Vermont Becomes First State to Make Oil Companies Pay for Climate Change Damage After Republican Governor Fails to Veto Bill

Vermont has become the first state to enact a law requiring fossil fuel companies to pay a portion of damages caused by climate change after the state suffered catastrophic summer flooding and other damage. extreme weather conditions.

Republican Gov. Phil Scott allowed the bill to become law without his signature Thursday night, saying he is very concerned about the costs and the outcome of the small state going it alone against “Big Oil” in what will likely be a grueling legal fight. But he acknowledged that he understands that something must be done to address the cost of climate change.

“I understand the desire to seek funding to mitigate the effects of climate change that has harmed our state in so many ways,” Scott, a moderate Republican in the largely blue state of Vermont, wrote in a letter to lawmakers.

The popular governor, who recently announced he will run for reelection to a fifth two-year term, has been at odds with the Democratic-controlled Legislature, which he has called unbalanced. Environmental advocates expected him to veto the bill, but he later allowed it to pass. Scott wrote to lawmakers that he was comforted that the Natural Resources Agency is required to report to the Legislature on the feasibility of the effort.

Flooding caused by torrential rains last July inundated Vermont’s capital city of Montpelier, the nearby town of Barre, some southern Vermont communities, and destroyed homes and washed away roads around the rural state. Some saw it as the worst natural disaster to hit the state since a 1927 flood that killed dozens of people and caused widespread destruction. Businesses, from restaurants to stores, took months to rebuild, losing their summer and even fall seasons. Several have recently reopened, while dozens of homeowners were left with flood-ravaged homes heading into the cold season.

Under the legislation, the Vermont State Treasurer, in consultation with the Natural Resources Agency, would provide a report by January 15, 2026 on the total cost to Vermonters and the state of greenhouse gas emissions. from January 1, 1995, until December 31, 2024. The evaluation would analyze the effects on public health, natural resources, agriculture, economic development, housing and other areas. The state would use federal data to determine the amount of covered greenhouse gas emissions attributed to a fossil fuel company.

It is a “polluter pays” model that affects companies engaged in the trade or business of fossil fuel extraction or crude oil refining, attributable to more than one billion metric tons of greenhouse gas emissions during the period. The state could use the funds for things such as improving stormwater drainage systems; improvement of roads, bridges and railways; relocate, elevate or modernize wastewater treatment plants; and make energy-efficient air conditioning improvements in public and private buildings. It is modeled after the federal Superfund pollution cleanup program.

“For too long, giant fossil fuel companies have knowingly lit the match of climate disruption without doing anything to put out the fire,” Paul Burns, executive director of the Vermont Public Interest Research Group, said in a statement. “Finally, perhaps for the first time anywhere, Vermont will hold the companies most responsible for climate-caused floods, fires and heat waves financially accountable for a fair share of the damage they have caused.”

Maryland, Massachusetts and New York are considering similar measures.

The American Petroleum Institute, the oil and gas industry’s main lobbying group, has said it is extremely concerned that the legislation “retroactively imposes costs and liability on prior activities that were legal, violates equal protection and human rights.” of due process by holding companies accountable for their actions. of society in general; and is preempted by federal law.”

“This new punitive tariff represents yet another step in a coordinated campaign to undermine America’s energy advantage and the economic and national security benefits it provides,” spokesman Scott Lauermann said in a statement Friday.

Vermont lawmakers know the state will face legal challenges, but the governor worries about the costs and what it will mean for other states if Vermont fails.

State Rep. Martin LaLonde, a Democrat and attorney, believes Vermont has a strong legal case. Lawmakers worked closely with many jurists in crafting the bill, he said in a statement.

“The bottom line is that the stakes are too high – and the costs too high for Vermonters – to release the corporations that caused the mess from their obligation to help clean it up,” he said.

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