Sen. Raj Mukherji speaks at a rally in Trenton on Sept. 30, 2024, in support of the Climate Superfund Act, which would require fossil fuel firms to pay for economic damages borne of climate change. (Courtesy of Food & Water Watch)
A coalition of climate groups rallied in Trenton Monday to urge the passage of a bill that would require companies that have produced fossil fuels since 1995 to pay for economic damages borne of climate change.
They said investment is needed to ensure the state reaches its ambitious climate goals of drawing 100% of its power from renewable sources by 2035 as storm systems grow more severe — and more economically damaging.
“New Jersey has already seen worse effects than other places. By 2050, we could face sea levels a foot higher than today, and 240,000 New Jersey homes could either be underwater by then or battered by climate-driven storms,” Sen. Raj Mukherji (D-Hudson) told the roughly 50 rallygoers.
The rally came as parts of the South are struggling to recover from the devastation of Hurricane Helene and its aftermath.
The New Jersey bill would require firms that mined fossil fuels or refined crude oil, or their corporate successors, to pay damages to the state if the Department of Environmental Protection finds they were responsible for more than 1 billion metric tons of greenhouse gas emissions since 1995.
The Treasury would determine the total amount of money to be recouped through damages by calculating the effect greenhouse gas emissions have had on residents’ health, the state’s natural resources, and flooding risks, among other factors.
“Our planet is in crisis, and we must act now to protect the health and well-being of our communities,” said Sen. Britnee Timberlake (D-Essex).
Firms fined under the proposal would face strict liability, meaning the program would not consider the intent of a given polluter when determining fines, and would pay damages to the state proportional to their emission impact.
Ray Cantor, deputy chief government affairs officer for the New Jersey Business and Industry Association, which opposes the bill, warned retroactively imposing liability on fossil fuel producers would be “fundamentally unfair.”
“It’s dealing with products that are really not banned. They’re legal products, and moreover, they’re essential for our way of life. Otherwise, legislatures and agencies would ban them now,” he said.
Money collected from the fines would flow into a dedicated fund that would pay for climate resilience projects and could be invested to earn interest before their disbursal.
The bill, which has not reached committee hearings in either chamber since being introduced earlier this month, would allow fined firms to pay damages as a lump sum or in installments over nine years, with the first year’s payment equal to 20% of their total liability and 10% in subsequent years until the fine is paid.
It’s unclear how much revenue the law would generate or what level of fines businesses can expect.
A similar proposal in New York that awaits Gov. Kathy Hochul’s signature would assess $75 billion in fines over 25 years, but New Jersey’s proposal adopts a separate structure that would leave the program’s total fines unknown for some time.
Vermont, which approved a nearly identical law in May, is still drafting a methodology to apply penalties on fossil fuel producers.
New Jersey’s bill would give the Treasury two years to figure out its own framework. Cantor warned that customers would end up paying for any costs the bill would levy on businesses.
“Any charge you do, however they come up with a formula, is only going to be passed onto consumers, so we end up paying for this at the end of the day,” he said.
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