Crain’s New York Business: Let Buildings Trade to Meet Carbon Mandate

By Danielle Spiegel-Feld and Richard B. Stewart

The landmark building-efficiency legislation passed by the City Council this month will go a long way toward meeting the city’s climate goals. But it could impose major costs on owners of large buildings. With expensive retrofits and seven-figure fines looming, the city should allow the required emissions reductions to be achieved at the lowest possible cost. A trading program would help.

The City Council opened the door to emissions trading by calling for a study on creating such a program. But there’s no telling how the city will respond to the analysis. New legislation may be required to enact carbon swapping.

The thinking behind emissions trading is that some sources can reduce greenhouse gases more cheaply than others. To minimize the total cost of reductions, regulatory programs should harvest cuts from sources that can do so for the lowest costs. This is what emissions- trading programs aim to do.

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