Last May, Vermont became the first state to pass a “Climate Superfund” law. The concept is modelled after the 1980 federal Superfund law, which holds companies responsible for the costs of cleaning up their hazardous waste spills. The state-level climate version requires major oil and gas companies to pay for climate-related disaster and adaptation costs, based on their share of global greenhouse gas emissions over the past few decades. Vermont’s law passed after the state experienced torrential flooding in 2023. In December, New York became the second state to pass such a law.

This year, 11 states, from California to Maine, have introduced their own Climate Superfund bills. Momentum is growing even as Vermont and New York’s laws face legal challenges by fossil fuel companies, Republican-led states and the Trump administration. Lawmakers and climate advocates told Grist that they always expected backlash, given the billions of dollars at stake for the oil and gas industry – but that states have no choice but to find ways to pay the enormous costs of protecting and repairing infrastructure in the face of increasing floods, wildfires and other disasters.

We realized that these big fossil fuel companies were, frankly, not paying their fair share for the climate crisis that they’ve caused.

– Adrian Boafo, Maryland state delegate

The opposition “emboldens our fight more,” said Maryland state delegate Adrian Boafo, who represents Prince George’s County and co-sponsored a Climate Superfund bill that passed the state legislature in March. “It means that we have to do everything we can in Maryland to protect our citizens, because we can’t rely on the federal government in this moment.”

Attribution science spurs Climate Superfund movement

While the concept of a Climate Superfund has been around for decades, it’s only in recent years that states have begun to seriously consider these laws.

In Maryland, federal inaction on climate change and the growing burden of climate change on government budgets have led to a surge of interest, said Boafo. Cities and counties are getting hit with huge unexpected costs from damage to stormwater systems, streets, highways and other public infrastructure. They’re also struggling to provide immediate disaster relief to residents and to prepare for future climate events.

Maryland has faced at least $10 billion to $20 billion (all dollar figures are U.S.) in disaster costs between 1980 and 2024, according to a recent state report. Meanwhile, up until now, governments, businesses and individuals have borne 100% of these costs. “We realized that these big fossil fuel companies were, frankly, not paying their fair share for the climate crisis that they’ve caused,” Boafo said.

Recent bills have also been spurred by increased sophistication in attribution science, said Martin Lockman, a climate law fellow at the Sabin Center for Climate Change Law at Columbia University. Researchers are now able to use climate models to link extreme weather events to greenhouse gas emissions from specific companies. The field provides a quantitative way for governments to determine which oil and gas companies should pay for climate damages, and how much.

Vermont’s law sets up a process for the government to first tally up the costs of climate harms in the state caused by the greenhouse gas emissions of major oil and gas companies between 1995 and 2024. The state will then determine how much of those costs each company is responsible for, invoice them accordingly and devote the funds to climate infrastructure and resilience projects.

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New York’s law, by contrast, sets a funding target ahead of time by requiring certain fossil fuel companies to pay a total of $75 billion, or $3 billion per year over 25 years. The amount each company has to pay is proportionate to its share of global greenhouse gas emissions between 2000 and 2024. Both Vermont and New York’s laws apply only to companies that have emitted more than one billion metric tons of greenhouse gas emissions over their respective covered periods. That would include ExxonMobil, Shell and other oil and gas giants.

Two steps forward, one step back

Maryland’s law is so far the only Climate Superfund–related legislation to pass a state legislature this year, although Governor Wes Moore vetoed the measure late on Friday. The original draft of the bill would have required major fossil fuel companies to pay a one-time fee for their historic carbon emissions. But over the course of the legislative session, the bill was amended to instead simply require a study on the cumulative costs of climate change in Maryland, to understand how much money an eventual program would need to raise. The study would be due by December 2026, at which point Maryland lawmakers would need to propose new legislation to actually implement a Climate Superfund program.

“I wish it wasn’t amended the way it was,” Boafo said, adding that lawmakers devoted much of their energy this legislative session to addressing Maryland’s $3.3-billion budget deficit.

In a veto letter, Moore stated that Maryland’s “budget situation” and “chaos from Washington, D.C.” mean that the state needs to reconsider any bills that require resource-intensive studies. “We face a real and present danger from a White House that continues to attack our economy with reckless abandon,” Moore wrote. “In this time of profound uncertainty, we must evaluate every expenditure with a critical eye towards our future.”

Climate advocates decried the governor’s decision, calling it “an inexplicable reversal of a position that threatens to stymie Maryland’s climate progress for negligible budget savings.” In a joint press release by three environmental groups, Kim Coble, executive director of the Maryland League of Conservation Voters, said, “This veto is not fiscal responsibility, it’s a definitive step in the opposite direction of our climate goals.”

In California, environmental groups are optimistic about the chances of a bill passing this year. This is the second year a Climate Superfund bill has been introduced in the state, and the sponsors of the new bill have focused on building a broad coalition of environmental, community and labour groups around the proposal, said Sabrina Ashjian, project director for the Emmett Institute on Climate Change and the Environment at the UCLA School of Law.

This year’s legislation was introduced shortly after the devastating Los Angeles wildfires in January, which could amplify lawmakers’ sense of urgency. The bill has now passed out of each legislative chamber’s environmental committee and is awaiting votes in their respective judiciary committees. If passed, the bill will next move to the full Senate and Assembly for a final vote.

Legal battles centre on jurisdiction

In the meantime, legislators are keeping a close eye on ongoing legal challenges to Vermont’s and New York’s laws. In January, the U.S. Chamber of Commerce and the American Petroleum Institute, two trade groups, launched a lawsuit against Vermont’s Climate Superfund law. In February, 22 Republican state attorneys general and industry groups filed a lawsuit against New York’s law. Both challenges claim that the laws violate interstate commerce protections and are preempted by federal law. Because the federal Clean Air Act regulates greenhouse gas emissions, the groups argue, states cannot pass laws related to climate damages.

Now the Trump administration has joined the legal battle. On May 1, the Department of Justice sued the states of New York and Vermont over their Climate Superfund programs, echoing the same arguments raised by the fossil fuel industry. The same day, the department also sued the states of Hawaii and Michigan over their intentions to sue fossil fuel companies for climate-related damages.

All four lawsuits frequently use identical language, Lockman pointed out. The lawsuits follow last month’s executive order by President Donald Trump that called for the Justice Department to challenge state climate policies, and directly targeted Vermont and New York’s Climate Superfund laws. Shortly after the Justice Department’s lawsuits were filed, West Virginia and 23 other states announced they would join the existing lawsuit against Vermont’s law led by the Chamber of Commerce and the American Petroleum Institute.

Legal experts noted that Trump’s executive order itself has no legal impact and that states have well-established authority to implement environmental policies. Patrick Parenteau, a legal scholar at Vermont Law and Graduate School, told The New York Times he expected the Justice Department’s cases to be dismissed. A court could end up consolidating the federal suits with existing challenges against Vermont’s and New York’s laws, although given that they raise the same arguments, “there’s really nothing new being added here,” said Lockman.

Climate experts told Grist that with huge amounts of money and liability at stake, lawsuits from the fossil fuel industry weren’t unexpected. Boafo said that given how much financial and political support the Trump campaign received from oil and gas corporations, it’s not a surprise that the Justice Department has sued New York and Vermont. Pursuing these laws invites inevitable opposition – but avoiding the growing costs of climate devastation is even riskier, advocates said.

Lawmakers are “passing these bills because in writing budgets, in dealing with the day-to-day operation of their states, they’re facing really serious questions about how our society is going to allocate the harms of climate change,” said Lockman. “I suspect that the lawmakers who are advocating for these bills are in it for the long haul.”

This article originally appeared in Grist. It has been edited to conform with Corporate Knights style. Grist is a non-profit, independent media organization dedicated to telling stories of climate solutions and a just future. 

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Now the office, which offers financing to clean energy technologies that struggle to borrow from banks and received a huge boost of money from the Inflation Reduction Act (IRA), is rushing to do just that before president-elect Donald Trump takes office in January. The incoming president, flanked by Republican majorities in both chambers of Congress, is expected to target unspent funds under the IRA, including LPO programs – putting at risk billions of loan dollars yet to be granted or finalized.

With Inauguration Day looming, the office has increased its activity in recent weeks. Since last Monday alone, the LPO announced four new conditional commitments for loans and loan guarantees and finalized a pending offer.

On Tuesday, long-duration energy storage company Eos closed a $303.5 million DOE loan guarantee to help it scale production. The day before, the DOE stated it planned to lend up to $7.5 billion to finance two electric-vehicle battery-manufacturing plants in Kokomo, Indiana. And one week earlier, the agency announced a conditional loan guarantee of nearly $5 billion to finance Grain Belt Express Phase 1, an interregional transmission line that will run between Ford County, Kansas, and Callaway County, Missouri.

Last Monday, the agency also announced conditional commitments for a direct loan of $6.6 billion to Rivian to build an EV manufacturing plant in Stanton Springs North, Georgia, and a loan guarantee of $290 million to Sunwealth to deploy up to 1,000 solar photovoltaic systems and battery energy storage systems across 27 states.

Clean energy funding in doubt over expected Republican backlash

Under the Biden administration, LPO has so far doled out just under $55 billion in funding across 32 deals for battery and EV manufacturing, nuclear reactors, ​“clean” hydrogen facilities, virtual power plants and critical minerals projects. The majority of the LPO’s investments have gone to Republican districts, according to a Politico analysis.

Most of the financing deals LPO has announced – about $41 billion worth – remain conditional, meaning the loans or loan guarantees are not yet finalized and depend on the companies meeting certain benchmarks.

Legal experts say that while the LPO’s 14 closed loans, which total more than $13 billion in investments, should remain safe from Republican backlash, delaying or undoing conditional funds could be much easier. ​“Immediately following inauguration of the new president, there is likely to be a period of inaction on financial assistance awards that are in negotiation and on announced funding opportunities,” Hogan Lovells attorney Mary Anne Sullivan wrote.

A Republican-majority Congress could potentially roll back not-yet-obligated funding in order to help offset the costs of a likely extension of Trump’s 2017 tax cuts, which are estimated to add $4.6 trillion to the national debt over the next decade.

As of November 30, the office had 212 outstanding applications with a total of $324 billion in loans requested. In November, LPO raised its estimated remaining loan authority to nearly $400 billion.

The LPO was created in 2005 to support innovative clean energy projects – or in Shah’s words, to ​“build a bridge to bankability” for technologies that haven’t yet reached the at-scale deployment needed to attract commercial lenders. The Inflation Reduction Act supercharged the office’s lending authority, taking it from $40 billion to more than $400 billion.

It’s unclear what will end up happening to the loan program with a Republican trifecta in office. Project 2025, the Heritage Foundation’s blueprint for the next Republican president, proposes eliminating the LPO altogether. Billionaires Vivek Ramaswamy and Elon Musk, who have been tasked by Trump to lead a new task force called the Department of Government Efficiency, may also target the office in their sweeping proposals to slash federal programs and personnel. (Musk’s EV company, Tesla, received a $465 million loan from the office in 2010.)

Other lawmakers have suggested that the LPO could be reformed to finance more energy sources favoured by Republicans and Trump’s pick for Energy secretary, fracking company CEO Chris Wright, such as nuclear and geothermal. ​“The LPO needs to have all energy, if we go forward with it at all,” Representative Brett Guthrie, a Republican from Kentucky, told Politico’s E&E News.

DOE officials noted that local economic growth and jobs could be jeopardized should LPO investments be curtailed.

“There is steel in the ground and job openings at new or expanded facilities around the country,” a DOE spokesperson said in a statement. ​“It would be irresponsible for any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities spurred by LPO’s investments.”

This story was originally published by Canary Media. It has been edited to conform with Corporate Knights style.

Photo by Ajay Suresh.

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Energy experts told Grist that the pledge is a sign that energy efficiency, a relatively overlooked climate solution, is gaining momentum on the global stage. Compared to tripling renewables, energy efficiency — which the IEA defines as using less energy to achieve the same economic output — received far less attention leading up to this year’s conference. A recent climate deal between the U.S. and China, for example, didn’t mention doubling energy efficiency improvements, while a G20 statement from September only “take[s] note” of the target.

Yet according to the IEA, doubling the annual pace of energy efficiency progress would achieve 50 percent of the emissions reductions needed by 2030. That makes it the single largest measure toward capping warming at 1.5 degrees C. Reaching that goal would require shifting billions of cooking stoves off wood and coal to lower-emission fuels, reducing energy demand and consumption, and setting stricter appliance standards. This last target is especially essential as demand for air conditioning soars globally in the face of record-high heat.

Energy efficiency “doesn’t get nearly the focus it needs,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, a nonprofit research organization. “Efficiency and renewables should be like peanut butter and jelly. It’s hard to imagine one without the other.”

James Newcomb, a senior expert at the clean energy nonprofit RMI, said he’s not surprised that policymakers sometimes neglect energy efficiency. One reason could be human nature: People have a tendency to solve problems by adding stuff, rather than cutting back. This “additive bias,” as scientists call it, could make policymakers lean toward building large solar and wind farms instead of cutting back on energy use.

Another factor is that projects like renewable power plants create “concentrated pools of profits,” Newcomb said, making their benefits easily quantifiable. They’re also backed by industry groups. Energy efficiency measures, on the other hand, are implemented in a wide range of sectors, from buildings to transportation to appliances, and their benefits are far more distributed.

According to the IEA, global energy efficiency improved by about 2 percent in 2022. Doubling that means the world’s efficiency progress needs to hit an annual rate of 4 percent by 2030. So far, it’s heading in the wrong direction, with an estimated improvement of 1.3 percent in 2023.

To achieve the 4 percent annual goal, Nadel and other energy efficiency experts say that countries need to implement stronger building codes and retrofitting initiatives to equip buildings with better insulation, LED lighting, and more efficient water heaters. Newcomb said governments should also implement more efficient building designs to use less steel, concrete, and other materials in construction. Countries also need to scale up the adoption of electric vehicles, heat pumps, and other electric appliances, which use far less energy than their fossil fuel-powered counterparts. EVs are two to four times more efficient than traditional combustion engine cars, while heat pumps are up to five times more efficient than oil and gas boilers.

The IEA also calls for $8 billion in annual investments to expand developing countries’ access to “clean cooking,” which refers to cookstoves that use lower-emission energy sources like liquefied petroleum gas, electricity, and ethanol instead of traditional fuels like wood, coal, and kerosene. According to the agency, almost 2.3 billion people in 130 countries, primarily in Asia and sub-Saharan Africa, lack access to clean cooking.

Trying to solve everything through decarbonization, while going full-tilt with relentless increases in consumption, is really, really tough.

 

– James Newcomb, senior expert at clean energy nonprofit RMI

Another essential strategy is creating stricter efficiency standards for home appliances, vehicles, and other devices. Those standards are particularly important as global demand for air conditioning is projected to more than triple by 2050. As heat waves intensify as a result of climate change, access to air conditioning is increasingly a life-or-death matter. Yet most air conditioning units sold today, Newcomb said, do not use the most efficient technology possible due to cost constraints.

“Once purchased, these units stay in operation for years, sometimes decades,” said David Ripin, chief science officer at the Clinton Health Access Initiative, which is working to grow the market for energy-efficient ACs in low- and middle-income countries. “There is great urgency to make the most efficient units available with as little price premium as possible.”

All these energy efficiency measures will produce a slew of benefits, said Clara Camarasa, an energy efficiency policy analyst at the IEA. The agency’s analysis found that doubling the annual rate of energy efficiency progress would create 4.5 million jobs worldwide in building retrofitting, transportation, and other sectors, and potentially cut energy bills by a third in advanced economies like the U.S.

The IEA also singled out behavioral changes — like taking fewer flights, using more public transit, and using less energy for heating and cooling — as another way to reduce energy demand. Newcomb said it’s a reminder that managing energy consumption, alongside a build-out of renewables, is an essential part of reducing global emissions.

“Trying to solve everything through decarbonization, while going full-tilt with relentless increases in consumption, is really, really tough,” he said.

This article originally appeared in Grist at https://grist.org/cop28/the-overlooked-climate-solution-making-headway-at-cop28-doing-more-with-less/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

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