New York’s Governor Kathy Hochul signs a controversial law charging fossil fuel companies $75 billion for climate change damages, sparking debate and potential legal challenges.
At a Glance
- New York’s Climate Change Superfund Act requires fossil fuel companies to pay $75 billion for climate change damages.
- The law targets companies responsible for significant emissions between 2000 and 2018.
- Funds will support climate change strategies, including infrastructure upgrades and environmental restoration.
- Critics argue the law is unworkable and likely to face legal challenges.
- The legislation is modeled after the 1980 Superfund law for toxic waste cleanup.
New York Takes Bold Action on Climate Change
Governor Kathy Hochul has signed into law the Climate Change Superfund Act, a groundbreaking piece of legislation that aims to hold fossil fuel companies accountable for their contributions to climate change. The law requires oil, natural gas, and coal companies to pay $75 billion to New York State for carbon emissions and climate change impacts.
The funds collected over 24 years will support resiliency projects such as coastal protection and flood mitigation. This move follows Vermont’s lead in implementing similar regulatory actions, signaling a potential trend in state-level climate policies.
Targeting Major Polluters
The law focuses on companies responsible for significant greenhouse gas emissions from 2000 to 2018. According to Governor Hochul, energy companies are responsible for 1 billion metric tons of greenhouse gas emissions in New York during this period. An analysis suggests that both foreign and American companies will pay about $3 billion annually over 25 years.
Saudi Aramco could face the largest annual fee of $640 million for emissions from 2000 to 2020. Other companies facing assessments include Pemex, Lukoil, Exxon, Chevron, Shell, and BP. The law targets oil and gas companies that have produced over one billion tons of greenhouse gas emissions globally in the past 24 years.
Industry Opposition and Potential Challenges
The petroleum industry views the law as a declaration of war against energy providers in New York. Over three dozen energy firms and business advocates urged Governor Hochul to veto the bill, citing policy and constitutional concerns. Critics argue that the law is unworkable and likely to face legal challenges.
The American Petroleum Institute criticized the legislation as a punitive fee on American energy. A former state energy utility regulator has expressed doubts about the law’s legal sustainability and questioned the feasibility of collecting funds from foreign firms.
Support for Climate Action
Despite industry opposition, the law has garnered support from climate change activists, including the Sierra Club and Environmental Advocates NY. The New York State Department of Environmental Conservation backs the law for holding polluters accountable and complementing state efforts to reduce emissions.
“With nearly every record rainfall, heat wave, and coastal storm, New Yorkers are increasingly burdened with billions of dollars in health, safety, and environmental consequences due to polluters that have historically harmed our environment.” – Governor Hochul
The law establishes a Climate Superfund to hold polluters accountable and fund critical infrastructure investments. It aims to reduce the financial burden on taxpayers for cleanup and mitigation after weather disasters, shifting climate adaptation costs from New Yorkers to fossil fuel companies responsible for pollution.
Implementation and Future Outlook
Before imposing penalties, the law requires the state to establish regulations to identify liable parties and develop a fund allocation system. The legislation coincides with the reinstatement of congestion pricing in New York City and upcoming “cap and invest” rules, signaling a comprehensive approach to addressing climate change at the state level.
As New York takes this bold step, the eyes of the nation will be watching to see how the law is implemented and whether it can withstand the expected legal challenges. The outcome could set a precedent for other states considering similar measures to combat climate change and hold fossil fuel companies accountable.
Sources:
- Climate Change Superfund Act
- Hochul signs NY law that will charge $75B to oil, gas and coal companies for climate change — but critics say customers will pick up tab
- Hochul Signs Law That Penalizes Companies for Greenhouse Gas Emissions
- NY Governor Signs Law That Charges Companies for Greenhouse Gas Emissions
