In New York, no past commercial activity is ever safe from political risk. Last week, Governor Kathy Hochul signed the Climate Change Superfund Act into law. Over the next 25 years, it will collect $3 billion annually from companies that, between 2000 and 2018, “engaged in the trade or business of extracting fossil fuel or refining crude oil.” About three dozen firms, foreign and domestic, whose lawful activities resulted in the emission of at least 1 billion tons of greenhouse gases (GHGs), will have to pay. The state will use the $75 billion collected to fund infrastructure projects—paying prevailing ( union ) wages—to mitigate and adapt to the effects of climate change. At least 35 percent of this spending will go to state-designated “ disadvantaged ” communities, injecting an element of poorly defined preferentialism that will reward Democratic-aligned interest groups. New York is following Vermont ’s lead in passing such legislation. On May 30, Granite State governor Phil Scott, a Republican, allowed the nation’s first “superfund” law to take effect without his signature. Like New York’s law, it mandates so-called compensatory payments from firms (or their successors) that produced fossil fuel or refined crude oil between 1995 and 2024 and resulted in 1 billion tons of GHG emissions. It allocates $300,000 to pay consultants to assess the cost to Vermont of GHGs, with payments going to a state fund used for climate-related infrastructure projects. Lawmakers in California, Maryland, and Massachusetts have proposed similar legislation. Despite their superficial resemblance to the Comprehensive Environmental Response, Compensation, and Liability Act ( CERCLA ), these state laws differ strikingly from that 1980 law. Unlike CERCLA, New York and Vermont aren’t going after businesses for abandoned waste sites, accidents, or illegal dumping. These firms were legally producing, processing, and distributing the fuels necessary to […]
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