Vermont officially becomes 1st state to charge big oil for climate change damage

In a pioneering measure to hold companies responsible for environmental damage, Vermont has officially become the first state to make oil and gas giants shell out billions in climate change damage by law.

Vermont's Climate Superfund Act, which parallels the Environmental Protection Agency's superfund program, mandates high-emission corporations -- such as ExxonMobil, Shell and Chevron -- to be financially accountable for a portion of the costs of extreme weather damage in the state.

On Thursday, Gov. Phil Scott let the Superfund Act, S.259, become law without his signature.

"For decades, fossil fuel corporations knowingly destroyed our planet for short-term profits," Vermont Sen. Bernie Sanders told ABC News earlier this month.

Companies responsible for more than one billion tons of greenhouse gas pollution globally must make payments calculated based on each corporation's emissions from 1995 to 2024, according to the legislation.

The bill uses data from the Carbon Majors database, which analyzes historical production data from 122 of the world's largest oil, gas, coal and cement producers, to litigate the climate liability claims.

Vermont's Agency of Natural Resources will allocate the funding for the Climate Superfund Cost Recovery Program Fund to enhance infrastructure, weatherproof public buildings and address the health impacts of climate change, the bill states.

The groundbreaking measure makes Vermont the first state in the country to enact a bill of this kind, with New York, California, Maryland and Massachusetts attempting to push similar policies.

"I am proud that Vermont will go further than any other state in forcing the fossil fuel industry to pay for the destruction caused by the crisis of climate change," Sanders previously said.

Marking a bipartisan victory, the bill passed in both Vermont's Senate and House with an overwhelming majority and headed to Republican Governor Phil Scott's desk, where he declined to sign or veto.

Due to his inaction, the act became a law 5 days after reaching his desk.

"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," Paul Burns, executive director of the Vermont Public Interest Research Group (VPIRG) said in a statement Thursday.

Proponents of the bill say the Superfund Act is the first legal step in a decades-long environmental crusade to hold polluting companies responsible for damaging waste.

"This effort comes down to a simple lesson that we all learn as kids: If you make a mess, you have to clean it up," Elena Mihaly, vice president of the Vermont chapter of the Conservation Law Foundation, told ABC News.

In July 2023, catastrophic flooding drenched communities across Vermont, leaving two people dead, bridges and roads decimated and over a billion dollars in property damage in its wake, according to Mihaly.

"Last year's devastating floods showed just how vulnerable Vermonters are to the climate chaos spurred by the fossil fuel industry," Mihaly said, adding, "It's Vermonters who bear the full burden of that chaos on our physical, mental and financial well-being."

Adversaries of the bill warn the legislation would pit the state against billion-dollar corporations in a legal battle that could never make it out of the courtroom.

"A decision was made to go to war with corporations that probably have as many attorneys as we do citizens," Vermont Sen. Russ Ingalls, who cast one of the three votes against the bill, told ABC News, adding, "We will be squashed like a bug."

Ingalls contends the Superfund Act would "cause our property taxes to rise by nearly 15%," arguing that the potential "millions" spent in litigation could be better spent.

A spokesperson for the American Petroleum Institute (API), the largest U.S. trade association for the oil and natural gas industry, argued the Superfund Act would "stall" corporations' progress to create "low-carbon solutions."

"America's natural gas and oil industry is working to address climate change and build a lower carbon future, while simultaneously meeting the world's growing energy needs," API's Scott Lauermann told ABC News.

"This proposal is nothing more than an unnecessary new fee on American energy that would only stall the innovative progress underway to accelerate low-carbon solutions while delivering the energy communities need," Lauermann said.

Environmental experts fear that promises of a sustainable future are not pushing the needle far enough when extreme weather damage has left communities displaced, and a state scrambling to respond.

"The reality is, the climate crisis is here," Ben Edgerly Walsh, climate and energy program director for the Vermont Public Interest Research Group, told ABC News. "It's already costing even little Vermont hundreds of millions of dollars -- so, we have to do right by our citizens and invest more in resiliency and adaptation."

Infrastructure projects funded by corporations would include flood protections such as upgrading stormwater drainage systems, making defensive upgrades to roads, bridges, railroads and transit systems, retrofitting sewage treatment plants and other infrastructure sites vulnerable to flooding and more, according to the bill.

Mihaly believes "the Climate Superfund bill is a rational, lawful and necessary means of holding the fossil fuel industry accountable to pay their fair share of those burdens."

"The global fossil fuel industry has contributed to making a mess in Vermont – and it's time for them to help clean it up," Mihaly said.