New York is now the second state to implement a ‘polluter-pay’ Climate Change SuperFund Act, with New Jersey, California, and Maryland potentially following suit.
On December 26, Gov. Kathy Hochul enacted New York’s Climate Change Superfund Act, a liability law that is expected to face legal challenges for potentially overriding federal regulatory authority. This law requires carbon-emitting companies to pay an estimated $75 billion for climate damages allegedly incurred between 2000 and 2018.
Passed by lawmakers in June and taking effect in 2028, the legislation mandates annual assessments of large companies’ carbon emissions over those first 19 years of the 21st century to counteract the damage attributed to extreme weather worsened by greenhouse gases.
“New York has fired a shot that will be heard round the world: the companies most responsible for the climate crisis will be held accountable,” stated Democratic state Sen. Liz Krueger, a primary sponsor of the New York Climate Change Superfund Act.
The bill approximates that compliance will cost roughly three dozen of the state’s top carbon-emitting companies about $3 billion each year for the next 25 years, totaling $75 billion. This figure represents 15 percent of the $500 billion estimated by the Fiscal Policy Institute that the law could ultimately cost by 2050.
“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,” Hochul remarked in a statement released by her office on December 26, emphasizing that $500 billion translates to “more than $65,000 per household.”
The funds raised will be allocated to a Climate Change Adaptation Cost Recovery Program aimed at restoring and safeguarding coastal wetlands and enhancing roads, bridges, and stormwater systems, among other infrastructure resilience initiatives.
Related Stories
The legislation in New York is modeled after the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the Superfund law, which mandates that polluting companies finance the cleanup of contaminated land, water, and air.
New York becomes the second state to pass a “polluter pays” liability law, as Vermont adopted its law in July 2024, which was enacted without Republican Gov. Phil Scott’s endorsement.
Vermont’s law requires the state treasurer to assess damages resulting from “climate change-caused disasters” along with the expenses related to adapting to changing conditions, such as increased precipitation, when evaluating carbon emitters.
Upon completing these assessments, Vermont intends to impose fees on companies responsible for more than 1 billion metric tons of greenhouse gas emissions over the last three decades, calculated based on their proportion of global emissions.
New Jersey lawmakers, currently in recess from the 2024–2025 session, are likely to move forward with Senate Bill 3545, the Climate Superfund Act, which would resemble New York’s legislation in early 2025.
Introduced in the Senate in September, the bill passed an Environment and Energy Committee hearing on December 12 and has since been referred to the Senate Budget and Appropriations Committee.
This year, “polluter pays” propositions were also introduced in Massachusetts, California, Maryland, and Minnesota, with plans to be reintroduced during the 2025 legislative sessions.
Advocacy groups like 350 Mass, an environmental nonprofit, assert that advancing a 2025 version of the 2024 SB 481 is a critical priority in Massachusetts.
Maryland’s RENEW Act of 2024 aims to impose fines on the 40 largest greenhouse gas emitters from the past two decades, projected to generate $900 million annually.
New York State Sen. Liz Krueger (D-Manhattan) and members of Met Council on Housing, Common Cause, and the Fair Elections Coalition on Aug. 12, 2013, at the REBNY headquarters in Midtown Manhattan. Ivan Pentchoukov/The Epoch Times
‘New Horizons’
The increasing number of “polluter pays” liability laws at the state level represents a strategy for establishing stable regulatory frameworks amid federal instability, according to economists.
A March 2024 analysis from the Columbia University Law School’s Sabin Center for Climate Change Law by Martin Lockman and Emma Shumway, along with a July 2024 National Law Review analysis by Aliza R. Cinamon, identifies state Superfund laws as a “new horizon” for protecting taxpayers from the costs incurred by polluters.
The new Superfund proposals, including New York’s, have faced significant opposition from businesses and industries assembled under the Better Plan, No Bans coalition.
“Employing an ‘all-of-the-above’ strategy that incorporates renewables, natural gas, and existing delivery systems can assist New York State in meeting emission reduction goals while ensuring energy affordability and reliability,” National Fuel Gas Co. stated in a December 10 X post, urging Hochul to veto the bill.
The New York Business Council, a statewide association of 3,200 employers, asserts that local governments and states should refrain from dictating federal energy policy, claiming that “polluter pays” principles unfairly target the energy sector, harming an industry that benefits every part of the economy.
Krueger affirmed that advocates for state accountability and corporate responsibility are prepared to defend this law both in court and within legislative bodies across the nation.
“Historically, courts have frequently dismissed cases against the oil and gas sector by asserting that the determination of climate culpability ought to be settled by legislatures,” she mentioned in her December 26 statement.
“However, the Legislature of the State of New York—the 10th largest economy globally—has accepted that challenge.”
