June 20, 2024

Vermont has become the first state to enact a law holding oil firms financially responsible for climate damages, after the Republican governor, Phil Scott, allowed it to pass without his signature late on Thursday.

Modeled after the Environmental Protection Agency’s Superfund program, the Climate Superfund Act directs the state to charge major fossil fuel companies potentially billions of dollars to pay for climate impacts to which their emissions have contributed. It is expected to face legal challenges from the industry.

Under the legislation, Vermont officials will have until January 2026 to assess the total costs to the state from greenhouse gases emitted between 1995 and 2024, including the impacts on public health, biodiversity and economic development. They will then use federal data to determine how much to charge individual polluters for those harms.

Climate advocates celebrated the passage of the law, which won supermajority support in the state legislature from Democrats and some Republicans.

“It’s not every day you get to be part of something that’s both historic and potentially game-changing for all the citizens of your state,” Ben Edgerly Walsh, an advocate at the Vermont Public Interest Research Group, said.

Supporters hope the bill can serve as a model for the rest of the country as Maryland, Massachusetts and New York are considering similar measures, and as federal lawmakers weigh proposals submitted by Senators Bernie Sanders and Chris Van Hollen.

Vermont is among the most quickly warming states in the US, and has been pummeled by climate disasters in recent years; last year, floods wreaked more than $1bn in damages. In a note to the state senate’s secretary on Thursday, Scott said he understood “the desire to seek funding to mitigate the effects of climate change that has hurt our state in so many ways”.

But though he allowed the bill to pass, the governor said he was concerned about the costs of the bill to his small state.

“Instead of coordinating with other states like New York and California, with far more abundant resources, Vermont – one of the least populated states with the lowest GDP in the country – has decided to recover costs associated with climate change on its own,” he wrote.

Edgerly Walsh, however, said the legislature took steps to accommodate those concerns, including by adding funding for state agencies to manage implementation. He said Vermont could not afford to pay the “absolutely enormous” costs of the climate crisis itself.

The American Petroleum Institute, the largest oil and gas lobby group in the US, sent a letter in March to Vermont lawmakers opposing the bill, claiming it “retroactively imposes costs and liability on prior activities that were legal” and “violates equal protection and due process rights by holding companies responsible for the actions of society at large”.

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Advocates say they are prepared for the court battles ahead.

“We know that big oil will fight this in the courts,” said Martin LaLonde, chair of the state’s house judiciary committee. “But, as an attorney myself, and having worked closely with many legal scholars in shaping the bill, I believe we have a solid legal case”

The law’s passage indicates an increased demand for climate accountability, said Cassidy DiPaola, spokesperson for the Make Polluters Pay campaign, which is backing climate superfund bills across the country.

“Vermont is just the beginning,” she said. “The tide is turning, and the fossil fuel industry’s reckoning is on the horizon.”

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