During 2024, at least five states considered legislation to enact “Climate Superfund” laws targeting fossil fuel companies, applying “polluter pays” principles enshrined in the US federal Superfund law (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA of 1980) and its many state counterparts. At least two states enacted such laws – Vermont and New York. The rest of this note provides brief summaries of these laws.
Vermont Climate Superfund Act
In May 2024 the Vermont General Assembly (legislature) enacted the “Climate Superfund Act” (S 259), which Governor Philip Scott allowed to become law without his signature. The Act provides for a Climate Superfund Cost Recovery Program, to be administered by the Climate Action Office (CAO) within Vermont’s Agency of Natura Resources (ANR). The new Act’s purposes are defined as the following:
- to secure compensatory payments from responsible parties based on a standard of strict liability to provide a source of revenue for climate change adaptation projects within the State;
- to determine proportional liability of responsible parties;
- to impose cost recovery demands on responsible parties and issue notices of cost recovery demands;
- to accept and collect payment from responsible parties;
- to develop, adopt, implement, and update the Strategy that will identify and prioritize climate change adaptation projects; and
- to disperse funds to implement climate change adaptation projects identified in the Strategy.”
The Act follows CERCLA’s liability model by establishing “strict liability” for “responsible parties.” In the climate change context (contrasted with CERCLA’s focus on specific incidents of contamination), responsibility is defined by invoking proportional harm, as follows:
“With respect to each responsible party, the cost recovery demand shall be equal to an amount that bears the same ratio to the cost to the State of Vermont and its residents, as calculated by the State Treasurer …, from the emission of covered greenhouse gases during the covered period as the responsible party’s applicable share of covered greenhouse gas emissions bears to the aggregate applicable shares of covered greenhouse gas emissions resulting from the use of fossil fuels extracted or refined during the covered period.”
The Act provides general guidance to ANR for development of cost allocation methodologies to calculate “Cost Recovery Demands” on responsible parties, which are to pay into a new Climate Superfund Cost Recovery Program Fund. The Act defines how the Fund is to be managed, and provides categories of eligible expenditures.
ANR submitted a report to the General Assembly in January 2025, “detailing the feasibility and progress of carrying out the requirements” of the Act, including recommendations for improving the administration of the program. ANR is to develop a Resilience Implementation Strategy, and is authorized to promulgate rules as necessary to implement the program. ANR is to provide proposed rules for development of the Resilience Implementation Strategy July 1, 2025, and final rules by July 1, 2026. ANR is file other proposed rules for the program by July 1, 2026 and final rules by July 1, 2027. The Act also includes related administrative and audit provisions.
New York Climate Change Superfund Act
On December 26, 2024 New York Governor Kathy Hochul signed that state’s Climate Change Superfund Act (Legislation S.2129-B/A.3351-B). The Act is administered by the state Department of Environmental Conservation (DEC). According to legislative findings included in the Act, the state is suffering harm from climate change that is induced primarily by fossil fuel combustion, the sources and extent of this harm can be quantified and allocated, so that the state can apply existing “superfund”-type approaches to assign financial liabilities. Accordingly:
“The obligation to pay under the program is based on the fossil fuel companies' historic contribution to the buildup of greenhouse gases that is largely responsible for climate change. The program operates under a standard of strict liability; companies are required to pay into the fund because the use of their products caused the pollution. No finding of wrongdoing is required.”
Climate Change Adaptation Cost Recovery Program
The Act provides legal authority for DEC to adopt regulations and administer a “Climate Change Adaptation Cost Recovery Program,” with details enabling the Program to accomplish all of the following:
- secure compensatory payments from responsible parties based on a strict liability, to provide revenue for climate change adaptive infrastructure projects within New York
- determine proportional liability of responsible parties pursuant to the Act
- impose cost recovery demands on responsible parties and issue notices of cost recovery demands
- accept and collect payment from responsible parties
- identify climate change adaptive infrastructure projects
- disperse funds to climate change adaptive infrastructure projects
- allocate funds in such a way as to achieve a goal that at least 35% of program expenditures be on projects that benefit disadvantaged communities (as defined)
As the basis for cost recovery demands, the Act assigns the fossil fuel industry $75 billion in costs that the state attributes to climate change, and assigns DEC to identify responsible parties liable for emissions and costs, and to allocate costs and calculate resulting cost recovery demand amounts. DEC is to promulgate necessary regulations within one year (i.e., by December 26, 2025).
Now what?
These laws represent new efforts by states to assign and recovery costs resulting from climate change. They supplement a growing number of civil lawsuits seeking damages under public nuisance and related theories. They are highly controversial in political and judicial venues – in January the US Chamber of Commerce and American Petroleum Institute filed a joint lawsuit against the Vermont Act, alleging it violates Constitutional and statutory violations. It seems likely that state initiatives will proliferate, particularly since political changes in the US government are likely to engender massive changes in federal policies.
Self-Assessment Checklist
Does the organization produce, sell or use fossil fuels?
Does the organization conduct activities designed to address or mitigate climate change impacts?
If so, is the organization tracking state climate change “superfund” laws and other state initiatives that may affect its activities?
Where Can I Go For More Information?
- Vermont
- Vermont Agency of Natural Resources website
- ANR Climate Change in Vermont website
- New York
- Climate Change Superfund Act (Legislation S.2129-B/A.3351-B)
- California SB 1497
About the Author
Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 30 years.
Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).
Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).
You may contact Mr. Elliott directly at: tei@ix.netcom.com