Press Release: NYU Study Finds Adding Carbon Trading to Landmark Climate Law Could Amplify Benefits and Promote Environmental Justice; Cost of Compliance with the Law Also Predicted to be Lower than Commonly Reported

Today, NYU researchers released the first study to rigorously assess the predicted impacts of Local Law 97 of 2019 (LL97), the City of New York’s signature climate law. The law caps the amount of greenhouse gases (GHGs) that large buildings can release, starting in 2024.

NYU and a team of researchers it assembled conducted the study under a contract with the New York City Mayor’s Office of Climate & Sustainability (MOC&S), which was required by LL97 to undertake a study of the feasibility of establishing a carbon trading program for buildings.  Adding a trading option would allow buildings that reduce emissions more than LL97 requires to sell credits to other buildings to comply with their emissions caps. 

As a predicate to analyzing the feasibility and impact of establishing a carbon trading program, the study team conducted a detailed assessment of the predicted costs and benefits of implementing LL97 as it is today, without trading.

The study does not substantiate the concerns about the costs of meeting LL97’s emissions caps that some in the real estate industry have expressed. On the contrary, the study finds that implementing LL97 could save the average building owner money during the study period (2024-2050).

Critically, the study finds that much of LL97’s impact is contingent on the pace of the introduction of renewable sources of electricity across New York State. This is because the electricity that buildings buy from the electric grid is a major source of buildings’ GHG emissions.  If renewable sources are introduced at the pace that New York State mandated in a separate 2019 State law, building emissions will decline without many building owners having to make major investments in their properties. Moreover, many of the energy efficiency investments that LL97 will encourage owners to make will pay for themselves relatively quickly, because they would reduce the amount of electricity needed each year, therefore reducing energy costs.

The law will not affect commercial and residential buildings equally. To the contrary, the study finds that as electricity increasingly comes from renewable sources, LL97’s caps become relatively more costly for residential buildings to comply with compared to commercial buildings like office buildings. This is because electricity accounts for a larger share of total energy used in commercial buildings than residential buildings. Thus, shifting to renewable sources of electricity will cause commercial buildings’ emissions to fall by more than residential buildings’ emissions.

To the extent that LL97 imposes costs on building owners, emissions trading could help lower these costs.

The study specifically focused on designing a trading program for buildings’ GHG emissions that would center environmental justice in historically marginalized areas of the City. In particular, the study included a detailed assessment of the impact of adding an emissions trading program on environmental justice communities and sought to design programs that would increase investment and emissions reductions in those areas.

The study offers two alternative proposals for how a trading program could be designed to improve outcomes under LL97. Both options would benefit the City as a whole, and environmental justice communities in particular.

Using a model developed by The Brattle Group, the study found that both proposals would lead to deeper GHG reductions and lower the cost of complying with LL97. Allowing trading would also generate more investment in the NYC economy than would occur if LL97 moves forward without a trading component, and would also save more lives by reducing air pollution. In addition, both proposals would lead to more investment and save more lives in environmental justice communities than implementing LL97 without a trading program.

Should New York City move forward with a trading plan, it would be the first city to adopt a trading program that actively seeks to increase investment and improve air quality in historically marginalized communities alongside other long-standing goals for trading programs, such as reducing the costs of lowering pollution levels.

The study was led by a team of researchers at NYU together with experts from The Brattle Group, HR&A Advisors, Steven Winter Associates, and Sustainable Energy Partnerships, who worked collaboratively with the New York City Mayor’s Office of Climate & Sustainability. Two stakeholder groups provided input throughout the study process as well. At the request of the MOC&S, Urban Green Council managed one of the stakeholder groups based on their earlier convenings on the topic. The other group was convened directly by MOC&S.

The study is available here.

Five fact sheets about LL97, the study, its findings, its proposals for carbon trading, and environmental justice and the carbon trading study are also available.


“In 2019, New York City demonstrated bold leadership in adopting Local Law 97. This study extends that leadership by devising an innovative approach to carbon trading that advances a diverse suite of policy objectives, including increasing local investment, lowering compliance costs, and furthering environmental justice.”

Danielle Spiegel-Feld, Executive Director of the Guarini Center on Environmental, Energy and Land Use Law at NYU School of Law; Project Director & Co-Principal Investigator

“This Study has important lessons for policymakers interested in reducing carbon emissions from buildings.  It shows that a carefully designed trading program could address real estate industry concerns about the costs of LL97’s caps and reduce air pollution and save lives in the neighborhoods of the city where the housing stock needs to be modernized to remove fossil fuels.”

Katrina Wyman, Sarah Herring Sorin Professor of Law, at NYU School of Law; Lead Principal Investigator

“With the passage of Local Law 97, New York City set a new standard for reducing citywide carbon emissions and creating a more sustainable future. A carbon trading system could be an important addition to ensure that carbon reductions contribute to a more equitable city. Our study shows the positive impact carbon trading can have on reducing emissions, and helps stakeholders understand the impacts of policy changes on tenants and owners across the largest real estate market in the country.”

Cary Hirschstein, Partner, HR&A Advisors; Co-Project Director

 “This Study shows that a well-designed trading program that uses established mechanisms can meet both economic and environmental justice goals to help everyone reduce more emissions at lower costs.”

Kathleen Spees and Kasparas Spokas, The Brattle Group; Economic Modelling Leads

“This research underscores the value of modelling costs and benefits—not just for building owners, but for the public at large. The findings clearly demonstrate the importance of the State achieving its schedule for decarbonizing the grid.”

Mark Willis, Senior Policy Fellow, NYU Furman Center; Co-Principal Investigator

“This study clarifies that New York City can efficiently reduce pollution from buildings while prioritizing equity and protecting public health. A trading program explicitly designed to emphasize environmental justice could deliver enormous benefits to New Yorkers. The programs we analyzed would reduce health hazards from local air pollution and address climate-damaging emissions while boosting the New York City economy.”    

Richard L. Revesz, Director, Institute for Policy Integrity at NYU School of Law

 “The reduction of carbon emissions in cities represents a critical pathway to global climate action. This study represents a practical example of how data-driven analysis can help to inform public decision-making for fair and effective climate policy.”

Constantine E. Kontokosta, Associate Professor and Director of Civic Analytics and Bartosz Bonczak, Research Scientist, NYU Marron Institute

“Urban Green helped launch the policy thinking on trading and welcomes this important study that brings much-needed data to inform implementation of Local Law 97. As this study shows, with the right guardrails trading can deliver greater carbon savings from NYC buildings to make the law more effective, while providing a new capital stream to fund energy efficiency and decarbonization in environmental justice areas.”

John Mandyck, CEO, Urban Green Council

For inquiries, please contact Danielle Spiegel-Feld at: