New York to Fine Fossil Fuel Giants $75 Billion Under New Climate Law

• Historic Accountability: Fossil fuel companies will pay $75 billion over 25 years for their role in climate damage.
• Infrastructure Focus: Funds will support climate adaptation projects like roads, transit, and water systems.
• Legal Battles Loom: Energy companies plan to challenge the law, citing federal preemption.

New York state has enacted a groundbreaking climate law to hold fossil fuel companies accountable for their role in the climate crisis. Governor Kathy Hochul signed the bill into law on Thursday, introducing a $75 billion fine system over the next 25 years. The funds will be used to repair and adapt infrastructure damaged by climate change, shifting the financial burden from taxpayers to the companies deemed responsible.

“New York has fired a shot that will be heard round the world: The companies most responsible for the climate crisis will be held accountable,” said New York Senator Liz Krueger, a Democrat and co-sponsor of the bill.

The law applies to companies responsible for emitting over 1 billion tons of greenhouse gases globally between 2000 and 2018. Starting in 2028, these companies will be required to contribute to a newly established Climate Superfund, which will finance critical infrastructure projects such as coastal wetland restoration, upgrades to roads and bridges, and water drainage improvements.

Related Article: Tim Mohin: California Amends Climate Laws

Senator Krueger highlighted the scale of the climate challenge in New York:

“Repairing damage and adapting for extreme weather caused by climate change will cost New York more than $500 billion by 2050. Major oil companies, which have made more than $1 trillion in profits since 2021, must bear their fair share.”

This legislation follows Vermont’s similar law, enacted earlier this year, and is modeled after existing federal and state superfund laws targeting polluters of toxic waste.

The American Petroleum Institute (API), representing the oil industry, has pushed back strongly:

“This type of legislation represents nothing more than a punitive new fee on American energy, and we are evaluating our options moving forward,” said the API in a statement.

Legal challenges are expected, as energy companies argue the law conflicts with federal regulations on energy and pollution. Despite this, New York’s law sets a precedent that could inspire other states to pursue similar accountability measures.

Why it Matters:

This law positions New York as a leader in holding corporate polluters accountable while addressing the enormous financial and environmental challenges posed by climate change. Whether this initiative survives the anticipated legal challenges could determine its viability as a national model.

Follow ESG News on LinkedIn