A Middlesex County lawsuit against leading energy companies has renewed the question: Can state and local governments regulate global emissions — and at what cost?
Judges across the country have repeatedly said no, this is beyond the purview of local courts and lawmakers, striking down legislation and litigation that aims to pin the blame for climate change on energy producers. Yet, New Jersey lawmakers continue to push that exact objective through the Climate Superfund Act. The proposal, which has been deemed unenforceable in New York, will raise energy costs for New Jersey households and do nothing to protect the planet. State legislators must recognize that penalizing private industries is not a substitute for thoughtful policymaking and reject the Climate Superfund Act.
New Jersey’s Climate Superfund Act would retroactively fine energy companies $50 billion for their alleged contributions to climate change. Bill sponsors claim that the legislation will “foster climate security for generations.” However, it penalizes energy producers in New Jersey, where only 0.3% of global emissions are produced. Compared to major emitters such as China, which alone accounts for a quarter of the world’s emissions, it is unlikely that the bill will have a marginal impact on the climate crisis.
Rather than employing a forward-thinking approach to climate policy, this bill targets companies that create jobs and supply essential energy resources needed to heat our homes and power our vehicles. This includes school buses, fire trucks, government buildings, and over 80% of NJ households, all of which are a part of the emissions equation. In turn, fines imposed on energy producers will affect consumers throughout the state, resulting in an increase of almost $700 per household in fuel and electricity costs each year.
In addition to the direct impacts on consumers, the Climate Superfund Act will also worsen New Jersey’s reputation as the least business-friendly state in the nation. The bill penalizes companies for activities that are both lawful and essential to powering our economy. This sends a message to other businesses that you can follow all the rules and still receive billion-dollar penalties.
New Jersey is projected to lose 9,700 jobs this year alone, with notable companies such as ExxonMobil, Mars, and Burlington all leaving the state. ExxonMobil, which could face substantial penalties under the bill, cited business and legal concerns when explaining its decision to redomicile from New Jersey to Texas earlier this year. Passing this bill will further encourage corporate flight, with other industries determining that the risk of doing business in the Garden State is too high.
The Climate Superfund Act also faces serious legal challenges, with multiple judges ruling that regulating emissions is outside the purview of state and local governments. New York’s Climate Superfund Law has been struck down twice by the Northern and Southern Districts of New York, with Chief Judge Brenda K. Sannes ruling that the law is preempted by the federal Clean Air Act and cannot be legally enforced. If New Jersey’s bill were to pass, the state would face similar lawsuits, wasting taxpayers’ money on litigation that the state is almost certain to lose.
Furthermore, state and local governments pursued similar claims against energy producers in court, but pivoted to legislation after their lawsuits were unsuccessful. Former Attorney General Matthew Platkin sued ExxonMobil, BP, Shell, and others in 2022, alleging that the companies misled the public. However, the suit was dismissed by a Mercer County Superior Court judge, ruling that “federal law governs and preempts state claims seeking damages for international emissions.” Former New York City Mayor Bill de Blasio also sued fossil fuel companies on similar grounds, but the lawsuit was blocked by the U.S. Court of Appeals for the Second Circuit and the New York State Supreme Court.
Attempting to solve the climate crisis through constitutionally questionable legislation and senseless litigation will drive away businesses, raise energy costs, and waste government resources. Rather than creating adversarial policies like the Climate Superfund Act, lawmakers should look to develop partnerships with energy producers that are developing lower-emission energy products and working towards real progress.
While other states seek to advance their own Climate Superfund Acts, New Jersey can demonstrate pragmatic leadership by rejecting this bill. State legislators must recognize that the Climate Superfund Act is a costly and legally uncertain approach to global emissions and instead focus on solutions that protect New Jersey’s economic future.
Elissa Frank is president of the New Jersey Civil Justice Institute; an organization solely focused on protecting business and taxpayers from excessive litigation.
