Superfund Redux: States Are Turning to Climate Superfund Acts to Fill Budgetary Gaps

Having worked on virtually every aspect of Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) since it was enacted by Congress in 1980, I have been watching the recent emergence of state climate change Superfund acts with great interest.

States are starting to incur substantial costs to address climate impacts – costs that will continue to increase for years to come - and are looking for ways to cover those costs.  States are increasingly turning to their legislatures to enact laws to recoup those costs from the fossil fuel industry – relief that has not been forthcoming in the growing number of climate lawsuits brought by State governmental entities.

This year, at least five states have considered legislation patterned after the federal Superfund strict liability “polluter pays” approach: Maryland, Massachusetts, New York, California and Vermont. While each proposed law has its own nuances, they all focus on harms allegedly caused by past greenhouse gas (GHG) pollution that are attributed to larger fossil fuel companies, and seek to recover billions of dollars that are to be earmarked in different ways for the states to mitigate and remediate climate harms.

New York and Vermont have jumped ahead of other states on this path when their legislatures approved climate Superfund type laws. This is the second consecutive year the New York Senate on May 7 approved the Climate Change Superfund Act, and it now goes to the state’s Assembly. The law would establish a climate change adaptation cost recovery program that would be funded by $75 million, collected at the rate of $3 million annually for 25 years from fossil fuel companies. The funds would be invested in infrastructure to adapt to the impacts of climate change. At least 35 percent of the funds would be invested in disadvantaged communities disproportionately affected by climate change.

Vermont’s Climate Superfund Act passed on May 10 and is sitting on Gov. Phil Scott’s desk. It would also require large fossil fuel companies to pay for climate damage. Instead of mandating fixed assessments, however, the amount to be charged to each emitter would be determined by the state treasurer, and would be in proportion to each companies’ share of global GHG emissions from 2000-2019. Those shares would be applied to the costs incurred by Vermont to address climate impacts.

The funds collected would be used for climate adaptation and resiliency projects to be determined by the Vermont Agency of Natural Resources. The act was approved by substantial majorities in both the House and Senate after the state incurred record flooding last year, and is expected to be signed into law shortly.

It is anticipated that the fossil fuel industry will vigorously oppose these climate Superfund laws as unconstitutional retroactive taxes. Paralleling the arguments made in the pending state climate cases, the industry also will likely assert that insofar as these state laws seek to regulate interstate GHG emissions, they are preempted by the federal Clean Air Act and beyond the scope of individual States’ authority. The industry is also expected to argue that the liability is being selectively imposed and disproportionate to the harm allegedly caused by each entity (if the individual nexus to such harm can be shown at all).

All that being said, the federal Superfund may not be the best role model for states seeking to fill budgetary and funding gaps to cover the costs of responding to climate change. Since its enactment, courts and commentators have criticized CERCLA as a whole as being poorly drafted. In 1986, the U.S. Supreme Court noted in Exxon Corp. v. Hunt that CERCLA is “not a model of legislative draftsmanship” and is “at best inartful and at worst redundant.”

Climate change is a new paradigm that poses a potentially existential challenge to mankind. There has to be a better answer than Superfund.

• RELATED TOPICS
• Environmental Social and Governance (ESG)
• Climate Change
• Superfund