Vermont has made history by being the first state to pass a law mandating that fossil fuel companies contribute to the costs of climate change damages. This decision comes after the state experienced severe summer flooding and other extreme weather events.
Republican Gov. Phil Scott allowed the bill to become law without his signature, expressing concerns about the potential costs and outcomes of challenging “Big Oil.”
Similar measures are being considered in Maryland, Massachusetts, and New York.
The legislation requires the Vermont state treasurer, in collaboration with the Agency of Natural Resources, to produce a report by Jan. 15, 2026, detailing the total costs incurred by Vermont and its residents due to greenhouse gas emissions between Jan. 1, 1995, and Dec. 31, 2024. This assessment will address the impacts on various aspects such as public health, natural resources, agriculture, and economic development.
The bill implements a polluter-pays model, targeting companies involved in extracting fossil fuel or refining crude oil that contributed to over 1 billion metric tons of greenhouse gas emissions during the specified period. The funds collected will be utilized for infrastructure improvements and energy-efficient upgrades across the state.
Paul Burns, the executive director of the Vermont Public Interest Research Group, applauded the legislation for holding fossil fuel companies accountable for the damages caused by climate change.
The American Petroleum Institute has raised concerns about the law, stating that it imposes costs retroactively and violates certain rights of the companies. It also raised issues regarding the lack of notice provided to potentially affected businesses.
Vermont legislators are aware of the anticipated legal challenges and the governor’s apprehensions about the financial implications for the state. Despite these concerns, lawmakers believe in the necessity of pursuing funding to address the impacts of climate change.
Vermont state Rep. Martin LaLonde emphasized the importance of not relieving corporations of their responsibility to mitigate climate change effects, highlighting the significant costs and consequences for Vermonters.
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