New Law Seeks Compensation From Fossil Fuel Giants for Emissions

New York’s Governor Kathy Hochul signed a groundbreaking law requiring major fossil fuel companies to pay for greenhouse gas emissions, sparking both praise and criticism.

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 with high emission levels from 2000 to 2018.
Funds will support climate change mitigation projects and infrastructure improvements.
Critics argue the law is unworkable and likely to face legal challenges.

New York Takes Bold Action on Climate Change

Governor Kathy Hochul has signed the Climate Change Superfund Act into law, marking a significant shift in how New York addresses climate change. This legislation requires major fossil fuel companies to pay for their greenhouse gas emissions, with the collected funds earmarked for climate change mitigation projects. The law aims to raise $75 billion from oil, natural gas, and coal companies over the next 24 years to bolster the state’s infrastructure against climate-related risks.

The new law targets companies responsible for significant carbon emissions between 2000 and 2018. According to Governor Hochul, these energy companies are responsible for approximately 1 billion metric tons of greenhouse gas emissions in New York. The legislation is modeled after the federal Superfund law, which holds polluters accountable for toxic waste sites.

Financial Implications for Energy Companies

An analysis suggests that both foreign and American companies will be required to 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. This financial burden on energy companies has sparked controversy and debate.

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, likely to face legal challenges, and will ultimately increase costs for consumers.

Support and Opposition

Despite the criticism, the law has garnered support from climate change activists, including the Sierra Club and Environmental Advocates NY. Supporters argue that the legislation shifts the financial burden of climate adaptation from New Yorkers to the fossil fuel companies responsible for pollution.

However, the American Petroleum Institute has 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.

Implementation and Future Challenges

The law requires the state to establish regulations to identify liable parties and develop a fund allocation system before imposing penalties. Funds collected will support resiliency projects such as coastal protection and flood mitigation. The New York State Department of Environmental Conservation supports the law for holding polluters accountable and complementing state efforts to reduce emissions.

“Establishing the Climate Superfund is the latest example of my administration taking action to hold polluters responsible for the damage done to our environment and requiring major investments in infrastructure and other projects critical to protecting our communities and economy.” – Hochul

As New York positions itself at the forefront of holding polluters accountable, the law is expected to face legal challenges. The implementation of this groundbreaking legislation will be closely watched by other states and environmental advocates across the nation.