April is known as “Earth Month” — a hat tip to the annual Earth Day celebration and to welcoming warmer temperatures and first flowers. Yet April is also a month of financial anxiety, with Tax Day upon us.
This month, while New Yorkers file their returns, our representatives in Washington may be scheming to raise New Yorkers’ taxes by billions of dollars to protect the biggest oil companies.
As reported in the The Wall Street Journal, the oil industry has met with the president and congressional leaders to both overturn New York’s landmark Climate Change Superfund Act — a law that holds the worst polluters financially accountable for the damage caused by climate change — and more generally to block environmental litigation.
That meeting resulted in an executive order signed by President Donald Trump that attacks the state’s Climate Superfund law. While legal experts view the order as unenforceable, clearly the administration to siding with the oil industry against New York.
Let’s be clear about what this means: the oil industry wants the President and Congress to stick New Yorkers with the bill for climate disasters they helped cause.
First, some background. New York’s recently enacted Climate Superfund is a mechanism to ensure that state and local taxpayers are not on the financial hook for 100% of the damages caused by severe storms, rising sea levels and hotter temperatures. Currently, New Yorkers are paying billions in climate-related damages. There is zero doubt that those costs will continue to rise for the foreseeable future.
The question is should state taxpayers pay all of those spiraling costs?
The oil industry has known for decades that the burning of fossil fuels contributes to rising temperatures and they were well aware of all the havoc that would cause. Yet, instead of being responsible members of civil society, they spent years bamboozling the public and lawmakers by denying the science and downplaying the dangers.
Now the bills are coming due. Here are some examples facing New York: Recent estimates put the price tags at $52 billion to protect NYC Harbor; $100 billion to upgrade New York city’s sewers to handle more intense storms, $75-$100 billion to protect Long Island; and $55 billion for climate costs outside of New York city. The state comptroller has predicted that more than half of local governments’ costs will be attributable to the climate crisis.
As you can see, the costs will be staggering, yet they are costs that must be paid. New York has decided that the companies most responsible for the emissions of greenhouse gases should pay their share. Thus, the Climate Superfund requires the largest oil companies to pay New Yorkers $3 billion annually for each of the next 25 years to offset these costs.
It does so in a way that ensures that the companies cannot pass these costs on to the public.
According to an analysis by the Institute for Policy Integrity at the NYU School of Law, companies’ payments would be based on historical greenhouse gas emissions, so oil companies would have to treat these as one-time fixed costs. “Regardless of market structures, oil companies are unable to pass on increases in fixed costs to consumers due to economic incentives and competition.” Nobel Prize Economist Joseph Stiglitzagrees that the Superfund Act will NOT raise the price of oil on consumers as that is set by the global market. Businesses support the Climate Superfund, too.
If the oil industry is successful, that annual $3 billion assessment will be charged back to state and local taxpayers — either through a massive increase in taxes or draconian cuts to government-provided services.
Let me reiterate: These climate costs have to be paid, there is no getting around it. Should the public pay all of these costs? New York says no. Should the president and/or the congress overturn that decision?
We will all soon know the answer to that question. New Yorkers deserve protection. Gov. Kathy Hochul and Attorney General Letitia James should fight to block the president’s order. And the Congress must reject any attempt to overturn the Climate Superfund Act. Doing otherwise would not only let polluters off the hook, but it would make Tax Day more unpleasant in New York.
Blair Horner is with the New York Public Interest Research Group, or NYPIRG.