicans in Washington who openly serve at the interest of big oil, gas and coal - will propose carbon dioxide removal policies that are intended to delay decarbonization and/or further perpetuate and enrich the fossil fuel industry. We have already seen this take place with federal tax credits like 45Q which were clearly designed to perpetuate the status quo.

The CDRLA rejects this vision of CDR and is designed to prevent it ever becoming a reality by anchoring the policy in New York values and principles, starting with equity and environmental justice. New York leadership is essential to building a strong foundation for a just and equitable CDR that broadly benefits communities, and prevents regressive actors from maintaining the extraction industries preferred status quo. And that is what the CDRLA will do.

We must reduce emissions and decarbonize our economy as quickly and as completely as possible. Full stop. However there is clear scientific consensus that we MUST also remove carbon dioxide from the atmosphere. We CANNOT allow the extraction industries to use their significant resources and influence to capture and subvert this essential climate need in order to serve their own narrow interests and profit accumulation.

“[W]hat we need to do is integrate carbon removal as a part of our decarbonization and adaptation efforts.For if we have the newfound capacity to remove carbon from the atmosphere and put it elsewhere, do we not have the responsibility?”

Professor Holly Jean Buck, University of Buffalo, author of Ending Fossil Fuels: Why Net Zero is not Enough.

  1. We oppose providing state subsidies to false climate solutions (e.g., plastic production, “utilization” of CO2 to make new products; most forms of bio-energy) under the guise of “removing” carbon from the atmosphere.

Topline: Carbon Dioxide Removal is a necessary solution, not a “false” one, that is supported by a broad scientific consensus. We can no longer maintain a livable climate without also taking excess CO2 out of the air. The CDRLA has no relation to production of single-use plastics or any other non-durable CO2 utilization.

Carbon dioxide removal (CDR) is a necessary part of a science-based response to the global climate emergency. Labeling it a ‘false solution’ and confusing it with other unrelated pathways will contribute to dangerous delays to CDR’s development that New Yorkers and the world cannot afford. The bill has zero relation to plastic production.

Emissions reductions must be prioritized – as we are doing to a great extent already in New York - but there is a broad scientific consensus that CDR will be necessary to prevent catastrophic climate change. According to the U.N. Intergovernmental Panel on Climate Change (IPCC):

“All pathways that limit global warming to 1.5°C with limited or no overshoot project the use of carbon dioxide removal (CDR) on the order of 100–1000 GtCO2 over the 21st century.”

“Unless affordable and environmentally and socially acceptable CDR becomes feasible and available at scale well before 2050, 1.5°C-consistent pathways will be difficult to realize….”

Scale up of CDR must occur in addition to the immediate and full decarbonization of the global economy, and investments in adaptation to changes that are already inevitable and underway.

  1. … Especially when such approaches will likely enable continued use of fossil fuels and its associated pollution, often in environmental justice communities.

Topline: The CDRLA explicitly excludes any CDR project or pathway that serves to perpetuate fossil fuel use or, or allow polluters to continue to pollute.

Carbon dioxide removal must not and does not entail the continued use of fossil fuels. That’s why the Carbon Dioxide Removal Leadership Act explicitly

  • Prohibits any CDR applications that are used to extract fossil fuels, such as, but not limited to, enhanced oil recovery (EOR);

  • Selects projects based on full energy and emissions life cycle performance, therefore selecting for the most efficient, clean energy supplied solutions that deliver negative emissions; and

  • Establishes a program funding source that is not tied to credits or offsets that permit polluters to continue to pollute.

  1. Renewable energy combined with investments in energy efficiency, conservation, battery storage, mass transit, and electric vehicle rebates need to be the focus of our efforts to address the climate crisis right now, as does reducing the amount of greenhouse gasses that industries are allowed to release.

Topline: We completely agree – and New York climate policy is correctly very much focused on emissions reductions. But there is clear scientific consensus that we also need to start scaling durable carbon removal now. The CDRLA is rooted in a commitment to the full and rapid decarbonization of our economy, consistent with the objectives of the Climate Leadership and Community Protection Act. There is no effective CDR without decarbonization.

The CDRLA is completely aligned with the above objectives. The legislation does not propose a reduction in investments in any of the decarbonization pathways that the State of New York is already required to implement pursuant of the Climate Leadership and Community Protection Act. As a means to securing a livable climate, CDR makes no sense unless total decarbonization of the economy is also achieved, first and foremost.

  1. These proven, cost-effective measures need to be prioritized – especially since the U.S. has made minimal progress in reducing GHG emissions to date. There is not enough current funding to promote these approaches. Money should not be spent promoting false solutions, such as the technologies supported in your bill.

Topline: Decarbonization must be, and is, the number one priority. The CDRLA proposes a modest financial commitment to CDR to catalyze development and cost reduction today with funds that are a tiny fraction (< 0.1%) of funding requirements needed for decarbonization.

We agree that decarbonization measures must be prioritized in terms of both level of public investment and the timetable for immediate action. This is why the maximum fiscal commitment called for in the CDRLA is just .06% of the total investment required to fully fund the CLCPA. The New York legislature is currently working on a number of bills focused on emissions reductions. The CDRLA is the only state policy that addresses the critical need for carbon removal.

Further, it is important to stress that the reason why renewable energy and storage solutions are “proven and cost-effective” today is because earlier state and national policies provided critical early demand support for these solutions, leading to a level of deployment and cost reduction that have made them viable today. The CDRLA is focused on this early commercial stage, and aims to both prove and make economical high impact CDR solutions so that they can scale in future decades, after decarbonization has been achieved. But as solar, wind, battery storage and electrical vehicles have shown, we have to start now because getting new technologies to a point of scalability requires a lot of time and cannot be done overnight. We have to start now!

  1. The CDRLA is very expensive. It would establish tax subsidies of up to $350 a ton to remove carbon. This is far in excess of the current price of $13 a ton that electric producers pay under the auctions of the Regional Greenhouse Gas Initiative (RGGI). The CDRLA asks for a $35 million allocation by 2025.

Topline: The revised version of the CDRLA calls for a financial commitment that is an order of magnitude lower than the initial draft. It is authorized for 5 years. $350/t corresponds to the forecast cost of durable CDR, not prices in current carbon markets such as RGGI that transact low-quality “offsets” that are not carbon removals, and as such do not represent a relevant comparable. The CDRLA does not offer tax subsidies, but rather would be funded by eliminating existing tax credits for commercial aviation fuel.

The CDRLA does not propose tax subsidies. It proposes a CDR procurement program whereby the state will purchase durable carbon dioxide removal services starting in 2025 through a competitive reverse auction model that selects for low cost. $350/ton is the maximum amount that the state will pay for such services in year 1 of the program, and this ‘cap’ will decline by 5% each year during the 5-year authorized program.

From a policy perspective it is not justifiable to compare the proposed $350/ton cap in the CDRLA to the current or future $/ton price of RGGI or other carbon trading schemes, because these programs serve different purposes. The CDRLA, not unlike earlier successful rebates for solar offered in New York State, is designed to create market support for new CDR solutions in order to accelerate their cost reduction through scale up and learning.

  1. This bill would have NYS incentivize the building of carbon removal technology including direct air carbon capture (DAC) – the most costly and complex way to reduce carbon in the atmosphere.

Topline: The CDRLA does not incentivize any specific CDR pathway, but is rather standards-based and pathway agnostic. DAC is one of a number of CDR pathways that could qualify for procurement under the CDRLA – including biochar and other solutions that employ waste biomass; mineralization and enhanced rock weathering; and a number of emergent ocean-based solutions.

This bill does not incentivize Direct Air Capture (DAC) specifically. Rather it will select for a range of potential CDR solutions that are most climate effective, most socially and ecologically acceptable, and most effective at removing carbon dioxide from the atmosphere.

CDR solutions that are most actionable in New York and economically competitive in the near term include multiple applications that leverage and add value to New York State’s diverse agricultural sector. These include biochar, enhanced rock weathering, and anaerobic digestion-based carbon removal. These solutions enjoy enormous scale potential within our state, come with significant co-benefits for farming communities, and are among the least complex and most economic forms of climate mitigation available.

Given that the average current cost of carbon removal from DAC is well above the $350/ton cap established in the CDRLA, it is unlikely that DAC will be a prominent technology that receives investment through the CDRLA procurement program.

  1. Despite millions of dollars in government and private investment, including from the US DOE and major fossil fuel companies, DAC has never been successfully demonstrated on a large commercial or utility scale.

Topline: DAC is a new climate technology and that is why we have not seen it at scale. Following on successful earlier policy interventions for renewable energy that helped scale and bring down their costs, the goal of this program is to catalyze early development of CDR projects so that they become cheaper and more viable at scale in future decades.

Conceptually DAC has been established for decades, but as a climate mitigation technology it is brand new. Therefore, the fact that the technology has not been demonstrated at large or utility scale is to be expected. The goal of a serious, science-based solution oriented public policy should be to change that, rapidly. If the same cost criteria proposed in the opposition statement had been applied to solar and wind energy in earlier decades, these technologies would never have reached that cost parity that they have attained today. The aim of public policy right now must be to start scaling promising, technically ready CDR applications, including DAC, so that they become more economical in future decades.

In reality very little funding has been committed to CDR in the past by either U.S. DOE or major fossil fuels companies, and only very recently during the current administration has this changed. In the last two years small innovation grants (<$2 million) have been awarded for promising DAC research & development projects, including several in New York State. The opposition statement is evidently conflating past investments in carbon capture & sequestration technology with investments in carbon dioxide removal technology. These are two entirely separate things, and understanding this difference is essential to understanding the intent of the CDRLA.

It is worth noting that in October 2021 the world’s first carbon dioxide removal DAC project was commissioned in Iceland. It is powered entirely by zero-carbon geothermal energy, and it was funded by thousands of individuals through a voluntary subscription program. No oil and gas companies were involved in making this project happen.

  1. Federal taxpayer dollars are already being used to support Direct Air Capture attempts. We believe the NYS funds would be better invested elsewhere – such as achieving the first 85% of carbon emissions reduction or by making energy efficiency retrofits more affordable for homes and commercial buildings.

Topline: The CDRLA calls for very modest funding over an initial 5 year authorization. The experience of renewables, battery storage and electric vehicles has taught us that within the U.S. context states must play a leadership role in advancing necessary climate solutions, rather than waiting for the gridlocked federal government to move first.

As stated above, we agree that carbon emissions reductions must be prioritized, and we support the full funding of the CLCPA so that this goal, already enshrined in law, is realized.

  1. In 2020 the US government allocated $450 million over 5 years to be used for research and demonstration of direct air carbon capture. The $1 trillion Infrastructure Investment and Jobs Act passed by the U.S. Senate in August 2021 included funding to establish four DAC hubs. We do not support these uses of federal dollars, but are writing to urge you not to provide state support for such misguided approaches.

Topline: See #9 above. But we must also be realistic about the future of federal policy in relation to carbon dioxide removal and climate commitments more generally. Investments made today by Democrats can quickly be reversed or subverted when governing power changes hands, as we’ve seen in the recent past. Climate forward states are more immune to policy reversal and subversion.

Because carbon dioxide removal is necessary to preserve a livable climate, and because the United States has emitted a disproportionate amount of global greenhouse gas emissions historically, we support recent federal actions that have been taken to accelerate CDR innovation, scale up and cost reduction. Such commitments are morally imperative and consistent with the objective of achieving global climate justice.

However, as the national experience of renewable energy and electric mobility has taught us, states play a massive role in advancing and creating markets for climate solutions. If not for the policy commitments of New York, California, and a handful of other climate forward states (and cities), demand - and cost parity - for renewables and electric vehicles would be nowhere near where they are today. Further, in the US context, states matter because they provide a much greater degree of policy continuity and certainty, compared to the Federal government. As we saw in 2016, serious, science-based climate policies and commitments can and will be easily reversed or subverted by Republican executive and legislative actions. Are we really willing to leave it to Washington to maintain a consistent, coherent, serious climate policy of any kind given current political realities? It is up to states to set the precedent and maintain the course.

  1. Natural carbon removal options (i.e., biological sequestration methods) are a better use of funds. While carbon removal may ultimately be necessary in the transition to the 2050 net zero emissions goals presently included in the CLCPA, there are natural carbon removal options that NYS should prioritize incentivizing and subsidizing. These include regenerative agriculture practices that increase soil carbon content, such as composting, cover cropping, and improved grazing management; afforestation, reforestation and the restoration of coastal and marine habitats.

Topline: Every CDR pathway is based on natural chemical, geologic, or oceanic processes. Regenerative agriculture, forest carbon, and “blue carbon” are essential and should be supported by state policy. However we also need durable carbon removal to meet our climate goals, and the purpose of the CDRLA is to provide early market support to scale a range of pathways that durably store carbon in the earth or ocean.

Investment in low cost natural carbon removal solutions is justified on the grounds of both climate benefit and ecosystem services. However, these solutions alone are not enough to match the levels of carbon dioxide removal required to maintain a livable climate.

According to the National Academies of Science, Engineering and Medicine’s 2019 Consensus Study Report: Negative Emissions Technologies and Reliable Sequestration: A Research Agenda:

“Afforestation/reforestation, changes in forest management, uptake and storage by agricultural soils, and bioenergy with carbon capture and storage (BECCS)… can be safely scaled up to capture and store substantial amounts of carbon, but significantly less than ~1 Gt/y CO2 in the United States and ~10 Gt/y CO2 globally.” (p. 8)

The report stresses that nature-based carbon dioxide removal may be difficult to attain at even this scale, and could “substantially less than 1 Gt/y CO2 in the US and 10 Gt/y CO2 globally . . . by a factor of two or more” compared to their maximum potential “because they require unprecedented rates of adoption of agricultural soil conservation practices, forestry management practices, and waste biomass capture; and that “many past programs to induce landowners to change forest, grazing, and cropland management were not successful.” (p.8)