“A Shot Heard Round the World”

Polluters to Help Pay for State’s Adaptation Measures

Martin Wahl

On December 26, 2024, New York Governor Hochul signed into law S.2129-B/A.3351-B, the Climate Change Superfund Act establishing a Climate Change Adaptation Cost Recovery Program to be funded by companies most responsible for pollution-caused climate change. Funds are to be used for projects that make New York State more resilient to climate impacts such as flooding and extreme heat.

Refinery spewing toxins, leaving the site uninhabitable. (Courtesy of W. Clarke – Wikimedia Commons)

New York follows Vermont’s lead with their May 2024 enactment of S.259, the Climate Superfund Act, and Massachusetts, Maryland and California also have superfund bills in the works. Green Energy Times reported on Vermont’s landmark bill on page 3 of the August 2024 edition. All the state bills are based on the original 1980 CERCLA law that established a superfund for chemical and oil spill cleanup funded by those responsible for releasing hazardous waste at abandoned or closed sites.

Michael Richardson, Third Act Upstate New York climate activist, said the science supporting the law is clear and that it is time for those responsible to be held accountable: “The production and burning of fossil fuel is the primary cause of the climate disruption that we’re suffering from. With the signing of this Climate Change Superfund Act, which might want to be called the Taxpayer Relief Act, big oil will at long last be held accountable for the damage they sow upon our communities, and they cannot continue to make exorbitant profits, which they’ve been making over the past few years by not paying for the destructive consequences.”

New York State Senator Liz Krueger, representing Manhattan, who sponsored the legislation, said, “The Climate Change Superfund Act is now law, and 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. 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. Well, the Legislature of the State of New York – the 10th largest economy in the world – has accepted the invitation, and I hope we have made ourselves very clear: the planet’s largest climate polluters bear a unique responsibility for creating the climate crisis, and they must pay their fair share to help regular New Yorkers deal with the consequences. And there’s no question that those consequences are here, and they are serious. Repairing from and preparing for extreme weather caused by climate change will cost more than half a trillion dollars statewide by 2050. That is over $65,000 per household, and that is on top of the disruption, injury, and death that the climate crisis is causing in every corner of our state. The Climate Change Superfund Act is a critical piece of affordability legislation that will deliver billions of dollars every year to ease the burden on regular New Yorkers.”

Krueger and Bronx Assemblyman Jeffrey Dinowitz circulated a memo in October 2023 that ranked companies that have released more than 1 billion tons of CO2 between 2000-2020 and “have sufficient nexus with New York State such that the state could successfully enforce an assessment issued under the legislation.” They include:

• $644 million for Saudi Aramco
• $222 million for Exxon Mobil
• $100 million for Russia’s Lukoil
• $89 million for Conoco Phillips

The memo cites a peer-reviewed article, recently updated by Richard Heede in March 2024, that helps rank polluters and establish the amounts they should contribute to the fund.

The law applies to companies that have emitted more than one billion metric tons of greenhouse gases between 2000 and 2020. to be assessed Kreuger’s memo contends that “[t]his period was chosen for a number of reasons, including that, by 2000, there was no reasonable doubt that anthropogenic climate change was the result of burning fossil fuels, the harm caused by greenhouse gases was recognized by the industry as ‘catastrophic’ and a disproportionate share of all global emissions occurred since 2000.”

The bill specifies the following amount of CO2 for fuel types:

• 942.5 metric tons for every million pounds of coal
• 432,180 metric tons for every million barrels of oil
• 53,440 metric tons for every million cubic feet of fuel gases

How the Assessments Would Be Determined

The New York law allows the first billion tons of CO2 emitted by any entity during the assessment period to be “free.” Subsequent amounts are subjected to the assessment.

The law specifies that the cost of climate adaptation projects will be in excess of $150 billion, and states that half of that amount, $75 billion, will be apportioned to the polluters based on their contribution to the amount of CO2 in excess of 1 billion tons that each emitted over the period.

The 38 companies, from 15 countries, that emitted more than 1 billion tons of CO2, together emitted 18,750 million tons in the period, and 147,750 million of them were in excess of one billion.

For example, here is ExxonMobil’s assessment

• ExxonMobil emitted 11,915 million tons and will be assessed for the 10,915 million over the first billion they emitted, or 7.39% of the total assessed emissions.
• Payments are to be made in annual installments equivalent to 4% of the total amount owed.
• ExxonMobil would therefore owe 7.39% of the $75B, or $5.55B, payable in $222M annual installments for 23 years after an 8% initial payment.

As usual, these bills are expected to be challenged in court by the affected oil companies.