CONCORD, MA — WASHINGTON, DC 47 Junction Square Drive Concord, MA 01742 978-369-5533 www.mjbradley.com MJB&A Issue Brief ◼ March 30, 2020 State Approaches to Climate Policy: Massachusetts, New York, and New Jersey States have long been at the forefront of designing and implementing climate and energy policy, experimenting with new policies, refining existing programs, and expanding successful approaches into new states and sectors. While many states recognize that climate change is a global concern, in the absence of federal action, state- and- regional-level approaches continue to drive emission reductions in states and regions. This issue brief focuses on three states—Massachusetts, New York, and New Jersey—that have long been active in the pursuit of decarbonization strategies. Each employed somewhat different vehicles to establish initial goals that require varying levels of agency action, but all three are consistently taking additional steps in recent years to achieve significant greenhouse gas (GHG) reductions. Other states may also look to adopt such approaches for their own sectors. This issue brief provides an overview of the climate policy that has evolved in these three states related to the electric sector. Climate Policy Evolution, Current Status, and Key Drivers Massachusetts, New York, and New Jersey have long been leaders in state climate policy, and each have legislative requirements to reduce statewide GHG emissions by at least 80 percent by 2050 (below a specified base year). Massachusetts and New Jersey are considering means to achieve further reductions, and New York is working to achieve its 85 percent reduction requirement and net-zero emissions goal by 2050. Recently, all three states have also taken actions to require state agencies to implement policies to achieve economy-wide goals. For each state, there have been several key drivers for them to strengthen their decarbonization policy approaches. Massachusetts Policy Evolution: Massachusetts’ physical location was an early driver of its initial climate thinking. High coastal populations make the state particularly vulnerable to sea level and extreme weather, and Massachusetts has viewed itself as being at the “end” of the energy pipeline, with most of its energy sources derived from other regions of the country. Specifically, the state has had the perspective that most of its spending on fossil fuel energy has historically flowed out of the state and has failed to provide income to in-state industries.1 Given these challenges, Massachusetts has seen climate policies as an opportunity to combat the public health and safety concerns related to climate change as well as drive state energy independence, economic growth, and energy pricing certainty for the state. In 2008, the Massachusetts legislature enacted the Global Warming Solutions Act (GWSA), which directed the Secretary of Energy and Environmental Affairs (EEA) to set GHG limits for 2020, 2030, 2040, and 2050, 1 Massachusetts Clean Energy and Climate Plan for 2020 (December 29, 2010), https://archives.lib.state.ma.us/bitstream/handle/2452/70734/ocn707398657.pdf?sequence=1. M.J. Bradley & Associates | Strategic Environmental Consulting Page | 1 including a requirement that the 2050 limit be at least 80 percent below 1990 levels.2 The GWSA specifically directed the Massachusetts Department of Environmental Protection (MassDEP) to promulgate regulations and policies sufficient to achieve emissions goals. In 2010, the EEA set a target of 25 percent below 1990 levels by 2020.3 In 2016, the Massachusetts Supreme Judicial Court held in Kain v. Department of Environmental Protection that the GWSA requires MassDEP to regulate in-state sources of emissions sufficiently to achieve the state’s GHG emission limits.4 In that case, the environmental plaintiffs argued that MassDEP failed to fulfill its statutory mandate under the GWSA to achieve the statutory targets given that the state acknowledged in 2010 that it would achieve an 18 percent reduction from 1990 levels by 2020 as opposed to the 25 percent reduction target. The state Supreme Judicial Court agreed and held that MassDEP was not complying with its legal mandate to reduce the state’s GHG emissions. The Kain decision was a key factor in the Baker Administration’s decision to issue, within months of the decision, an Executive Order instructing the EEA to develop a comprehensive energy plan and for MassDEP to promulgate regulations to ensure statewide emissions limits are met.5 Current Status: In 2018, EEA published a progress report showing that 2017 GHG emissions were 22.4 percent below the 1990 level, approaching the state’s 2020 goal.6 Since April 2019, EEA, MassDEP, and other state agencies have been engaged in a planning process to identify technically and economically viable strategies, policies, and implementation pathways for Massachusetts to reduce its GHG emissions by at least 80 percent by 2050, including pathways capable of achieving net zero emissions in 2050. Through this process, these state agencies are also working to identify the priorities to achieve an interim goal by 2030. To do so, the state is conducting a “2050 Decarbonization Roadmap” process that will include a quantitative pathway scenario analysis. The state intends to release the Roadmap later this year, which will also inform EEA’s setting of the 2030 emissions target and the development of the state’s implementation plan to achieve this goal. The GWSA requires the state to publish the 2030 target by the end of 2020; the EEA Secretary also intends to set the 2050 limit by the end of this year.7 In January 2020, Governor Charlie Baker announced his commitment to net-zero GHG emissions during his State of the Commonwealth address. Following this announcement, in February 2020, EEA released a draft determination establishing net-zero GHG emissions as the state’s new legal emissions limit for 2050 and 2 Massachusetts, An Act Establishing the Global Warming Solutions Act (signed August 7, 2008), https://malegislature.gov/Laws/SessionLaws/Acts/2008/Chapter298. 3 Massachusetts EEA, Letter Regarding Determination of GHG Emission Limit for 2020 (December 28, 2010), https://www.mass.gov/files/documents/2017/12/06/Former%20Secretary%20Bowles%E2%80%99%20Determination%20of%20the% 20Greenhouse%20Gas%20Emission%20Limit%20for%202020.pdf. 4 Kain v. Department of Environmental Protection, 474 Mass. 278 (2016). 5 Massachusetts Office of the Governor, Executive Order 569 (September 16, 2016), https://www.mass.gov/doc/executive-order-569- mass-register-1323/download. 6 Massachusetts, Global Warming Solutions Act 10-Year Progress Report (December 2018), https://www.mass.gov/doc/gwsa-10-year- progress-report/download. 7 Massachusetts, MA Decarbonization Roadmap, https://www.mass.gov/info-details/ma-decarbonization-roadmap. M.J. Bradley & Associates | Strategic Environmental Consulting Page | 2 requested comments from the public regarding specific mechanisms and definitions related to establishing this limit.8 EEA requested comment on the maximum allowable emissions level for the net-zero goal.9 New York Policy Evolution: Similar to Massachusetts and New Jersey, New York’s climate action has become a major priority for the state due to the health and safety concerns related to climate change, economic development goals, and the desire to improve the independence, reliability, cost certainty, and security of the state’s energy supply. New York’s efforts have also been driven by strong environmental justice activism in the state, which can be seen as part of the latest legislative action to require that 40 percent of all state climate and clean energy spending is directed toward disadvantaged communities. In 2009, Governor David Patterson issued an Executive Order establishing a “goal of the State of New York” to reduce statewide GHG emissions by 80 percent below 1990 levels by 2050. In 2014, Governor Andrew Cuomo launched an updated energy policy, Reforming the Energy Vision (REV), which focused on the integration of additional renewable energy into the grid; energy efficiency; clean energy financing; sustainable and resilient communities; energy infrastructure modernization; innovation and R&D; and transportation. A year later, the state issued the New York State Energy Plan, which serves as the roadmap for REV and established an interim 2030 goal to achieve a 40 percent reduction in GHG emissions from the energy sector, below 1990 levels, and detailed several agency actions to help achieve the interim and long-term goals. Current Status: In 2019, New York revised its climate approach by passing landmark climate legislation—the Climate Leadership and Community Protection Act (CLCPA). The CLCPA requires the state to reduce GHG emissions 40 percent by 2030 and no less than 85 percent by 2050 from 1990 levels. It also establishes a goal to reduce GHG emissions from all anthropogenic sources 100 percent over 1990 levels by the year 2050. The CLCPA requires development of a scoping plan to identify regulatory actions and other measures to meet the emission limits and net-zero goal. It also requires the Department of Environmental Conservation (NYDEC) to promulgate regulations by January 1, 2024 that ensure compliance with the state’s emission limits.10 New Jersey Policy Evolution: Early drivers for New Jersey’s action on climate are similar to those of Massachusetts’ and other states, including the objectives of addressing climate change and its impacts, promoting long-term economic development, improving air quality, and improving the reliability and security of the state’s energy supply. In February 2007, then-Governor Jon Corzine signed an Executive Order establishing statewide GHG emission “targets” of 1990 levels by 2020, and an 80 percent reduction below 2006 levels by 2050.11 Less than six months later, the legislature enacted those targets through the Global Warming Response Act (GWRA) for in-state 8 Massachusetts EEA, Draft Letter Regarding Determination of GHG Emission Limit for 2050 (February 26, 2020), https://www.mass.gov/doc/draft-letter-of-determination-on-the-2050-emissions-limit-revised-342020/download.