Quick Summary:
• Vermont passed a first-of-its-kind law requiring fossil fuel companies to pay for climate damages caused by their products.
• The U.S. Chamber of Commerce and the American Petroleum Institute filed a federal lawsuit to block the law, arguing it violates the U.S. Constitution and the Clean Air Act.
• Vermont’s law is modeled after the federal Superfund program and aims to cover damages from greenhouse gas emissions dating back to 1995.
• The lawsuit claims it’s impossible to fairly measure the impact of emissions from specific companies over decades.
• Vermont officials say the law is necessary to help cover the costs of climate disasters like the $1 billion in damages caused by recent flooding.
• New York and other states are considering similar laws, indicating a broader trend toward holding polluters financially accountable for climate change.
• Environmental advocates argue that fossil fuel companies have long profited while avoiding accountability for their role in the climate crisis.
In a move that could set a precedent for climate accountability laws across the United States, the U.S. Chamber of Commerce and the American Petroleum Institute (API) have filed a lawsuit against the state of Vermont. The lawsuit challenges Vermont’s groundbreaking law that requires fossil fuel companies to pay for damages caused by climate change, which has increasingly devastated the state through extreme weather events.
The law, passed in 2024, makes Vermont the first state in the nation to hold fossil fuel companies accountable for a share of the financial burden caused by climate change. Vermont’s move follows a series of catastrophic weather events, including over $1 billion in damages from summer flooding that left the state grappling with the impacts of climate change.
The lawsuit, filed last Monday in the U.S. District Court for the District of Vermont, seeks to block the state from enforcing the law. The plaintiffs — the U.S. Chamber of Commerce and API — argue that Vermont’s law is unconstitutional. They claim it violates the U.S. Constitution’s commerce clauses by targeting out-of-state companies and that the federal Clean Air Act preempts state-level climate regulations.
The lawsuit asserts, “Vermont wants to impose massive retroactive penalties going back 30 years for lawful, out-of-state conduct that was regulated by Congress under the Clean Air Act.” Tara Morrissey, senior vice president of the Chamber’s litigation center, stated that the state’s actions could have widespread economic repercussions. “That is unlawful and violates the structure of the U.S. Constitution — one state can’t try to regulate a global issue best left to the federal government. Vermont’s penalties will ultimately raise costs for consumers in Vermont and across the country.”
The fossil fuel industry claims that because greenhouse gas emissions come from billions of individual sources, it is impossible to fairly measure the impact of emissions from one entity over decades. The industry argues that climate change is a global issue and should be addressed by the federal government rather than through state-level legislation.
Vermont’s law, modeled after the federal Superfund law, requires fossil fuel companies to pay for the state’s climate-related damages dating back to January 1, 1995. The state plans to calculate the cost of damages using federal data and assess how much greenhouse gas emissions can be attributed to each company.
The funds collected through the law will be used to mitigate future climate impacts by improving infrastructure such as stormwater drainage systems, upgrading roads and bridges, and weatherizing buildings. The goal is to reduce the financial burden on Vermont residents and businesses who are already paying for the effects of climate change.
Paul Burns, executive director of the Vermont Public Interest Research Group (VPIRG), praised the law, saying, “For too long, giant fossil fuel companies have knowingly lit the match of climate disruption without being required to do a thing to put out the fire. Finally, maybe for the first time anywhere, Vermont is going to hold the companies most responsible for climate-driven floods, fires, and heat waves financially accountable for a fair share of the damages they’ve caused.”
Anthony Iarrapino, a Vermont-based lobbyist with the Conservation Law Foundation, echoed those sentiments, calling the lawsuit an attempt by the fossil fuel industry to shirk responsibility. “More states are following Vermont’s lead holding Big Oil accountable for the disaster recovery and cleanup costs from severe storms fueled by climate change, ensuring that families and businesses no longer have to foot the entire bill time and time again,” Iarrapino said.
Vermont’s law has caught the attention of other states considering similar legislation. New York recently passed a similar law, the Climate Change Superfund Act, which requires major greenhouse gas emitters to pay into a fund for climate adaptation projects. Maryland and Massachusetts are also expected to introduce similar bills in the coming year.
New York Governor Kathy Hochul, who signed the state’s bill into law in December, emphasized the importance of funding climate adaptation projects to prepare for future disasters. Vermont’s approach could inspire other states to hold fossil fuel companies accountable for climate-related damages, especially as extreme weather events become more frequent and severe.
These state-level initiatives could signal a shift in how the U.S. addresses climate accountability. While the federal government has traditionally been slow to act on climate liability, states like Vermont and New York are taking matters into their own hands.
The fossil fuel industry has long resisted efforts to hold it accountable for its role in driving climate change. The industry has repeatedly argued that emissions are a byproduct of lawful activities and that holding individual companies responsible for global climate change is unfair.
However, legal experts and environmental advocates argue that fossil fuel companies have known for decades about the harmful effects of their products and have continued to profit while delaying action on climate change.
“The companies responsible for the bulk of greenhouse gas emissions should contribute to the costs of climate adaptation and disaster recovery,” said Katherine O’Brien, a senior attorney at Earthjustice. “Vermont’s law is a step toward making polluters pay for the damage they’ve caused.”
Vermont officials have expressed confidence in defending the state’s law. As of January 3, the state’s Attorney General’s Office had not been served with the lawsuit, but officials are preparing for a legal battle.
A spokesperson for Vermont’s Agency of Natural Resources said, “We will continue to advocate for policies that protect our state and ensure that those responsible for climate change impacts contribute to the cost of addressing them.”
The state treasurer, in consultation with the Agency of Natural Resources, is scheduled to issue a report by January 2026 detailing the total cost of climate damages to Vermont from 1995 to 2024. The report will assess the impacts of climate change on public health, agriculture, natural resources, and infrastructure, providing a clearer picture of the financial toll that climate change has taken on the state.
Vermont’s new climate accountability law is at the forefront of a growing movement to hold fossil fuel companies responsible for their contributions to climate change. The lawsuit from Big Oil is likely to be a major legal test of whether states can enforce polluter-pays laws for climate damages. As other states consider similar legislation, Vermont’s fight could have far-reaching implications for climate policy across the country.
“For too long, giant fossil fuel companies have knowingly lit the match of climate disruption without being required to do a thing to put out the fire,” said Paul Burns.
COMMENTS