As climate adaptation and mitigation costs escalate, a wave of state climate superfund legislation is emerging across the United States. This novel approach to climate accountability, pioneered by Vermont and New York, imposes retrospective financial responsibilities on major carbon emitters to fund state climate resilience projects. Payment obligations under New York and Vermont’s laws will be established in 2026 and 2027, respectively.
Five other states are now considering similar legislation, and Oregon is additionally considering creating a private cause of action against emitters for individuals harmed by extreme weather events. This trend of state superfund laws signals a growing interest by states to regulate climate issues at a time when the federal administration has indicated its intent to reduce regulation and enforcement in this area. While legal challenges may delay the implementation of these state laws or reduce their scope, states are unlikely to abandon their commitment to regulating emissions. Companies, particularly in the energy sector or high-emitting industries, must prepare for a patchwork of potentially overlapping and inconsistent regulations and financial obligations related to greenhouse gas (GHG) emissions.
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Modeled after the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), state superfund laws utilize a “polluter pays” approach to hold fossil fuel companies financially accountable for their contributions to climate change. These laws focus on historical GHG emissions, requiring companies to contribute to superfunds regardless of the legality of their actions at the time of emissions.
Vermont’s Climate Superfund Act, enacted in May 2024 following the catastrophic Great Vermont Flood,[1] targets companies that generated over one billion metric tons of GHG emissions between 1995 and 2024. The law requires the state Treasurer to assess the costs to the state and its residents of the emissions of GHGs during the stated period. Regulated companies will be required to pay an amount of the assessed costs proportional to their share of covered GHG emissions during the period, with the revenues to be used to fund critical climate mitigation and adaptation infrastructure.
Vermont’s Treasurer must develop its cost assessment by January 15, 2026. The state is currently seeking input to determine which fossil fuel companies should be held accountable and how to calculate their share of climate-related costs. The methodologies to identify responsible parties and determine their applicable share of covered GHG emissions will be adopted by January 1, 2027.
New York’s Climate Change Superfund Act (CCSFA), passed in December 2024, mandates an annual collection of $3 billion over 25 years. The statute targets fossil fuel companies active between the years 2000 and 2018. The New York State Department of Environmental Conservation has until December 26, 2025, to promulgate regulations implementing the law, including adopting methodologies to identify responsible parties, determine their covered GHG emissions, and issue notices of cost recovery demands. Payments are due on September 30, 2026, and annually thereafter.
On January 8, 2025, an amendment was proposed to the CCSA. Among other changes, the amended law would set forth a new process for challenging the cost recovery demand, extend the covered period from 18 to 24 years, and remove a responsible party’s option to pay their cost recovery demand in annual installments. Additionally, New York authorities would be empowered to send requests to covered entities inquiring into, among other things, “past practices, production, extraction, refining, emissions, or other historical information” needed to make responsibility determinations. The amended law would delay the issuance of cost recovery demands to June 30, 2028, and responsible parties’ payments would be due by December 30, 2028.
Other Pending Climate Superfund Legislation
In September 2024, Sen. Van Hollen (D-MD) and Rep. Nadler (D-NY-12) introduced the Polluters Pay Fund legislation to establish a unified federal framework for climate liability. The bill mirrors the state laws by requiring large fossil fuel companies to pay into a fund based on their proportional share of historical emissions. The bill has not advanced beyond the initial committee referral and is unlikely to gain traction under a Republican-controlled Congress in 2025.
Despite likely federal inaction on climate liability, several states are considering legislation similar to Vermont and New York, indicating a growing trend toward holding fossil fuel companies financially responsible for the impacts of climate change:
California: The Polluters Pay Climate Cost Recovery Act (S.B. 1497) would require the California Environmental Protection Agency to determine the total costs incurred by the state due to climate change and potential mitigation and adaptation expenditures through December 31, 2045. The agency would assess cost recovery against fossil fuel companies based on their proportional share of emissions between January 1, 2000, and December 31, 2020. The bill did not advance in 2024 but is expected to be reintroduced this year, particularly in light of the devastation caused by recent wildfires in the Los Angeles area.
Maryland: Maryland’s Responding to Emergency Needs from Extreme Weather Act (H.B. 1438 and S.B. 958) would establish a climate change superfund to recover $9 billion in costs for climate-related adaptation expenses. The bill targets companies with GHG emissions exceeding one billion metric tons of CO2-equivalent emissions between 2000 and 2018. The bill is early in the legislative process, as it was first read in committee on January 8, 2025.
Massachusetts: Massachusetts’ Climate Change Adaptation Cost Recovery Act (H.B. 872 and S.B. 481) proposes a $75 billion fund over 25 years to be financed by major fossil fuel companies. The bill targets companies with GHG emissions exceeding one billion metric tons of CO2-equivalent emissions between 1995 and 2024. The bill was filed for consideration in the current legislative session on January 17, 2025.
New Jersey: New Jersey’s Climate Superfund Act (S.B. 3545 and A.B. 4696) would impose liability on fossil fuel companies responsible for more than one billion metric tons of GHG emissions between January 1, 1995, and the act’s effective date. The State Treasurer would be tasked with assessing the state’s damages related to GHG emissions, which would then be apportioned to the responsible entities based on their contribution to total emissions. The bill was introduced in September 2024 and referred to the committee in December.
Oregon: The Oregon legislature is considering two bills establishing strict liability for emitters. Both bills are currently before the state’s Senate Committee on Energy and Environment.
The Oregon Climate Change Recovery Fund Act (SB682) mirrors other state superfund laws by imposing strict liability for fossil fuel companies responsible for more than one billion metric tons of GHG emissions between January 1, 1995, and December 31, 2024. The bill would establish the Climate Superfund Cost Recovery Program within the Department of Environmental Quality, which is tasked with assessing the financial impacts of GHG emissions in Oregon.
By contrast, the Climate Change Superfund Act (SB679) would allow individuals harmed by climate disasters or extreme weather events to bring an action against emitters to recover damages. All entities having emitted over one billion metric tons of CO2-equivalent since January 1, 1965, would be held jointly, severally, and strictly liable for the damages.
Anticipated Legal and Implementation Challenges
State climate superfund laws are expected to encounter substantial legal challenges.
The U.S. Chamber of Commerce and the American Petroleum Institute filed suit against Vermont’s Climate Superfund Act in December 2024, arguing that the law is preempted by the Clean Air Act and violates the Dormant Commerce Clause.
On February 6, 2025, a coalition of 22 states led by West Virginia filed a lawsuit against New York, challenging that state’s recently enacted CCSFA. The plaintiff states contend that the law is unconstitutional because it is preempted by the Clean Air Act, which designates the federal government as the primary authority for establishing interstate emissions standards.
While the superfund laws generally include language limiting their reach to emitters with sufficient connection to the state to satisfy constitutional requirements, the laws are still likely to be challenged on Due Process and Commerce Clause grounds. Notably, none of the laws, as enacted or proposed, require the emissions to originate in or reach the legislating state. Thus, in addition to Dormant Commerce Clause challenges, the laws are vulnerable to the claim that they exceed the state taxing power under the Commerce Clause because there is an insufficient nexus between the taxed activities and the taxing state.
Concerns have also been raised about the constitutionality of imposing retroactive liability on companies for actions that were legal at the time and on limiting liability to only a subset of polluters. However, courts have repeatedly upheld the model of retroactive liability pioneered by CERCLA.[2]
Finally, the superfund laws require state agencies to apply attribution methodologies to allocate responsibility for historical emissions. This process relies on climate-attribution science, a complex and evolving branch of science that seeks to isolate the effect of human influence on the climate. The laws tie cost recovery to state expenditures rather than damages, which avoids the difficult task of assigning a specific dollar value to the damages attributable to a particular entity. However, state lawmakers need to justify the cost recovery estimates, including by using attribution research to show that recovery costs are attributable to climate change.
While advances in attribution science have paved the way[3] for this flurry of state legislative action, representatives of the fossil fuel industry have already called into question[4] the validity of attribution science, going so far as to characterize it as “a conspiracy of the Rockefeller Family Fund.”
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The new presidential administration appears to be ushering in a period of federal deregulation on climate issues, leaving a regulatory void for states committed to pursuing climate accountability, mitigation, and adaptation measures. The administration directed the EPA to review the “legality and continuing applicability” of its 2009 GHG endangerment finding. This finding is the basis for EPA’s authority to regulate GHG emissions from vehicles and power plants under the Clean Air Act, and its revocation could significantly weaken climate regulations. The administration has also indicated an intent to terminate the use of the social cost of carbon in federal decision‑making and to revoke California’s state emissions waiver, which has allowed California to establish its own more stringent tailpipe emission standards.
Despite this expected federal rollback of regulation on climate issues, state superfund laws indicate a renewed interest by states in creating and enforcing climate-related obligations. California has enacted mandatory climate-related disclosures for businesses, and several other state legislatures have considered similar requirements.[5] Even if state superfund laws are successfully challenged in court, states are likely to reinstate them with a more limited scope—such as by limiting their reach to emissions produced within the state’s borders—or to attempt other measures to cap emissions or tax large polluters. For example, fourteen states now operate some type of cap-and-trade emission reduction system.
While the ultimate legal status of the superfund laws remains uncertain, these laws mark a significant escalation in environmental regulation, potentially establishing a template for retroactively requiring polluting industries to internalize the environmental costs of their products. This escalation constitutes an emerging regulatory risk for sectors that originate pollution, such as fossil fuel companies, the industrial agriculture sector—which directly generates large quantities of methane emissions from livestock—and the plastics industry—which produces large amounts of nonbiodegradable waste.
However, broad state action to internalize the externalities of pollution will likely face political barriers, in additional to legal challenges, if forcing industries to absorb the costs of their climate impacts drives up the end-cost of certain consumer products.
MoFo’s environmental and climate litigation and regulatory attorneys continue to monitor climate-related obligations at the state and federal level and are available to advise companies navigating this evolving regulatory landscape.
[1] The Great Vermont Flood of 2024 came after an already historic flood in the state in 2023. The 2024 flood destroyed over a dozen bridges and 40 homes, damaging over 3,500 acres of farmland and causing more than $15 million of damage to public infrastructure. See, John Goff & Pete Banacos, Extreme Nocturnal Rainfall and Flash Flooding in Vermont’s Northeast Kingdom: 30 July 2024, National Weather Service (Oct. 9, 2024), https://www.weather.gov/btv/Extreme-Nocturnal-Rainfall-and-Flash-Flooding-in-Vermonts-Northeast-Kingdom-30-July-2024; Vermont Requests Federal Assessment of July 10-11 Storms and Flood Damage, Office of Governor Phil Scott (July 13, 2024), https://governor.vermont.gov/press-release/vermont-requests-federal-assessment-july-10-11-storms-and-flood-damage; July 2024 Flood Loss & Damage Survey, Vermont Agency of Agriculture, Food & Markets, (last visited, Feb. 10, 2025), https://app.powerbigov.us/view?r=eyJrIjoiODg2NWI2ODQtZTEyOC00NTg1LWJjNDAtZTVmYmMwZjc4ZGM2IiwidCI6IjIwYjQ5MzNiLWJhYWQtNDMzYy05YzAyLTcwZWRjYzc1NTljNiJ9.
[2] United States v. Olin Corp.,107 F.3d 1506 (11th Cir. 1997); United States v. Ne. Pharm. & Chem. Co., 810 F.2d 726 (8th Cir. 1986); Franklin Cnty. Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534 (6th Cir. 2001); United States v. Alcan Aluminum Corp., 315 F.3d 179 (2d Cir. 2003).
[3] One of the sponsors of New York’s Climate Superfund bill directly stated that the bill was inspired by source attribution research on carbon dioxide and methane emissions attributable to fossil fuel and cement producers. Liz Krueger, Krueger, Dinowitz Introduce Nation-Leading Climate Change Superfund Act, NY State Senate (May 26, 2022). Similarly, Senator Anne Watson of Vermont credited attribution science with reassuring lawmakers that they have an empirical basis for seeking money from large fossil fuel companies. Adam Aton & Lesley Clark, A Superfund from climate? These states are pushing for it, E&E News by Politico (Mar. 6, 2024), https://www.eenews.net/articles/a-superfund-for-climate-these-states-are-pushing-for-it/.
[4] See Letter from Michael S. Giaimo, Northeast Region Director, Am. Petroleum Inst. to Senate President Pro Tempore Philip Baruth and Members of the Senate (Mar. 27, 2024), https://drive.google.com/file/d/19epd5c5Qyfg1Lk20y1jgCBOyYKqMK22j/view (“The bill incorrectly suggests that past emissions attributable to companies can be determined with great accuracy. That is simply not true. At best the state can only estimate emissions; and these estimates are imprecise.”).
[5] See the Washington Climate Corporate Data Accountability Act (WA SB 6092) and two New York bills creating corporate climate disclosure requirements, (NY SB 7705 and NY SB 897/AB 4123).
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