Date of Award

Spring 2026

Document Type

Thesis

Degree Name

Bachelor of Science (BS)

Department

Economics

First Advisor

Joe Ballard

Second Advisor

Smriti Tiwari

Abstract

The New York City climate law known as Local Law 97 (LL97), passed under the Climate Mobilization Act of 2019, limits yearly greenhouse gases produced by buildings over 25,000 square feet and penalizes those that exceed emissions caps for $268 per metric ton. While 91 percent of covered buildings were able to reach the lower 2024 compliance standard, only 43 percent complied with the much tighter 2030 standards. This paper first develops a game-theoretic model in which a building owner compares the cost of retrofitting against potential penalties under LL97, then estimates a Linear Probability Model (LPM) using building-level data from New York City's Local Law 84 (LL84) Benchmarking System and PLUTO Database to determine whether penalty exposure, assessed property value, and building use type predict the likelihood of compliance. The estimates revealed that the expected penalty exposure had a negative coefficient and statistical significance in all specifications examined, consistent with an anticipatory deterrence effect. Contrary to expectations, increased assessed property value appeared to be associated with a weaker, rather than stronger, compliance response to penalty exposure. Additionally, residential uses appear to have exhibited slightly greater penalty sensitivity than commercial uses. Overall, these findings indicate that in its first year of enforcement, LL97 has functioned as a credible deterrent. However, they also raise concerns as to whether building managers' financial ability to invest in emission-reducing retrofits and/or changes in land ownership structures may become constraints on achieving compliance with both the 2030 and 2050 cap levels.

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

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