Krueger, Dinowitz Introduce Nation-Leading Climate Change Superfund Act
Legislation will charge the largest fossil fuel companies for New York's climate adaptation costs while insulating consumers
Albany – Today Assemblyman Jeffrey Dinowitz, Chair of the Assembly Codes Committee, and State Senator Liz Krueger, Chair of the Senate Finance Committee, along with environmental advocates and experts, announced the introduction of the Climate Change Superfund Act (S.9417).
In light of the billions of dollars in damages that New York State has suffered as a result of climate change, and the tens of billions more to come in future decades, this first-in-the-nation legislation will use the polluter-pays model exemplified by existing federal and state superfund laws to collect $30 billion over ten years for climate change adaptation from the parties most responsible for causing the climate crisis - fossil fuel companies.
Right now consumers are facing pain at the pump as well as in their gas and electric bills. At the same time, the oil and gas industry is raking in enormous profits. The Climate Change Superfund Act will claw back some of the oil and gas industry's recent windfall profits and use them for adaptation costs that would otherwise be charged to state taxpayers. The program is designed to prevent such costs from being passed on to consumers.
"The climate crisis is here, right now, and it's already causing billions of dollars in damage and a growing death toll in New York State," said Senator Krueger. "We must begin to make the investments necessary not only to mitigate future climate change, but to adapt to and defend ourselves from the damage that's already been done. The cost of inaction is inconceivable - in money, in lives, and in countless other ways. Nonetheless, there will be a large price-tag to the work we have to do, and it's only fair that the companies who made the mess should pay for cleaning it up. The Climate Change Superfund Act is one critical piece of the puzzle of funding our state's response to the climate emergency."
"The damage done to our climate and to our communities from decades of corporate disregard for scientific evidence is irreparable and omnipresent," said Assemblyman Dinowitz. "As we continue to take big steps towards a green future in order to mitigate the worst potential impacts from climate change, the Climate Change Superfund Act would be a vital resource to invest in adaptive and resilient infrastructure, and it is common sense to charge those who did the most damage to our climate for the costs of keeping people alive amidst our new climate reality."
“The climate crisis is a global emergency that is taking a devastating toll locally, and we know who bears responsibility: the fossil fuel industry whose business model directly results in catastrophic levels of greenhouse gas emissions that threaten the habitability of our planet. We see this as more frequent and extreme weather events destroy lives and livelihoods, such as Hurricane Ida. We see it with chronic flooding that strains our water infrastructure and extreme heat that exacerbates energy poverty and endangers our community members. It’s long overdue for the fossil fuel companies to pay for the damage they’ve caused our communities, particularly to Black and brown communities. New York is leading the way with the Climate Change Superfund Act,” said Rep. Jamaal Bowman. “In Congress, I worked with my Democratic colleagues to advance a similar assessment of past greenhouse gas emissions by fossil fuel companies in Build Back Better, and as the most recent Intergovernmental Panel on Climate Change (IPCC) report shows, we need bold action urgently. FEMA and other disaster relief can only do so much - we need long term solutions that face the climate crisis head on, and holding the fossil fuel industry accountable for their corporate greed is a necessary part of that work."
New Yorkers are already experiencing significant impacts from the climate crisis – deadly superstorms, heatwaves, flooding, toxic algal blooms, extreme weather of all kinds, and billions of dollars in damage to property and critical infrastructure. According to one recent study, by the middle of this century, the damage caused by climate change could cost New York State nearly $10 billion dollars every year.
The Climate Change Superfund Act is grounded in the well-established polluter-pays principle exemplified in New York's Hazardous Waste Site Remediation Program, known as the state superfund law, and the state Oil Spill Cleanup Fund, and applies it to the greenhouse gas emissions that have destabilized the climate. The biggest historical producers of fossil fuels will be charged a share of the costs necessary for New York State to adapt to climate change. The money raised through the climate superfund will be used to fund infrastructure projects within the state that are necessary to adapt to baked-in climate change by, for example, repairing damage from extreme weather events or upgrading coastal infrastructure.
Like the existing state superfund program and the Oil Spill Cleanup Fund, polluters would be strictly liable for damages under the Climate Change Superfund Act. No showing of fault or negligence is required. The program is remedial in nature, seeking compensation for damages resulting from the past actions of polluters. The bill would require that the fossil fuel companies help pay for a portion of the cost of necessary climate change-adaptive infrastructure based on their individual shares of total greenhouse gas emissions beginning in the year 2000.
The total claim assessed against the fossil fuel industry as a whole would be $30 billion, payable over ten years. To put that in perspective, Gazprom, the Russian fossil fuel company, made $29 billion in profits last year alone. ExxonMobil made nearly $6 billion in profits in just the first quarter of this year.
Two factors make it possible for the state to determine the proportionate responsibility that individual companies bear for historical greenhouse gas emissions. First, based on the research of Dr. Richard Heede, it is now possible to use company records to determine the amount of product put into the marketplace by each large fossil fuel company and to translate that into an amount of greenhouse gas emitted into the atmosphere. The formula for doing so is specifically written into the bill language. Second, because the concentration of greenhouse gases in the atmosphere is roughly constant everywhere on the planet, if a particular company is responsible for X% of global historical greenhouse gas emissions, that percentage is the same at any location on Earth.
Because the assessments are sunk costs that do not affect the marginal cost of the product being sold, textbook economics says that the cost will generally not be passed on to consumers. In addition, because companies will not be paying the same assessment amount, there will be market pressure preventing companies with larger assessments from charging more for their product when competing against companies that faced smaller assessments.
The program would be administered by DEC, which would issue the assessments to responsible companies and collect payments. Funds would be dispersed to qualifying climate change adaptive infrastructure projects, which are defined as projects designed to avoid, moderate, or repair damage caused by climate change. These would include, for example, storm water drainage systems, coastal wetlands restoration, defensive upgrades to roads, bridges, and subways, air conditioning and other upgrades to schools and public buildings, as well as projects to adapt to damage to agricultural land or fisheries.
In line with the requirements of the CLCPA, at least 35% of expenditures will go to projects that directly benefit disadvantaged communities.
Blair Horner, Executive Director, NYPIRG, said: "The burning of oil and gas has stuck New York – and the world – with billions of dollars of costs to adapt to the worsening climate. Now, those same companies are raking in enormous profits, while New Yorkers are getting stuck again – with skyrocketing energy costs. This innovative legislation will force the oil and gas industries to pick up at least some of the state's financial tab triggered by global warming and will do so in a manner that protects consumers. NYPIRG applauds Senator Krueger's and Assemblymember Dinowitz's Climate Change Superfund and urges Governor Hochul and state lawmakers to support it."
Peter M. Iwanowicz, Executive Director, Environmental Advocates NY, said: “In order to be successful, New York must employ a comprehensive approach to fighting climate change. Much like tobacco companies and opioid producers have been made to pay for the damage they have wrought, we must hold polluters accountable for the harm they have done while continuing to advance efforts to prevent future harm. This bill is innovative, timely, and ultimately necessary if we are serious about addressing the impacts of climate change.”
Roger Downs, Conservation Director, Sierra Club Atlantic Chapter, said: “Fossil fuel companies for decades have helped plunge our planet into the climate crisis, and during times of global economic unrest have reaped excessive profits while the world endures increasingly severe storms, floods, droughts, heatwaves, mass extinctions and public health emergencies. New York state is struggling to finance the transition to a zero emissions society and repair the damage caused by climatic shifts and sea level rise - and the communities that have contributed the least to climate change now bear the economic burden of its worst impacts. The Sierra Club applauds Senator Krueger and Assemblymember Dinowitz for recognizing the need for a robust polluter penalty and the creation of a climate fund that can turn these ill-gotten fossil fuel windfalls into a vehicle for climate justice.”
Richard Schrader, NY Legislative and Policy Director, NRDC (Natural Resources Defense Council), said: "The effects of climate change are threatening our health, our communities, our economy, and our future. This bill ensures that New York's frontline communities are able to become more resilient against the impacts of climate change. Fossil fuel companies continue to try to undermine the state’s landmark climate law, the Climate Leadership and Community Protection Act, which set a goal of 40% carbon emission reduction by 2030."
Dr. Frederick Kowal, President, United University Professions, said: “The Climate Emergency is real and has impacted under-resourced communities of color severely. To address this environmental injustice, we must look to fossil fuel companies who for decades polluted with impunity and continue to exacerbate the ecological emergency we find ourselves in today. The Climate Change Superfund Act proposed by Sen. Krueger and Assemblyman Dinowitz forces fossil fuel conglomerates—who have raked in enormous profits while causing extensive climate damage—to pay up for the damage they’ve caused. This legislation protects all New Yorkers, especially those communities who have been impacted most by climate change. United University Professions urges Governor Hochul and state legislators to support this important bill.”
This groundbreaking legislation has already stimulated interest from environmental activists beyond New York:
Mike Tidwell, Director, Chesapeake Climate Action Network, said: "Finally! This New York State bill forces polluters to pay for climate damages. It also points the way for other states. Climate change affects us all -- and the polluters should pay everywhere. My state of Maryland is paying attention and eager to follow. Same with D.C. and other Mid-Atlantic states."Alan Palm, 350 Mass, said: “The impacts of unchecked climate change will cost our Commonwealth tens of billions of dollars and cause incalculable harm for the communities who are, and will continue to be most impacted—threatening homes, health, and lives. Those who are most responsible for causing the problem should pay some of the costs. We intend to introduce legislation that would empower our state government to hold those corporations who have contributed the most to climate change financially accountable”