New York to fine fossil fuel companies $75 billion under new climate law

New York state will fine fossil fuel companies a total of $75 billion over the next 25 years to pay for damage caused to the climate under a bill Governor Kathy Hochul signed into law on Thursday.

The law is intended to shift some of the recovery and adaptation costs of climate change from individual taxpayers to oil, gas and coal companies that the law says are liable. The money raised will be spent on mitigating the impacts of climate change, including adapting roads, transit, water and sewage systems, buildings and other infrastructure.

"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," New York Senator Liz Krueger, a Democrat who co-sponsored the bill, said in a statement.

Fossil fuel companies will be fined based on the amount of greenhouse gases they released into the atmosphere between 2000 and 2018, to be paid into a Climate Superfund beginning in 2028. It will apply to any company that the New York Department of Environmental Conservation determines is responsible for more than 1 billion tons of global greenhouse gas emissions.

New York becomes the second state to pass such a law after Vermont passed its own version this summer. The laws are modeled after existing state and federal superfund laws that require polluters to pay to clean up toxic waste.

Repairing damage and adapting for extreme weather caused by climate change will cost New York more than $500 billion by 2050, Krueger said in her statement. Major oil companies made more than $1 trillion in profits since January 2021 and have known since at least the 1970s that the extraction and burning of fossil fuels contribute to climate change, she said.

Energy companies are expected to file legal challenges to the new law, arguing that it is preempted by federal law regulating energy companies and polluters.