ARGUMENT: CORPORTE ACCOUNTBILITY FOR DISASTERS?More States Require Energy Companies to Pay for Damages Caused by Climate-Related Disasters
In recent years, several U.S. states have enacted laws to hold fossil fuel companies financially accountable for damages resulting from climate change. These actions reflect growing concerns about the connection between corporate practices, climate change, and disasters such as wildfires, hurricanes, and floods.
In recent years, several U.S. states have enacted laws to hold fossil fuel companies financially accountable for damages resulting from climate change. These actions reflect growing concerns about the connection between corporate practices, climate change, and disasters such as wildfires, hurricanes, and floods.
Notable examples include:
·Vermont’s Climate Superfund Law: In May 2024, Vermont became the first state to pass legislation requiring fossil fuel companies to contribute to the costs of damages caused by climate change. The law mandates the state treasurer, in consultation with the Agency of Natural Resources, to calculate the total cost of greenhouse gas emissions from 1 January 1995 to 31 December 2024. This assessment will inform the financial contributions required from energy companies to address climate-related damages.
·New York’s Climate Accountability Act: In December 2024, New York Governor Kathy Hochul signed a law imposing fines totaling $75 billion over the next 25 years on fossil fuel companies. These fines target oil, gas, and coal companies responsible for significant greenhouse gas emissions between 2000 and 2018. The funds collected will be allocated to climate change mitigation efforts and infrastructure adaptation within the state.
Proposed Legislation in Other States
Following the legislative actions in Vermont and New York, several other states are considering similar measures to hold fossil fuel companies financially accountable for climate-related damages. Notable developments include:
·New Jersey’s Proposed Climate Superfund:In December 2024, New Jersey advanced a bill to establish a Climate Superfund. This legislation aims to impose fees on fossil fuel producers operating within the state to finance climate change initiatives. The collected funds would be managed by the state Department of Environmental Protection and allocated to climate adaptation and resilience projects. The bill’s sponsor, Senator John McKeon, emphasized that this approach ensures polluters, rather than taxpayers, bear the costs of climate-related damages. While environmental groups support the bill for promoting corporate accountability, business sectors have expressed concerns about potential increases in fuel costs and constitutional vagueness. The bill requires approval from both state legislative houses before it can be enacted by Governor Phil Murphy.