The planet is burning, and lawmakers in a half-dozen states believe that it’s time for those responsible for turning up the heat to pay up.
New Jersey is one of them. Led by Sen. John McKeon (D-Essex), our Legislature will debate a bill in the next term that would make fossil fuel companies help pay for damages related to climate change.
It would be a paradigm shift in environmental liability – much like our existing Superfund law, which is based on the Polluter Pays Principle – and it would establish a formula to track how much the polluter should pay for cleanup, mitigation, and the strengthening of our infrastructure.
Vermont got the movement started with a Climate Superfund Act that went into effect July 1. That law, which is being challenged in court, imposes strict liability on extractors and refiners that produced 1 billion metric tons or more of greenhouse gas emissions from 1995 to 2024.
McKeon’s argument is similar: Storms continue to slam our state, hurricanes and floods are now common, and sea levels are rising. And since all that is related to climate change, Big Oil should pitch in. The author of New York’s law – the venerable state senator Liz Krueger – sees it like this: “This isn’t about crime and punishment,” she said. “It’s about cause and effect.”
Whether these bills will hold up against litigation, however, is another matter. We spoke with McKeon last week.
Q. Can you quantify the cost of climate change on our state, and how much it will swell in the coming years?
A. Actually, we’re all searching for a number, and some of the foremost experts in the state weren’t able to be helpful. But to be conservative, it’s multiple billions, relative to property loss. And the need for resiliency to mitigate the loss that is inevitable, based upon the changing weather patterns.
Q. You mean multiple billions annually?
A. For certain. New York just did a bond referendum for $4.5 billion that’s earmarked toward resiliency, and that goes hand in hand with the law that Gov. Hochul could sign soon – a law that will bring them $3 billion a year from 36 companies for 25 years.
Q. So this is going to be the hottest summer on record, but how do we hold oil companies accountable for that, when it’s a global problem?
A. Well, it is global, but we’re dealing with a specific time period, starting in 1995 – the first year of the UN meetings on climate change. The companies responsible for the 1 billion metric tons of carbon since that date will contribute to the damage incurred since then. We’re giving them a pass for everything up to 1995.
In terms of accountability, I’d equate it to the tobacco industry knowing the hazards of smoke to human health. By 1995 – unless they had their heads in the sand, which they didn’t – the fossil fuel companies knew the repercussions of what they continue to do, and made record profits off this, as they still do every year. We’re asking them to mitigate the damage.
Q. That’s an interesting distinction: The bill seeks payback for the damage, not for the deception. On the other hand, the lawsuit filed by our state in 2022 against five oil companies charges them with making false claims and for “systematically concealing and denying knowledge” of a future catastrophic impact.
A. Right, it’s not about deception, which is why we didn’t go deeper than 1995. The point is, they sure knew by then. So we’re actually giving them the benefit of doubt that they didn’t recognize the profound damage that burning fossil fuels would create. But once they certainly knew, they continued to produce and to profit at record levels. That’s the distinction.
We mentioned tobacco, but it’s more about the NRD (Natural Resource Damage) laws regarding toxic waste sites. Not all of the companies knew what they had produced a century ago, when they were refining oil off of the coast of Bayonne, and nobody knew the damage it caused. So this is more equitable in my view: We’re picking a date when any reasonable entity would have known the consequences of what they were doing.
Q. So if this is modeled on the Superfund law, how do we decide who pays what?
A. It will be a calculation made by regulators. Again, there’s the threshold of the 1 billion metric tons before they would be required to pay. The working number is 36 companies -- that was the number in New York, and the number of oil companies with business connections to New Jersey will be similar. And if there happens to be a producer that’s never touches a New Jersey market, they would be exempted.
But given the way companies are all structured, those will be rare. If they have contacts in New Jersey, then the regulators will make it proportionate. Some companies might have had 4 billion tons during that time frame, whereas others might just get over the billion. So they’ll pay the portion based upon that sum.
Q. Are you concerned that these companies will pass the cost on to the consumer? How can you protect consumers from bearing the burden here?
A. Well, the money has to come from somewhere, because we can’t continue like this. There is just too much expensive work needed on our bridges, our railroads, our infrastructure, for coastal wetland restoration, for stormwater discharge programs. That money must be spent one way or the other. No doubt, the oil companies will argue that you and I consume fossil fuel and bear some responsibility or blame the motorist or power plants for using their products. That’s the argument they use in court.
Q. But are they entirely wrong? It’s true that we have known since 2016 about those infamous 1977 Exxon memos that predicted the climate catastrophes by mid-century, but we never passed any legislation to deal with it. So aren’t we liable?
A. I don’t know if that’s a fair argument. We’re dealing with publicly traded, for-profit companies that have been making billions for decades, knowing that the byproduct was going to bring cataclysmic change that we’re only now starting to realize. So it’s time for them to help – in the same way we’ve held other polluters for the consequences of their industry. In a sense, we’re all responsible.
Do I share the theoretical frustration of government not having done more sooner? I absolutely do; that’s a valid criticism. But that’s not a shield from them being held responsible. Because given the profits they’ve generated, they weren’t going to say, “Well, you should have stopped us.”
Q. So what is your level of confidence this law will hold up, once Big Oil takes the state to court? And didn’t your chances just get diminished by the Chevron decision, which will likely leave this verdict up to judges and not environmental experts?
A. True. I once had great confidence that our assault weapons ban would never be reversed here in our state, and I was shocked when I saw that opinion (that the ban is unconstitutional) by the District Court. I’m more angry about that than anything else right now. So I can’t predict with reasonable certainty -- especially in this climate, no pun intended -- what the courts will do. But as a legislator, let’s not let potential court rulings be a barrier of addressing policy. Otherwise, we’d never get anything done.
Obviously, this should be done on a federal level, but as piecemeal as it might be, states need to fall in line and make this a priority. New Jersey will be heard. And it’s no coincidence that Massachusetts, California, Maryland, and so many others are following this model.
Q. It seems like an all-or-nothing bet: Oil companies are making windfall profits, and it’s unclear that they take climate change seriously. Which means they may never have an incentive to help fund infrastructure resilience projects.
A. Why would they? To the extent that they’re diversifying to some component of clean energy, that’s mostly so they can continue the party, until it gets to the point where that type of energy is depleted or it’s so bad that the government has to ban it to prevent further damage. So right now, they’re making everything they can as long as they can.
Q. So what’s the timetable on this bill?
A. As soon as we’re back in session we’re going to drop it. Senator Bob Smith talked about it a little bit today in committee, and Bob is going to be the prime co-sponsor. I know we’re going to get it out of Senate Environment. I would think the Assembly will have an appetite for it. Then it depends on the good guys versus the bad guys, if the moneyed interests will outweigh the urgency to do something. But I’m optimistic that Democratic leadership in both houses will get it to the governor’s desk before the end of his term.
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