In April of 2019, the New York City Council passed groundbreaking legislation that caps the amount of greenhouse gases that large building owners can emit, or cause to be emitted, for free. The new law, known as Local Law 97 of 2019 (“Local Law 97”), holds great promise for reducing building energy use, which accounts for roughly forty percent of emissions across the globe and over two-thirds of emissions in New York City. But it will also impose substantial costs on the local real estate industry. With an eye towards minimizing these costs, Local Law 97 calls on the City to conduct a study of the potential to create an emissions trading program for regulated buildings; trading programs have been successfully used for years in industrial sectors to reduce the cost of emissions control, yet how to translate the lessons learned from industrial trading programs to buildings is still very much an open question.
In this essay, Danielle Spiegel-Feld highlights some key points of distinction between the emissions trading program that New York City is contemplating and prior programs that policymakers will need to bear in mind as they develop a trading scheme for this novel context. As the federal government retreats from its efforts to tackle climate change, and the burden of doing so falls increasingly upon local leaders’ shoulders, the question of how to tailor emissions trading programs to the local landscape will doubtless be relevant for cities outside New York City as well.