Green Watch

Superfund Shakedown: Part 1, On to Plan C


Climate change activists and their political allies are exasperated by humanity’s refusal to abandon its most important energy sources. They are convinced that fossil fuel producers represent an existential crisis for the planet, but the industry nevertheless persists in producing and selling the products demanded by consumers worldwide. Those activists have been unsuccessful at securing the federal legislation they seek, and their lawfare campaign has stalled. Now, the idea is for the government to simply send energy companies a series of massive bills.

Climate Superfund

The latest activist-driven government effort to squeeze money from the energy industry involves so-called “Climate Superfund” laws, modeled on the approach to hazardous waste remediation embodied in the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). The basic idea is to demand contributions from major energy companies into a public fund established to pay for costs allegedly associated with climate change–related weather impacts.

Environmental activists have compared Climate Superfund legislation favorably to the slew of lawsuits that have been filed in recent years by state and local governments against oil and gas companies, which have thus far been uniformly unsuccessful on their merits. The new laws have the same objective as this litigation—compel energy companies to fork over huge sums of money to the government—but they attempt to do so through legislative fiat rather than through civil liability. Michael Gerrard, founder of Columbia Law School’s Sabin Center for Climate Change Law, told the Wall Street Journal that Climate Superfund bills are a product of “frustration that better methods haven’t happened yet.” In other words, federal climate legislation of the sort desired by activists has not been forthcoming, and their lawfare campaign has been stymied. Those activists are now on to Plan C.

As of October 2024, Vermont is the only state with a Climate Superfund law on the books, though a bill has passed the New York state legislature and is headed to the governor’s desk. Legislation has also been introduced in Massachusetts, Maryland, California, and New Jersey. The basic thrust of each is similar, though the specifics vary. New York’s law is designed to squeeze $75 billion from the energy industry over 25 years, and a Wall Street Journal report noted that Saudi Aramco could be on the hook for up to $644 million annually, while companies such as ExxonMobil, Chevron, Shell, and BP could owe the state as much as $150 million each. This is all assuming Climate Superfund laws survive inevitable legal challenges, including whether they would even be applicable to foreign state-owned producers.

There has also been movement at the federal level. The Polluters Pay Climate Fund Act of 2024 was announced in September, with six senators and 17 representatives (all Democrats, plus Bernie Sanders) cosponsoring. It would require certain energy companies to pay into a new federal fund—purportedly to be capitalized to the tune of $1 trillion—based on their calculated relative share of global emissions. A press release explained that the money would be used for infrastructure projects, disaster assistance, and cleanup efforts, and 40 percent would be earmarked for the benefit of “environmental justice communities.” This would all be on top of any obligations the affected companies would face under state Climate Superfund laws, as well as any hypothetical liability arising from ongoing climate lawsuits.

Super Funds for Superfunds

Naturally, Climate Superfund bills have garnered enthusiastic support from the tremendously well-heeled environmental Left. One of the highest-profile supporters of such laws (at least in the philanthropic world) has been Lee Wasserman, director of the Rockefeller Family Fund, which itself has been a major backer of groups working to encourage the climate litigation campaign. The Rockefeller Family Fund supported passage of Vermont’s new Climate Superfund law, and Wasserman recently penned an op-ed for the New York Times urging other states and the federal government to follow suit.

The press release announcing the federal Polluters Pay Climate Fund Act of 2024 featured endorsements from over 60 different activist groups, including some of the wealthiest and most powerful environmental organizations in the country. Collectively, these groups have hundreds of millions of dollars at their annual disposal. The combined revenues of the Sierra Club, Earthjustice, and Oxfam America alone exceeded $400 million in their respective fiscal years ending in 2022, and this is not counting any legally affiliated entities. Other major nonprofit endorsers of the act include the League of Conservation Voters (2022 revenue: $68.9 million), the Union of Concerned Scientists (2022 revenue: $48.7 million), Greenpeace USA (2022 revenue: $32.5 million), the Center for Popular Democracy (2022 revenue: $30 million), and the Center for Biological Diversity (2022 revenue: $27.6 million).

These groups would presumably subscribe to what is perhaps the most astonishing claim made in the act’s press release, which is that a federal Climate Superfund regime would supposedly have “no impact on energy costs” and “not raise costs for consumers,” in part because “the tax assessment is based on past, not current, activity, so it does not impact the ongoing costs of production.” This defies logic and economics. Would the Sierra Club or Earthjustice claim that a hypothetical tax levied today, but calculated based on their past revenue, would have no impact on their current operational costs? Of course not. Anyone who thinks companies do not pass along their own increased costs to the consumer—for the understandable reason that they would like to stay in business—has clearly not gone grocery shopping recently. And of course, the cost of energy impacts the cost of virtually everything else.

Robert Stilson

Robert runs several of CRC’s specialized projects. Originally from Indiana, he has a B.A. from Hanover College and a J.D. from University of Richmond School of Law, where he graduated…
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