29 Sep, 2023

$30B NC budget would restrict several carbon reduction tools

author's image

By Abbie Bennett


The Republican-controlled North Carolina General Assembly passed a $30 billion budget that includes several measures to restrict the state's ability to reduce carbon emissions. But Gov. Roy Cooper (D) has said he will not veto the state budget because it includes a major priority for his party: the expansion of Medicaid.

The budget strips regulators' authority to require carbon offsets and eliminates many regulatory methods of controlling vehicle emissions, among other measures. It also blocks the state from entering the Regional Greenhouse Gas Initiative.

It passed the Senate on Sept. 22 with 26 senators voting in favor, 17 voting against and seven abstaining. The House passed the bill 70-40 the same day with 10 abstentions.

Although Cooper set statewide climate goals to slash greenhouse gas emissions in half by 2030 compared to 2005 levels and to reach net-zero emissions no later than 2050, he said he will allow the budget to become law without his signature.

Shortly before approving the budget, state legislators passed another Republican-backed bill that would redefine "renewable energy" as "clean energy" to include nuclear and fusion. Cooper has not yet said what action he will take on that bill, but Republicans have a supermajority in the General Assembly and could override a veto.

"At a time when the executive branch is trying to force through its preferred policies by abusing the rule-making and regulatory processes, it was important to ensure that the legislature take on permitting reform and adopt policies that won't unnecessarily burden North Carolinians and businesses," Sen. Paul Newton, a Republican and former Duke Energy Corp. executive, said in a statement.

Vehicle emissions, environmental measures

The budget also adds fees for electric or hybrid vehicles intended to balance the loss of taxes on gasoline, and it prevents North Carolina from adopting or enforcing standards that would control emissions from new vehicles, including a ban on requirements that mandate the sale or purchase of "zero-emission vehicles" or electric vehicles. Additionally, lawmakers removed requirements for vehicle emissions tests in all counties except Mecklenburg, which is home to the state's largest city.

Other measures in the budget restrict local governments from banning or charging fees for "auxiliary containers" at retailers such as grocery stores, likely targeting plastic bag bans or fees. Coastal communities will receive assistance, including $10 million in storm resilience grants and $5 million to upgrade stormwater systems in addition to millions in individual resilience projects.

Overall, however, environmental advocates said the budget is likely to do more harm than good.

Cynthia Satterfield, director of the North Carolina chapter of the Sierra Club, said the budget presents a "minefield of environmental threats" that will "simultaneously stall our progress toward a clean energy economy."

"Unfortunately, the North Carolina legislature prioritized consolidating its political power and banning tools the state could use to address climate change in this budget instead of taking responsible steps to prevent more climate-related harms to families and communities," said Mary Maclean Asbill, director of the Southern Environmental Law Center's North Carolina offices.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.