Vermont Is Making Big Oil Pay for Climate Damage. Other States Should Too
The small town where I live, along the spine of the Green Mountains of Vermont, was a water world last summer. Endless days of rain, the most in our history, washed out the roads east and west out of town. We lost one house to a landslide, but we were comparatively blessed, because water flows downhill. It was in the valleys where the flooding was worst; the river through the center of the capital city of Montpelier swelled to the point where almost every downtown business was inundated. Three people died, and the damage was immense.
Which helps explain why, last week, Vermont’s Democratic legislature passed, and its Republican governor agreed not to veto, the nation’s first “climate superfund” law. Backed by climate activists led by Vermont’s Public Interest Research Group (VPIRG), it will essentially send a bill for climate damage off to Big Oil, dividing up the damages based on each company’s share of the market. Vermont Gov. Phil Scott (R), among other things a champion stock car driver at Vermont’s only paved track, has vetoed most other efforts to help with the climate crisis, and when he discussed the new law he was cautious about Vermont’s chances with the inevitable lawsuits from the oil companies. But he’s also cautious about his voters — and allowed the bill to become law without his signature. “I understand the desire to seek funding to mitigate the effects of climate change that has hurt our state in so many ways,” Scott said.
This, when you get to it, is the heart of the legislation (which could be adopted in coming weeks as well by states like New York and California, though a frightened oil industry is pulling out the stops to prevent that). Here are the two basic facts: One, the fossil fuel industry sold a product that caused enormous harm, with carbon dioxide guaranteeing fires, floods, and storms. And two, the industry was well aware of that fact when it sold most of that coal, gas, and oil. We have deep documentation of the work that scientists at companies like Exxon did to understand global warming in the 1970s and 1980s, evidence that executives then obfuscated or ignored in their efforts to keep their business model intact.
So, now that the inevitable reckoning has come, who should have to pay for, say, rebuilding Route 125 out of my small town? The taxpayers of Vermont, or the shareholders of ExxonMobil, who enjoyed years of record profits as their company misled the public about the dangers of climate change? As the Los Angeles Times recently said in a stinging editorial board column demanding that California pass a similar law, it’s time for oil companies to “to sacrifice some of their huge profits to clean up the environmental mess they helped create … It’s not fair for taxpayers to shoulder such a staggering burden.”
Fair, of course, is relative. If we were really doing this fairly, Exxon’s profits would be disgorged to Bangladeshis and Pakistanis, who have suffered far more than Vermonters, and enjoyed almost none of the benefits that also come with fossil fuels. (A few weeks after Vermont’s epic rains finally ended, a record rainfall in Libya drowned as many as 10 thousand people). But the world has no judiciary that could enforce such a claim, and it will be a massive undertaking to get it through America’s judiciary.
That task would be easier, of course, if Vermont’s tiny legal department was joined by, say, neighboring New York, whose attorney general has been willing to go toe-to-toe with all kinds of adversaries. New Yorkers fared almost as badly in the storms last summer that drenched Vermont; West Point alone may have had $100 million in damages. And there have been a steady string of other such climate disasters, from Hurricane Sandy onward, which is why there’s widespread support in the state for such a law — and why the state Senate has passed the legislation.
That support, however, has yet to persuade Assembly Speaker Carl Heastie (D) or New York Gov. Kathy Hochul (D), and some have suggested reasons for their reluctance. As The Lever reported, “John Hess, CEO of New York-based oil and gas giant Hess Corporation, and his wife donated more than $100,000 to Hochul in the 2022 election cycle. Hess would be required to pay $600,000 annually to the state if the climate superfund legislation is enacted, according to a Senate memo with preliminary estimates.” Under the proposal, The Lever reported, Saudi Aramco would pay the state an estimated $644 million annually, a tiny fraction of the Saudi Arabia-owned company’s profits, which reached a historic $161 billion in 2022. ExxonMobil, which recorded a $36 billion profit last year, would be responsible for $222 million a year in payments.
There’s not some other source for those funds, and rebuilding roads is not really an optional task — it was almost the first function of state governments. So either everyone in New York gets to pay, or the companies get to pay. And it’s not as if they can pass the expense back to customers, as the price of oil is set on world markets. Exxon can’t add a surtax for New Yorkers.
The local chapter of Third Act, a nationwide group I founded to organize older Americans for progressive change, has been fighting for the New York law — but much of the passion has also come from young activists, who staged a die-in in Albany earlier this legislative session.
Here’s Keanu Arpels-Josiah, a high school student in Manhattan, writing to Hochul on behalf of the youth-oriented Sunrise Movement: “We learn as kids if you break it, you fix it. Fossil fuel companies are not fixing the tremendous problems caused by the climate crisis. This is unacceptable. It’s high time that you listen to your constituents, our generation, and our communities, over fossil fuel interests, and stop blocking climate action in New York State. Our futures are on the line.”
The climate fight is so huge that no one set of actions by themselves can tip the balance. But there are now scores of lawsuits against Big Oil for climate damages, and a vast divestment campaign urging shareholders to sell their stock. The Biden administration has put the industry under enough pressure that Donald Trump offered to sell Big Oil his services for $1 billion, and many of its leaders are now funding his campaign. If climate superfund laws went into effect in just a few states, the damages would add to that pressure. Eventually the hope is that, backed into a corner, the hydrocarbon cartel would have to seek some kind of settlement, the way that the tobacco industry did a generation ago.
In the meantime, the warmest waters ever recorded in the Atlantic at this point in the season are threatening to produce a record hurricane season, with billions and billions of dollars in damage. Big Oil had a lot to do with building those winds. The question is if they’ll ever have to pay the price.
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