OPINION
This week, a federal judge in New York struck down the state’s Climate Change Superfund Act. Lawmakers here in New Jersey should see this as a blaring alarm as they consider a similar policy that would waste taxpayers’ dollars in drawn out legal battles and ultimately drive-up costs for everyday New Jerseyans if the law were to survive in court.
The Climate Superfund Act, A3735, is remarkably similar to its doomed predecessor in New York. Both would seek retroactive assessments on fossil fuel companies to establish a fund worth tens of billions of dollars to address environmental needs. That sounds good on paper, but the legislation would allow companies that followed all existing laws and that have exhibited no negligence to be penalized. As Judge Brenda Sannes pointed out in her decision, the federally authorized Clean Air Act supersedes such a policy, writing, “The court finds that the Climate Act is simply beyond the limits of state law.”
Understanding that the legislation includes a fatal flaw already determined by a federal court, New Jersey lawmakers should be asking themselves, why would New Jersey be any different?
In fact, New York isn’t the only state New Jersey can look for guidance on whether or not moving forward on the Climate Superfund Act is a prudent use of taxpayer dollars. Vermont is currently defending its own superfund law in federal court too. The message is loud and clear, if the Climate Superfund Act passes in its current form, New Jersey will find itself in a costly legal battle, a legal battle that our closest neighbor to the north just lost in federal court.
And in addition to the issue of federal preemption, there are a number of other legal questions surrounding superfunds that are sure to keep litigation coming for states pursuing this novel policy idea. In fact, in the Vermont suit, two dozen other states have intervened to oppose Vermont’s superfund law on multiple legal grounds including interstate commerce and extraterritorial reach.
If the Climate Superfund Act, as written, makes it through years of litigation at taxpayers expense to become law – will the juice be worth the squeeze? There are a few important points to answer this question starting with the main reason the New York version was just struck down: the bill unfairly penalizes companies who followed the law and committed no negligence. As the bill’s proponents proudly declare, it will go after “any major fossil fuel entity that operates in New Jersey.” The state might as well put up a huge billboard that says, “Closed for Business: If you follow the laws we’ll still sue.” This will have a dire effect on New Jersey’s economy that will be felt by everyone as all businesses, not just fossil fuel companies, reconsider doing business here. Businesses that create jobs, pay taxes, and contribute to the state through innovation and construction will bring those benefits elsewhere.
Another question is will the fossil fuel companies really be the ones footing the bill? In its current form, the outlook doesn’t look good. The fact is that we still rely on fossil fuels. They heat our homes, run our cars, and are cost drivers in virtually every industry. The costs may initially be assessed to a select group of companies, but history tells us those costs are likely to be passed on to consumers and small businesses across the state making New Jersey more expensive to live and do business in.
And those rising costs will impact the businesses that do stay in New Jersey causing adverse effects on things like major infrastructure projects. As my colleague William Mullen, President of the New Jersey State Building and Construction Trades Council explained last month in describing the ripple effect A3735 will have on the New Jersey economy and infrastructure projects, “When the cost of infrastructure increases, projects are delayed, reduced in scope or abandoned altogether. Every additional dollar spent on energy, materials and transportation is a dollar that cannot be invested in schools, roads, bridges, water systems, public transit and other critical priorities.”
Let’s be clear, tackling the climate crisis is crucial. Investing in clean energy, green infrastructure, and environmental rehabilitation projects are vital in the survival of our planet. Such investments also create good-paying union jobs, strengthen communities, and help grow the economy. There may be a version of the Climate Superfund Act that accomplishes these goals, but what’s working its way through the legislature right now is not it.
Mark Longo is the director of the Engineers Labor-Employer Cooperative (ELEC), which is affiliated with the International Union of Operating Engineers Local 825.