Down With ‘Climate Superfunds’: Why States (Still) Can’t Punish Energy Companies

New York’s latest attempt to regulate CO2 is illegal, unscientific and dangerous

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Most Americans want cheap energy and a clean environment, and a retooled EPA is finally delivering rules that don’t treat those goals as mortal enemies. Enter the killjoys: a clutch of state-level eco-warriors itching to sabotage the whole thing. New York’s Climate Change Superfund Act, inked by Governor Kathy Hochul as 2024 faded, is their latest weapon—a brazen $75 billion stick-up of fossil fuel companies over 25 years, all to bankroll a climate penance racket.

It’s not just bad policy; it’s a middle finger to federal authority, a junk-science cash grab that threatens to kneecap the economy while pretending to save the planet. Congress needs to assert its authority and scuttle the Superfund scheme before it does any damage.

Poverty as a climate solution

In the juvenile worldview of progressive politicians, “Big Oil” has earned a king's ransom by thoughtlessly pumping oil out of the ground and emitting dangerous amounts of CO2 into the atmosphere. That conspiracy theory doesn’t square with what we know about the impacts of climate change. But more importantly, it leads New York’s leadership to believe that global warming can be reversed by extracting wealth from the energy sector. It's a misapplication of the classic “polluter pays” principle and it’s doomed to fail for several critical reasons.

Most importantly, the economic fallout would be disastrous. The New York law targets companies responsible for over 1 billion tons of emissions, demanding $3 billion in annual penalties. But that money doesn't materialize out of the ether. We know that existing punitive measures aimed at oil and gas producers raise energy costs significantly, forcing millions of people to choose between paying their energy bills and buying food and medicine. A cruel trade off no one should be forced to make.

The Congressional Budget Office has also found that the effects of higher energy costs reverberate throughout the economy as the prices of all goods and services tend to rise, diminishing “the purchasing power of people’s earnings, effectively reducing their ... wages.”

Then there are the impacts on the energy industry itself—not company CEOs but the workers who move energy down the supply chain until it reaches your local gas station. US states with large oil and gas sectors anticipate that New York's ill-conceived law will eliminate thousands of jobs performed by their residents as billion-dollar penalties slash industry investment.

Several studies investigating carbon taxes implemented around the world—which operate on the same polluter pays illogic—have shown that such punitive energy regulations drive layoffs, and even business closures. Put simply: New York’s $75 billion cash grab could destabilize not just national energy markets, but the entire economy.

The final economic issue is the hypocrisy permeating New York's law. As a massive consumer of natural gas, the state is attempting to shift blame to producers while ignoring its own emissions footprint. Why not tax Albany’s commuters instead? The cynical but likely answer is that they don't have billions of dollars the state can appropriate.

Embarrassing legal logic

Then there's the spurious legal foundation of New York's law, which runs head first into federal preemption. As The Firebreak has previously reported, when federal and state laws conflict, federal law takes precedence. The US Supreme Court has ruled (indeed in a suit filed by New York City) that the Clean Air Act (CAA) grants the EPA exclusive authority to regulate greenhouse gas emissions. New York's law is unconstitutional in the clearest sense of the term, as the Court has already explained to them at length.

The related issue is that New York’s law effectively taxes out-of-state companies (and only those companies) for actions beyond its borders, a power grab the Commerce Clause of the Constitution forbids. Here, too, the Supreme Court has repudiated the state's rationale multiple times. As Cornell University Law School has observed, the Commerce Clause has long been understood to serve as a prohibition

“against states passing legislation that discriminates against or excessively burdens interstate commerce. Of particular importance is the prevention of protectionist state policies that favor state citizens or businesses at the expense of non-citizens conducting business within that state.”

The science is so not settled

If its economic and legal aspects weren't farcical enough, the climate Superfund’s scientific basis is arguably worse. Blaming specific climate damages on individual companies relies on the nascent field of so-called “attribution science.” Even among mainstream climate researchers there is robust disagreement about our ability to pin discrete weather events on anthropogenic global warming generally.

Attributing specific weather events to the indirect carbon emissions of individual energy companies takes this fledgling field to another level of hubristic speculation. Bottom line: “Event attribution is not ready for a major role in loss and damage,” declared a 2023 article in Nature Climate Change.

This is readily observable in the language of New York's law. In a suit filed in federal court to block the legislation, 22 states observed that the Superfund Act empowers the New York Department of Conservation to determine whether an energy firm is “responsible for more than one billion tons of covered greenhouse gas emissions.”

But nowhere does the legislation stipulate when or how a company becomes responsible for these emissions, nor even how the emissions will be measured and apportioned. In other words, the whole operation is blatantly arbitrary, reflecting the squishy scientific foundation it rests on.

The way forward

Fortunately, New York’s fatuous scheming can be brought to a swift end. In line with the Trump Administration’s declaration that America faces an energy crisis, Congress should remind New York that states don’t have the authority to circumvent federal emissions regulation—end of story. Abundant energy improves the living standards of all Americans and helps ensure our national security. Agenda-driven state rules that undermine either cause belong in the trash can.