Companies Could Pay Billions Under NY Climate Superfund Law (2)

New York Gov. Kathy Hochul (D) signed a law that allows the state to charge fossil fuel companies billions for climate change damage, marking a win for activists, dealing a blow to energy giants, and opening the door to litigation.

With the Climate Change Superfund Act across the finish line, New York is now the second state with a “climate Superfund” law. The legislature passed the bill in June and Hochul signed it Thursday.

The law orders the state’s top polluters to pay an estimated $75 billion over 25 years to help New York’s infrastructure better withstand flooding and other climate-related events. Bill sponsors say that amount is a small fraction of the hundreds of billions the state will need for climate remediation through 2050.

“For too long New Yorkers have borne the costs of the climate crisis, which is impacting every part of this state,” Hochul said in a statement. “With the money from this climate change adaptation fund, we will be able to pay for critical climate adaptation and resiliency projects across the state.”

New York joins Vermont in enacting climate Superfund legislation. The bill’s sponsor, state Sen. Liz Krueger (D), characterized Hochul’s action as “a shot that will be heard round the world.”

“Too often over the last decade, courts have dismissed lawsuits against the oil and gas industry by saying that the issue of climate culpability should be decided by legislatures,” she said in a statement. “Well, the Legislature of the State of New York—the 10th largest economy in the world—has accepted the invitation.”

The American Petroleum Institute, which represents about 600 members of the industry, condemned the law.

“This type of legislation represents nothing more than a punitive new fee on American energy, and we are evaluating our options moving forward,” an API spokesperson said in an emailed statement.

Fossil fuel companies found to be responsible for more than 1 billion tons of greenhouse gas emissions from 2000 to 2018 are on the hook, according to the law. Payments will be managed by a state fund and dispersed equitably.

State regulators must determine over the next year how to identify responsible parties and their share of expenses, register those parties under the program, and issue cost recovery demands.

Climate activists praised Vermont even as Gov. Phil Scott (R) expressed concerns and declined to give his signature earlier this year. They celebrated again for New York.

“Big Oil is making a killing off climate disaster—but now, in New York they’ll be on the hook for their damages,” Eric Weltman, Food & Water Watch’s New York senior strategist, said in a statement. “New York State is on the leading edge of polluter pays legislation, redirecting corporate profits into public coffers, and investing in the climate resiliency efforts we need to survive worsening climate chaos.”

Maryland, Massachusetts, and California are also considering climate Superfund laws to manage mounting infrastructure costs.

The bills—modeled after the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), known as Superfund—would almost certainly spur swift litigation from fossil fuel companies upon enactment, legal educators say.

Federal preemption challenges, questions about due process, and more are likely to pop up in court.