News Brief

NYC Carbon Caps Could Cost More in Frontline Communities

Complying with New York City’s building performance standard will be a breeze for many but potentially harder in “environmental justice communities,” says a recent report on carbon trading.

 Manhattan skyline

Building owners in environmental justice communities will likely spend more to comply with Local Law 97 in New York City.

Photo: Fred Hsu. License: CC BY-SA 4.0.
Without intervention, already vulnerable communities in New York City could bear the brunt of cost impacts from Local Law 97—the building performance standard that places carbon caps on large buildings starting in 2024.

“On average, building owners in environmental justice communities [EJCs] will need to spend more money to bring their buildings into compliance than building owners outside of those neighborhoods,” according to a City-commissioned report analyzing the potential for carbon trading as an alternative pathway to meet requirements.

However, the definition of EJC is in flux, so when NYC finishes its legal process of defining the term, the new map could be quite different from the report writers’ map.

Local Law 97 already encourages energy-efficiency upgrades but also allows for purchase of renewable energy certificates and carbon offsets. Owners of buildings that don’t hit the required cap will be fined.

One reason for the discrepancy between EJCs and other neighborhoods is that buildings that burn fuel oil #4 (a type of “bunker fuel”) are concentrated in EJC neighborhoods. Also, commercial buildings, which are mainly located outside EJCs, tend to rely more on electricity than residential buildings do. And with a New York State regulation on the books requiring grid decarbonization in the state by 2040, those commercial properties are likely to suffer minimal consequences from the local law, the report authors project. What’s more, they argue, “If the electricity grid is decarbonized by 2040 … grid decarbonization will drive most of all citywide emissions reductions necessary to comply with L[ocal] L[aw] 97 at a city level”—requiring total investments of just $1.2 billion between 2024 and 2050.

With help from the City, the local law could become an opportunity for building owners in EJCs to improve living conditions for residents. One of the carbon-trading proposals from the authors recommends an auction system whose proceeds would fund building retrofits in EJCs.

More on building performance standards

Energy Benchmarking and Transparency Laws: Do They Work?

Cities Crack Down on Buildings via Performance Standards

Energy Grades to Be Posted in NYC

For more information:

City of New York

Published February 7, 2022

Melton, P. (2022, January 20). NYC Carbon Caps Could Cost More in Frontline Communities. Retrieved from

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