New York Governor Kathy Hochul has ordered the largest fossil fuel companies deemed responsible for carbon emissions from 2000 to 2018 to contribute $3 billion annually to climate mitigation funds for the next 25 years. signed a new law mandating it. The law targets companies certified by the government as having emitted more than 1 billion tons of greenhouse gases. New York’s law, modeled after the federal Superfund law, holds companies accountable for toxic emissions and requires them to provide funding or directly carry out cleanup efforts at contaminated sites.
New York is the second state to introduce such legislation, following Vermont, which established a similar fund earlier this year. Critics argue that the measure would increase energy costs for consumers because it would impose punitive fees on fossil fuels, which supply about 80% of America’s energy needs. The law is expected to face legal challenges, particularly from the fossil fuel industry, which President-elect Trump continues to support politically. Despite decades of government incentives and state mandates, alternative energy sources have yet to significantly reduce fossil fuel consumption.
The funds raised will be allocated to a variety of climate-related projects, including updating water and wastewater systems, restoring coastal wetlands, improving building cooling systems, and repairing and adapting transportation infrastructure. But given the state’s aging infrastructure and history of underfunding maintenance, some critics argue that the law represents less of a backdoor tax on consumers than a genuine attempt to restructure public spending or stimulate economic growth. I see this as a possibility.
The impact of this law is significant and will impose an annual fee on domestic and foreign energy producers. Saudi Aramco is expected to face the highest bill at $640 million a year, followed by Mexico’s Pemex at $193 million a year. Russia’s Lukoil may be carrying about $100 million a year in debt. The 38 companies include European companies such as US giants Exxon, Chevron, Shell, BP, and Total Energy, as well as international companies such as Brazil’s Petrobras, Australia’s BHP, Switzerland’s Glencore, Norway’s Equinor, and Italy’s ENI. Included. Some critics are concerned about whether the government will be able to collect these fees from foreign companies.
Companies are expected to start putting money into the climate fund starting in 2028, giving state officials time to establish ways to identify and notify responsible companies. States will need to develop rules on how to identify responsible parties, notify companies of fines, and create a system for determining which infrastructure projects the fund will pay for.
On Dec. 5, more than 30 energy companies and business advocates sent a letter to Hochul asking him to veto the bill. The letter, co-signed by the Business Council, the American Petroleum Institute Northeast Region, national fuel and gas companies, and others, said: “This law is bad public policy that raises serious implementation questions and constitutional concerns. The $75 billion price tag will have unintended consequences and increased costs for households and businesses.”
According to state Sen. Liz Krueger, a co-sponsor of the bill, “For the past decade, courts have dismissed lawsuits against the oil and gas industry, saying the issue of climate change liability should be decided by Congress. There were many. Well, the world’s 10th. The New York State Legislature, the world’s largest economy, accepted this invitation. And I hope we have made it clear that the world’s biggest climate polluters are uniquely responsible for creating the climate crisis. And to help ordinary New Yorkers deal with the consequences, they must pay their fair share.”Senator Kruger also proposed that New York state secede from the United States and incorporate into Canada. I am doing it.
New York’s new law is part of a broader effort that will have significant economic implications for both commuters and consumers. These measures include Gov. Kathy Hochul’s congestion pricing plan for New York City and the Department of the Environment’s upcoming “cap-and-invest” rules. Together, these policies are expected to impose billions of dollars in additional costs associated with fossil fuel consumption, impacting a wide range of energy-dependent individuals and businesses.
New York City’s congestion pricing plan would impose a $9 toll on most vehicles entering the city. The aim is to generate funding for public transport, ease traffic congestion and reduce air pollution. Scheduled to begin in January, it will be the first time a U.S. city has implemented such a system. President-elect Donald Trump has been vocal in his opposition to the plan.
Meanwhile, the state’s “cap-and-invest” program, also known as cap-and-trade, would set steady decline limits on greenhouse gas emissions across the state. Certain groups will be required to purchase allowances to essentially pay for the right to emit carbon dioxide in New York. Proceeds from the sale of these allowances will go towards programs aimed at further reducing emissions. Like the new climate fund law, a “cap-and-invest” system would lead to higher energy costs for consumers, as companies would pass on the cost of purchasing emissions allowances.
Interestingly, New York’s new law aims to address climate change by targeting carbon emissions within the state, but does not take into account the role of international emitters. China remains the world’s largest emitter of carbon dioxide, and its emissions continue to rise. Despite the global nature of climate change, Governor Hochul’s “Superfund” law does not hold China or other foreign countries accountable for their contributions to the problem. This raises broader questions about the global impact of emissions and the fairness of imposing costs on local consumers when the problem is caused by global activities.
conclusion
New York Governor Hochul signed a bill creating a Climate Superfund in which major fossil fuel companies will pay $3 billion annually over 25 years into a fund that will be used for climate mitigation activities. This law will increase energy costs for consumers, but other New York laws, including the pending “cap-and-invest” program, are likely to increase costs as well. New York is the second state after Vermont to pass legislation creating a climate fund. Both state laws are expected to be challenged by affordable energy advocates.
