Buffalo News Another Voice: Superfund Act is unable to assess largest fossil fuel producers

October 3rd, 2024

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The Climate Change Superfund Act, which passed the New York State Legislature in June of this year, aims to place $75 billion in surcharges on fossil fuel producers.

The reasoning behind the Climate Change Superfund Act is that the largest producers of fossil fuels should be liable for the greenhouse gas emissions resulting from their production. Unfortunately, the legislature passed a bill so flawed that it would be irresponsible for Gov. Kathy Hochul to sign it.

In upstate New York, the ability to heat our homes with natural gas, propane, and home heating oil is the difference between life and death — so much so that the state has subsidized, directly and indirectly, the use of fossil fuels for home heating for years. It is difficult to fathom the magnitude of the ill-advised logic that would punish those who provide the fossil fuels so necessary to our survival.

While the legislation claims to hold the largest producers liable, there does not appear to be a mechanism to assess the world’s number one source of carbon emissions – China’s state-run coal production.

From 2016-2022, China alone was responsible for one-quarter of the world’s carbon emissions. The inability to assess the largest global producers completely contradicts the bill’s stated intent, raising serious questions about the potential for unequal and arbitrary application to those who can be assessed easily rather than the largest producers.

Moreover, nation-states and state-owned companies comprise 64% of global emissions. Many of these entities don’t export to the United States or are currently prohibited from selling into the United States market, and even if they did or could, it is unclear how New York would assess them. The largest oil importers into the United States come from Canada at 60%, followed by Mexico at 10% and Saudi Arabia at 7%. While it is not clear how much of their products are consumed in New York State or what the nexus would be, Pemex (Mexico) and Saudi Aramco (Saudi Arabia) are state-owned companies.

Even more unlikely than New York’s ability to assess state-owned companies is New York’s ability to assess sovereign nation-states. Legal and logistical uncertainties raise serious doubts over whether New York State could assess the world’s largest producers, especially nation-states like China, Russia, and Iran.

While it may be possible to construct a rational framework to assign costs for the negative externalities related to the production of fossil fuels, the Climate Change Superfund Act is not it.

We should learn the lessons from a hastily passed Climate Act in 2019, which has resulted in increased costs in energy bills and placed constraints on abundant and affordable sources of energy and placed grid reliability at risk. New Yorkers still rely on fossil fuels to get to work and heat their homes. As if that wasn’t enough, the arbitrary nature of who would be assessed doesn’t align with the bill’s rationale since it is highly dubious whether a mechanism exists for New York State to assess the very largest producers in the world.

As a result, the net impact will be that the largest producers, like China, are left alone while everyday New Yorkers are forced once again to shoulder the increased costs that are passed down to them, potentially leading to financial strain and a significantly reduced quality of life.

Justin Wilcox is executive director of Upstate United, an economic advocacy coalition.