Vermont on Thursday passed a law that would require major fossil fuel companies to pay for damage caused by climate change, becoming the first state in the nation to do so.
Vermont Gov. Phil Scott said that he allowed the Climate Superfund Act to become law without his signature, although he expressed “deep concern” about the law’s short- and long-term outcomes.
“Taking on ‘Big Oil’ should not be taken lightly,” the governor said in a letter to the state’s General Assembly.
“And with just $600,000 appropriated by the Legislature to complete an analysis that will need to withstand intense legal scrutiny from a well-funded defense, we are not positioning ourselves for success,” he added.
Mr. Scott said he was “fearful” that failing in legal challenge “will set precedent and hamper other states’ ability to recover damages,” but that there is a need for funding to address the effects of climate change on the state.
“I’m also comforted by the fact that the Agency of Natural Resources is required to report back to the Legislature in January 2025 on the feasibility of this effort, so we can reassess our go-it-alone approach,” he stated.
According to the legislation, “an entity would only be assessed a cost recovery demand if the [Natural Resources Agency] determined that the entity’s products were responsible for more than one billion metric tons of covered greenhouse gas emissions.”
“Any cost recovery payments received by the Agency would be deposited into the Climate Superfund Cost Recovery Program Fund to provide funding for climate change adaptive or resilience infrastructure projects in the State,” it stated.
Lauren Hierl, executive director of Vermont Conservation Voters, praised Vermont legislators for passing the bill, saying that it would prevent taxpayers from bearing the entire climate change burden.
“Without the Climate Superfund, the costs of climate change fall entirely on taxpayers – and that’s not fair. Now, there is a law in place to require the corporations that caused the damage to pay, too,” she said in a statement released by the Vermont Natural Resources Council.
State Rep. Martin LaLonde, chair of the House Judiciary Committee and an attorney, said the state has “a solid legal case” as legislators worked closely with legal scholars in shaping the bill.
“We know that Big Oil will fight this in the courts,” Mr. LaLonde said.
Concerns About the Legislation
In April, the American Petroleum Institute (API) sent a letter to the Vermont House Judiciary, opposing the legislation as a “bad public policy” and suggesting that it “may be unconstitutional.”API said it was concerned that the bill “retroactively imposes costs and liability on prior activities that were legal, violates equal protection and due process rights by holding companies responsible for the actions of society at large; and is preempted by federal law.”
“Additionally, the bill does not provide potentially impacted parties with notice as to the magnitude of potential fees that can result from its passage,” it stated in the letter.
The World Health Organization (WHO) claimed in a press release last October that human behavior has increased carbon emissions, causing a change in the weather that “is directly contributing to humanitarian emergencies from heatwaves, wildfires, floods, tropical storms, and hurricanes and they are increasing in scale, frequency, and intensity.”
The WHO said research “shows that 3.6 billion people already live in areas highly susceptible to climate change. Between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year, from undernutrition, malaria, diarrhea and heat stress alone.”
