Greening buildings (photo: Michael Appleton/Mayor's Office)

This winter had a lot of erratic weather for New Yorkers, including the second-warmest January ever. While less frigid temperatures may be a relief to some, they serve as a reminder that our climate is changing and these changes are having devastating impacts. Between 2017 and 2021 the U.S. experienced $765 billion in losses and 4,500 deaths related to extreme weather events, eight times higher than in the 1980s. New York alone experienced over $13 billion in losses over the same period and is considered one of the most vulnerable cities in the world to climate extremes.

New York City is attempting to take dramatic action to reduce carbon emissions through Local Law 97, but opponents are threatening to delay its implementation by seven years. We can’t afford to wait to act because climate change will continue to have unimaginable effects on our planet, our city, and our way of life if we don’t act swiftly to reduce our carbon emissions.

Local Law 97 aims to curb the carbon footprint of large buildings, which account for nearly two-thirds of greenhouse gas emissions in New York City. The law requires buildings larger than 25,000 square feet to meet growingly stricter emissions limits beginning in 2024 or face hefty penalties. Beyond reducing New York’s carbon footprint, Local Law 97 is intended to promote investment in building upgrades which will improve the quality of life of New York City residents and create new job opportunities in construction and manufacturing.

The policy is receiving backlash from building owners, real estate developers, and some local officials over the current lack of guidance and planned penalties for non-compliance with the law. While the Department of Buildings has finalized some rules, they have yet to provide clarity on several elements key to implementation. Rules regarding the purchase of renewable energy credits and how penalties will be altered for those who make good faith efforts to reduce emissions have not been finalized. For building owners who would need to start preparing for compliance now, many claim they will end up paying fines regardless of whether they attempt to make improvements. Concern over the impact of the law on building owners has led some legislators to introduce a City Council bill to delay implementation by seven years.

Even if efforts to delay Local Law 97 are defeated, the law as currently written still lacks the teeth to properly incentivize enough building owners to engage in retrofitting. Without including a cap on the number of renewable energy credits or RECs a building can purchase, property owners can maintain compliance with the law without lowering emissions.

It’s estimated that 25% of multi-family properties and 66% of office properties currently above 2030 benchmarks can achieve compliance solely through purchasing RECs. Also of concern is whether the Department of Buildings will have the resources to enforce the law properly. The Department of Buildings was among many agencies to have its funding reduced in proposed budget cuts by the Adams Administration.

The desire of building owners to rely on RECs makes sense since rules on penalty adjustments for good faith efforts have not been finalized and potential investment in building improvements may not lead to the necessary emissions reductions required by the law. New York has established financing structures such as CPACE to remediate these concerns. Through the program, property owners can recoup the money spent on green upgrades made over a three-year period. But the city should do more to provide property owners with assurance that investing in building improvements is the correct decision.

In the current drafted rules, the Department of Buildings has offered a one sentence solution for how good faith efforts to retrofit buildings will be taken into consideration when deciding on penalties for not meeting emissions standards. However, to property owner advocates, such as the Real Estate Board of New York, this is an underwhelming solution. 

If we want the retrofitting of buildings to occur, the finalized rules need to encourage groups like REBNY to get on board. One potential strategy is to enact a moratorium on fines for those that demonstrate good faith efforts (which also needs to be defined) to retrofit buildings to meet emission standards whether or not their buildings meet 2024 targets. Doing so would further encourage investment by building owners in upgrades rather than choosing to pay fines or purchase energy credits. 

For Local Law 97 to be effective, implementation must incentivize building owners to take action to reduce emissions instead of accepting fines and to do so through building upgrades rather than the purchase of RECs. Because, while fines can act as an incentive, they won’t reduce our emissions; only making intentional building improvements will. Ultimately, it is vital to the City’s carbon emissions goals that Local Law 97 makes the impact of fines felt for those who don’t comply, is forgiving of those who make good faith efforts to retrofit buildings, and that the Department of Buildings has the resources needed to properly implement the law.

Local Law 97 is at risk of failing because it is our nature to discount the cost of the future and to think of climate change as a future problem. But we are running out of time to develop solutions that will reduce our carbon footprint and Local Law 97 is an opportunity to do so. Without a robust implementation of the policy, our buildings will continue to deteriorate, our emission levels will remain unchanged, and instead of the future of our city being in our hands it will be in the hands of our climate and forces out of our control.

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Noah Brook is a graduate student specializing in policy analysis at NYU’s Wagner Graduate School of Public Service.