New York Climate Superfund Becomes Law

After years of halting progress, New York Governor Kathy Hochul finally signed the state’s climate superfund into law in the waning hours of 2024.

The landmark legislation follows the “polluter pays” approach that a traditional, federally regulated superfund applies to ground and water pollution, and it expands the doctrine to the costs of damages from climate change, where greenhouse emissions are the analogous pollution. The law seeks to recover $75 billion from major oil and gas companies over the next 25 years, in $3 billion annual installments.

New York’s law is the second of its kind in the U.S. to adapt a traditional superfund model to climate disasters, joining Vermont, which passed the first climate superfund in May. The law’s passage in New York represents growing momentum for a coalition of Northeast states exploring this superfund model as a way to foot the bill for massive climate damages. Maryland, Massachusetts and California are considering similar legislation. 

Like Vermont’s climate superfund, the New York law establishes a fund to cover the costs of rebuilding from climate disasters and of upgrading infrastructure for future storms. 

The oil industry has already appealed Vermont’s legislation and is gearing up for a fight in New York. “This type of legislation represents nothing more than a punitive new fee on American energy,” Scott Lauermann, a spokesperson for the American Petroleum Institute, wrote in a statement, adding that the trade association will be “evaluating [its] options” with regard to the New York law.

New York already knows the steep costs of rebuilding from extreme weather all across the state; mere weeks before the superfund became law, lake-effect snow slammed 11 counties in the northwest part of the state, from Buffalo to Syracuse, and caused power outages and road emergencies. 

Infrastructure upgrades and advanced planning can prevent the most expensive damages from blizzards, University at Buffalo professor of engineering Michael Bruneau argues in The Conversation. This summer, extreme rain in Suffolk County caused flash flooding that breached two dams. In addition to the damage to roads and bridges, more than 2,000 people reported flood destruction to buildings—with 70 buildings completely destroyed or in need of major restoration. Climate forecasts for New York only predict more extremes and more expenses. 

The $75 billion required by the law reflects only a fraction of the $150 billion the state estimates it will need to cover reconstruction and climate adaptive infrastructure by 2050.

The law casts a wide net for what it can cover as “adaptive infrastructure projects.” It details an extensive list of examples, including—but not limited to—the restoration of stormwater drainage and sewage treatment systems, upgrades to transit systems, roads and bridges, the installation of green spaces to mitigate city heat islands and even medical coverage and preventative health programs for illnesses and injuries induced by climate change. The New York State Department of Environmental Conservation is tasked with identifying and dispersing funds to the projects that the law will cover.

These projects can fall into two categories: paying for repairs after storms and upgrading infrastructure to avoid damages in the first place. FEMA estimates that each $1 invested in mitigation infrastructure can save between $4-$7 in repairs from damages.

Shifting the conversation toward the question of how taxpayers will pay for climate damages helped propel the bill to passage, said Blair Horner, executive director of the New York Public Interest Research Group, which helped design and advocate for the climate superfund.

“The road gets washed out, the bridge gets washed out—you have to pay those bills. It’s not like there’s a choice,” he said. “This is a real problem that’s going to cost big bucks. Where the hell is it going to come from?”

Martin Lockman, a climate law fellow at Columbia University’s Sabin Center, sees these superfund programs as tools to cover costs more than anything else: “These bills are not bans on the oil and gas industry. They’re very much cost-recovery attempts,” he said.

Alone, superfund laws are not broadly effective at reducing sales or use of oil and gas, Lockman explained. “Even if you ban oil tomorrow, we still have millions of cars in this country that rely on oil and gas; we have this massive energy structure that uses a lot of fossil fuels. You can’t just ban your way out of this. You have to build your way out of it.”

Though fossil fuel companies rack up record profits—with Exxon Mobil alone reporting $36 billion in profits for 2023—mounting fees from climate superfunds across the U.S. and other countries could induce something like a run on a bank, Lockman said. “And in that case, the question is, who can get to the oil and gas companies first and pull money out?” 

Collectively these laws may place enough disparate pressure on oil and gas companies that they provoke a need for a national strategy, experts say.

Passing these laws state by state “is a really uncoordinated way of dealing with the damage of climate change—but that then puts pressure on national legislators to kind of figure out some unified solution that applies across the country,” Lockman added. 

For now, the federal Polluters Pay Climate Fund Act has stalled in Congress. 

Massachusetts and Maryland both introduced near-identical versions of the New York bill in their 2024 legislative sessions.

Massachusetts state Sen. James Eldrige, who introduced the Bay State’s superfund bill, said the law’s passage in New York can galvanize efforts elsewhere. “For a large state like New York, which is similar to Massachusetts as a very industrialized state with a large population, to pass this, speaks well to the argument that we can do this in Massachusetts, too.” 

He said he and his colleagues had already been working on re-drafting the bill for introduction at the start of the 2025 legislative session in Massachusetts, and have since been collaborating with New York advocates to refine the Massachusetts’ approach.

In New Jersey, elected officials are similarly eyeing a superfund bill; state Sen. John F. McKeon posted on X praising the law’s passage, adding that he “urges” New Jersey to follow with its own version of the landmark legislation.

But as momentum for these superfund bills mount, so too do the legal challenges. Just four days after the law’s passage in New York, the American Petroleum Institute and the U.S. Chamber of Commerce filed the first complaint against Vermont’s superfund law in U.S. District Court for Vermont.

They argue that the federal Clean Air Act preempts the Vermont law, thus making it unconstitutional. “The question is whether or not the system of federal regulation for air pollution is so comprehensive that this kind of layer of state liability for air pollution can’t exist on top,” Lockman explained.

If the case is appealed, and an appellate court deems that federal policy does indeed preempt the Vermont law, it could also jeopardize other state’s climate superfunds—though an appeal, let alone a decision, in Vermont is likely years away. 

Since New York and Vermont are both in the Second Circuit in the U.S. Courts of Appeal, a decision in a Vermont’s appeal would be binding for New York. Massachusetts, Maryland and California are all outside the Second Circuit, where the Vermont decision would not be binding, but it would be “highly persuasive” to those state’s courts, Lockman said.

It’s likely, though, that the central question of the case will make its way to the Supreme Court in time. 

“Eventually, this issue of ‘can states adopt laws modeled on superfunds, that hold oil companies liable for a problem that’s global and beyond anything domestic law has ever contemplated,’ that issue probably has to be resolved by the Supreme Court,” said Pat Parenteau, emeritus professor at Vermont Law School’s Environmental Law Center and a former EPA regional counsel. “The oil companies’ strongest argument is you can’t leave it up to the 50 states to decide what the law is because you’re going to get a crazy quilt.”

That eventuality is many expensive years of potential dismissals and appeals away, Parenteau said.  

In the meantime, advocates are focused on more immediate challenges: “There are really two courts where things are going to play out,” Horner said. “The legal courts, and the court of public opinion. And right now, taxpayers are on the hook for 100 percent of the cost from climate damages.” 

In both arenas, he added, “we are confident that the state will prevail.”