Nearly a year after catastrophic flooding hit Vermont, the town of Barre faces the daunting task of preparing for the next climate disaster.
It is necessary to build two bridges. The north end of Barre “literally needs to be rebuilt,” said Mayor Thom Lauzon, who was recently elected and is now overseeing the city’s recovery. Of the 300 properties damaged by the floods, many are still in various states of disrepair and at least 50 are uninhabitable.
Across the country, state and local leaders are struggling to find the money they need to protect their communities from worsening disasters caused by climate change. For Barre, the necessary flood mitigation projects will cost the city an estimated $30 million over the next five years, Lauzon said.
However, Vermont has a new answer to this problem.
Earlier this month, it became the first state in the country to require fossil fuel companies and other big emitters to pay for the climate-related damage their pollution has already caused across the state. While conservative legal experts are skeptical that the law will survive the challenges, some Vermonters said they are grateful and a little nervous that one of the country’s least populous states has picked a fight with one of its most powerful industries. from the United States.
“I’m proud that this state is standing up and saying, ‘Look, they need to be held accountable and they need to help us with the harm that we suffered,’” Lauzon said. “But I’m also scared to death. “I feel like we are a football team going up against the 2020 New England Patriots.”
The Vermont law comes as oil and gas companies face dozens of climate lawsuits, both in the United States and abroad. While only a few have been successful (and are being appealed), they pose a growing threat and increase potential liabilities for companies. If Vermont’s novel approach endures, it could ripple across the industry.
Republicans are fighting back, arguing that individual states cannot apply their own laws to a global pollutant. Last month, Republican attorneys general from 19 states asked the Supreme Court to block climate change lawsuits brought by California, Connecticut, Minnesota, New Jersey and Rhode Island against fossil fuel companies.
The Vermont law authorizes the state to charge major polluters a fee for the proportion of greenhouse gas emissions they produced between 1995 and 2024. It is inspired by the 1980 federal Superfund law, which requires polluting companies to clean up toxic waste sites.
The law does not specify how much money must be paid; instead, it tasks the state treasurer with assessing the damage Vermont has suffered due to climate change and how much it will cost to prepare for future impacts. The final tally is expected to be comprehensive and take into account a range of potential costs, from rebuilding and raising bridges and roads to lower worker productivity due to increased heat.
Bills similar to Vermont’s have been introduced in several states, including California, Maryland and Massachusetts. Last week, New York lawmakers passed a climate superfund bill that would require polluters to pay $3 billion a year for 25 years. It now awaits Democratic Gov. Kathy Hochul’s signature.
The timing of Vermont’s law was no coincidence, said Ben Edgerly Walsh, director of the climate and energy program at the Vermont Public Interest Research Group. Memories of last July’s floods, which swamped the state capital of Montpelier, damaged thousands of homes and trapped people in small mountain towns, are still fresh.
Over the past year, Vermonters have also endured a rare late spring freeze that damaged crops, hazy skies from smoke drifted south from hundreds of wildfires in Canada, and more flooding in mid-December. All of these events prepared state lawmakers to address climate change in early 2024.
“When we presented this idea to legislators, they approached it with a very open mind in a way that could have taken longer, more convincing, in another year,” Edgerly Walsh said. “But this was a moment where we knew we had to act.”
As disaster recovery costs rise, it hasn’t been lost on state leaders that oil companies are enjoying massive profits. In 2023, the warmest year on record, the two largest energy companies in the United States, ExxonMobil and Chevron, together earned more than $57 billion.
It might seem unlikely that a state like Vermont, with a population of just under 650,000, would stand up to the fossil fuel industry. The state’s Republican governor, Phil Scott, expressed skepticism in a letter to the secretary of the Vermont Senate, writing: “Taking on ‘Big Oil’ should not be taken lightly. And with only $600,000 allocated by the Legislature to complete an analysis that will have to withstand intense legal scrutiny by a well-funded defense, we are not positioning ourselves for success.”
However, Vermont’s small budget (it has the lowest GDP in the country) means it feels the increasing risks of heavy rain more acutely than wealthier states. A report from Rebuild by Design, a nonprofit that helps communities recover from disasters, found that Vermont ranked fifth nationally in per capita disaster relief costs between 2011 and 2021, with $593 spent per resident.
Costs are expected to increase. A 2022 study by researchers at the University of Vermont predicted that the cost of property damage from flooding alone could exceed $5.2 billion over the next 100 years.
In the end, the governor allowed the law to go into effect without his signature, saying he understood “the desire to seek funding to mitigate the effects of climate change that has harmed our state in so many ways.”
Legal challenges will inevitably arise; the only question is when.
The oil and gas industry’s main lobbying group, the American Petroleum Institute, has said states do not have the power to regulate carbon pollution and cannot retroactively charge companies for emissions allowed by law. . He has also emphasized the responsibility of individuals for climate change, noting that Vermont residents use fossil fuels to heat their homes and power their cars. Scott Lauermann, a spokesman for the group, said KeynoteUSAI is “considering all of our options to reverse this punitive new fee.”
“I think the courts are going to have a problem with the idea that Vermont can penalize companies for past actions that were completely legal and that the state itself relies on,” said Jeff Holmstead, an energy lawyer who worked on the Environmental Protection Agency during the George W. Bush administration. “I’m skeptical that this will actually be approved.”
Supporters and environmentalists involved in drafting the law said they believed they had created a legally defensible way to recover damages from polluters by modeling it after the Superfund law, which has been repeatedly upheld in court. Several legal experts said the state had also taken a more conservative approach than others by requiring a study before assessing companies’ liability, ensuring that fines imposed against them are proportional to the amount of damage caused by their products.
Cara Horowitz, executive director of the Emmett Institute on Climate Change and the Environment at UCLA School of Law, said fossil fuel companies will inevitably challenge any bill Vermont introduces for damages. But that is years away, she said, and the industry is likely to move ahead sooner.
The lawsuits “will start soon and will last a long time,” Horowitz said. “I would be surprised if they didn’t preemptively try to undermine the entire exercise by declaring it illegal.”
At Barre, Lauzon said he is not confident the litigation over the law will be resolved in his lifetime. But even if fossil fuel companies never had to pay, she said, passing the law was the right thing to do.
“I can’t look at the far north, I can’t look at the city of Barre and say no one is held accountable,” he said.
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