By Liz Young, originally published in Albany Business Review on Jun 19, 2019, 5:00pm EDT, Updated Jun 20, 2019, 12:37pm EDT.
Costs, challenges and opportunities for businesses in New York’s far-reaching climate plan
New York lawmakers expect to pass a nation-leading plan this week to address climate change by slashing greenhouse gas emissions and moving almost entirely to renewable energy in the next three decades.
The shift will have huge implications for businesses in the state. Some are concerned about the high price tag of switching to new technology; others say there’s opportunity to be had in getting involved with new practices as the world turns to the green economy.
The bill — called the Climate Leadership and Community Protection Act — requires New York to cut greenhouse gas emissions to 85% below 1990 levels by 2050, offsetting the other 15%. The state will have to get 70% of its electricity from renewable sources by 2030 and go carbon-free by 2040.
The new standards could affect every industry because of the sweeping scope, says Dennis Elsenbeck, the head of energy and sustainability at Phillips Lytle LLP. Elsenbeck sees potential for businesses to capitalize on the move to renewable energy, creating jobs in the process.
Worries about the cost
But in the immediate future, some businesses — like a Schenectady trucking company — are worried about the substantial costs they face as part of the transition to greener technology.
Laura and Ric Lucia operate Lucia Specialized Hauling Inc., which has a fleet of 15 diesel trucks that haul heavy equipment for power plants and factories. Clients have included General Electric Co. The Lucias say the cost to switch to electric trucks is prohibitive.
“You can’t wave a magic wand and make everyone go out and buy a new fleet of trucks,” Laura Lucia said. “It’s impossible.”
Ric Lucia is an advocate of moving to electric trucks in the future, but he says he can’t make the switch right now. A diesel truck currently costs around $150,000, compared with an electric truck that might cost $250,000.
“I don’t know what they want us to do,” Laura Lucia said. “Everyone’s like, ‘OK, just pass the price onto the consumer,’ but my competition is in the other 49 states.”
Ric Lucia says the best thing for him to do would be to close up and move out of New York. He’s getting calls from other companies asking him to move them away.
“There will be a mass exodus,” he said. “I’ve already got people calling me, ‘How quick can you get me out?’ That’s what I get paid to do, plant relocations. It used to be 50-50, 50% moving in, 50% moving out. Now it’s 90-10, 90% moving out.”
Seeking out the opportunities
Phillips Lytle’s Elsenbeck, who is an engineer and spent 30 years as an executive at National Grid, says his advice is for business owners to get as involved as they can in the state’s process of figuring out the details — and as early as they can. It’s critical for companies to figure out where the opportunities might be, he says.
The legislation calls for a 22-member council, made up of state officials, to work alongside smaller groups on how to put the new plan into action. If industry leaders can get into those smaller groups, they may have a chance to help shape New York’s economic development future, Elsenbeck says.
“The opportunities for all companies, whether in transportation or manufacturing, is to really understand what they do well and then look at different business opportunities to take advantage of the energy possibility the policies are taking us in,” he said.
“Whether we set these goals at 50%, 70% or 100%, the global market is knee-deep in the green economy,” he continued. “The train has left the station. Let’s get in there before we get hit by the caboose.”
The bill passed in the state Senate on Tuesday night and in the Assembly in the early hours of Thursday morning. Both chambers are controlled by Democrats. Gov. Andrew Cuomo, also a Democrat, is expected to sign it.
“With the passage of the Climate Leadership and Community Protection Act, New York has enacted the most aggressive climate change legislation in the nation,” Cuomo said in a statement Thursday morning. “And we will not stop there. After passing this bill, we continue to develop and implement policies and initiatives to spur unparalleled innovation and investments. As we transition to a net zero emissions future, we will continue to bolster green job initiatives to ensure that all New Yorkers share in the benefits of a clean energy economy.”