Republished with permission from The New Lede, by Dana Drugmand

Vermont has enacted a first-in-the-nation law that holds major fossil fuel companies financially responsible for the climate pollution associated with their products, a move applauded by environmental advocates.

Following passage by the legislature earlier this month, Vermont Gov. Phil Scott allowed the bill to become law on Thursday without his signature. He cited several concerns in a letter to the state senate secretary, warning that “Taking on Big Oil should not be taken lightly.”

The measure, dubbed the Climate Superfund Act, aims to recover climate-related costs incurred by the state from large oil and gas companies whose production of carbon-based fuels ultimately resulted in over a billion metric tons of atmospheric greenhouse gas emissions between 1995 and 2024 – pollution that is wreaking havoc on communities across the country in the form of deadly heat waves, catastrophic flooding and storms, and other extreme weather events.

Vermont experienced its worst flooding in nearly a century last summer when heavy rains caused rivers to overflow their banks, wiping out floodplain crops, washing out roads and bridges, and damaging homes and small businesses throughout the state.

“In order to remedy the problems caused by washed out roads and houses, downed electrical wires, damaged crops, and repeated flooding, the largest fossil fuel entities that have contributed to climate change should also have to contribute to fixing the problem they caused,” Vermont state representative Amy Sheldon of Middlebury said from the House floor on May 3.

In passing the new law, Vermont is taking the first step in shifting some of the cost burden of responding and adapting to such climate-related disasters from taxpayers and onto the corporate polluters whose products are driving climate breakdown, according to environmental advocacy groups.

“The ‘polluter pays’ principle is the bedrock of the environmental movement,” said Johanna Miller, energy and climate program director at the Vermont Natural Resources Council. “With the enactment of the Climate Superfund Act, Vermont is demonstrating that it values Vermonters and their pocketbooks over Big Oil profits.”

The American Petroleum Institute criticized the law as a detriment to US economic and national security needs.

“This punitive new fee represents yet another step in a coordinated campaign to undermine America’s energy advantage and the economic and national security benefits it provides,” API spokesman Scott Lauermann said. “Rather than work collaboratively with the industry to further our shared goal for a lower carbon future, state lawmakers opted to pass a bill designed by activists to further their own interests.”

The legislation is modeled on the federal Superfund program, which has helped to remediate, at polluters’ expense, over a thousand toxic waste sites across the US (to varying degrees of success). As is the case with the federal Superfund law, Vermont’s Climate Superfund Act imposes strict liability on responsible parties. This is the first time, however, that such liability will be extended to large fossil fuel producers for their role in contributing to climate pollution.

“It marks a new era in efforts to hold fossil fuel companies accountable through legislation as opposed to just through lawsuits,” said Elena Mihaly, an environmental attorney and vice president of Conservation Law Foundation’s Vermont office.

More than two dozen municipalities and a handful of states including Vermont have sued major fossil fuel entities over climate damages and/or misleading consumers about the climate risks of fossil fuels and about their role in solving the climate change problem. Those lawsuits are slowly winding their way through the courts.

Vermont is expected to face litigation from the fossil fuel industry over the law, said Patrick Parenteau, professor of law emeritus and senior fellow for climate policy at Vermont Law and Graduate School’s Environmental Law Center.

ExxonMobil or another major oil company is likely to “drag the state into enormous litigation, very expensive litigation,” he said.

Gov. Scott cited litigation as a concern in his letter to the state senate, and said he was concerned that if the state fails to survive a legal challenge, it will “set precedent and hamper other states’ ability to recover damages.”

Vermont state representative Martin LaLonde of South Burlington said in a statement that legislators know litigation is likely but believe they have solid legal standing.

Despite the concerns about litigation, proponents said the law is a much-needed move.

“It is a monumental step in the right direction to Vermont having some chance of getting significant dollars from the fossil fuel industry to help pay for the changes we know we need to make to ensure our state is safer and more resilient in the face of the climate crisis,” Mihaly said.

Parenteau agreed, saying that “what Vermont is doing is necessary” given how dire the climate crisis has become. “We’re going to have to try things that are bold, novel, unproven,” he said, “because we’re facing disaster.”