New York has taken a decisive step in addressing the escalating costs of climate change by creating a Climate Superfund. Governor Kathy Hochul signed the legislation into law, which mandates that fossil fuel companies fund critical infrastructure projects aimed at protecting communities from climate-driven disasters like flooding, extreme heat, and coastal erosion.
“With nearly every record rainfall, heatwave, and coastal storm, New Yorkers are increasingly burdened with billions of dollars in health, safety, and environmental consequences due to polluters that have historically harmed our environment,” said Governor Hochul.
The Climate Superfund ensures that fossil fuel companies—identified as the primary contributors to greenhouse gas emissions—are financially responsible for mitigation efforts. Funds will support projects like flood defenses, coastal protections, and heat-mitigation systems, benefiting communities facing disproportionate climate risks.
State Senator Liz Krueger, a co-sponsor of the bill, emphasized the broader implications: “Repairing from and preparing for extreme weather caused by climate change will cost more than half a trillion dollars statewide by 2050. That’s over $65,000 per household. This legislation delivers billions annually to ease the burden on New Yorkers while holding major polluters accountable.”
The financial impact of climate change on New York is undeniable. According to the Environmental Protection Agency (EPA), extreme weather events have cost the United States over $1 trillion since 1980, with New York bearing a significant portion of that burden. By requiring fossil fuel companies to pay into the Climate Superfund, the state aims to reduce the financial strain on taxpayers.
Blair Horner, Executive Director of the New York Public Interest Research Group (NYPIRG), praised the law as a financial win for taxpayers: “This legislation ensures that Big Oil will contribute to the damages they helped cause, reducing future tax burdens by $3 billion annually.”
Governor Hochul also expanded on New York’s 2014 ban on high-volume hydraulic fracturing by prohibiting using carbon dioxide in gas or oil extraction. This action closes loopholes that pose potential environmental and health risks. Advocates like Assemblymember Anna Kelles applauded the move, citing concerns over pipeline ruptures and soil destabilization caused by carbon dioxide extraction.
New York’s Climate Superfund law establishes a model for other states and nations seeking to address the financial challenges of climate adaptation. Vanessa Fajans-Turner, Executive Director of Environmental Advocates NY, emphasized the significance of the legislation: “These measures provide vital funding for infrastructure, protect public health, and reduce financial burdens on families, particularly in disadvantaged communities.”
The Climate Superfund aligns with New York’s broader climate agenda, which targets an emissions-free economy by 2050. By requiring fossil fuel companies to fund climate adaptation projects, the law shifts the financial responsibility away from taxpayers and prioritizes resilience efforts across the state.
Fossil fuel companies have vehemently opposed New York’s Climate Superfund law, which mandates that major emitters contribute financially to the state’s climate adaptation efforts. The American Petroleum Institute (API), representing the oil and gas industry, criticized the legislation as a punitive measure against American energy producers. An API spokesperson stated that the industry is focused on providing real solutions to meet growing energy demand while addressing climate change and described the New York law as a diversion from shared goals for a cleaner future.
Energy companies are expected to challenge the law in court, arguing that it conflicts with federal regulations and imposes unfair financial burdens on the industry. Legal experts anticipate that these challenges will focus on the law’s alignment with federal policies and its potential impact on energy markets.
While specific profit figures for fossil fuel companies operating exclusively within New York State are not publicly disclosed, the global profitability of significant fossil fuel corporations is substantial. For instance, the eight largest fossil fuel companies collectively earned $389 billion in profits in 2022.
In the first quarter of 2022 alone, the nation’s top 25 fossil fuel companies reported nearly $100 billion in combined profits, with ExxonMobil accounting for almost $6 billion.
These figures highlight the significant financial resources of fossil fuel companies, which are now being called upon to contribute to climate adaptation and mitigation efforts in New York through the recently enacted Climate Superfund law.
It's important to note that while these companies generate substantial profits, the financial obligations imposed by the Climate Superfund law represent a relatively small percentage of their overall earnings. This approach seeks to balance holding polluters accountable while minimizing potential economic disruptions.
