On behalf of the New Jersey Business & Industry Association, the state’s largest business association, I am writing to express our strong opposition to Senate Bill No. 3545, the so-called “Climate Superfund Act.”
There are five fundamental reasons why we oppose this legislation:
- It seeks to impose a retroactive assessment on companies who were providing a legal, necessary, and vital product to the citizens of the state;
- It assumes damages from the use of fossil fuels to the State of New Jersey that are not supported by the credible scientific evidence;
- It unfairly imposes retroactive liability on companies that were acting completely within the law, and were doing so to promote state and federal policies- for the benefit of the citizens of this state;
- It will drive up the cost to consumers both at the pump and in their utility bills; and
- It will do nothing to reduce greenhouse gas emissions or impact climate change.
Benefits of Fossil Fuels: The Other Side of the Equation – This bill presumes that fossil fuels have been dangerous to society, an issue I will address below. However, the bill totally ignores the fact that the use of fossil fuels has always been legal, its use has been aligned with both state and federal energy policies, and it has been essential in creating the modern world in which we live.
Everything about modern society, from life expectancy to the food we eat, the clothes we wear, and the cars we drive, are dependent on an abundant source of energy and for the last 100 plus years, that energy has come primarily from fossil fuels.
The world population in 1900 was 1.2 billion people. We are now over 8 billion people. Despite that growth, world life expectancy has more than doubled, from 32 years in 1900 to over 72 years today. Extreme poverty has decreased from 80% of the world population to under 10% today, despite this enormous population growth.
In fact, the big success of the last generation was that the world made rapid progress against the very worst poverty. The number of people in extreme poverty has fallen from nearly 1.9 billion in 1990 to about 650 million in 2018. This happened as economic growth reached more and more parts of the world, and that economic growth was fueled primarily from fossil fuels. I think it is also obvious to say that by taking people out of poverty, especially extreme poverty, we are saving many, many lives. If our goal is to help lift people from poverty and save lives, if we favor policies that benefit humankind, we need to recognize the role that energy, and fossil fuels, play.
And despite all the calls for, money spent, and efforts given to decarbonize our economy, fossil fuels are as necessary today as they were since 1995, the “covered period” provided in this bill. If fossil fuels are so harmful and not needed by society, we should just ban them today. We won’t, because everyone knows that given existing technologies, we can’t live without them, at least not without going back to a pre-industrial way of living.
Presumed Harm from Fossil Fuels – This bill is premised on the belief that the extraction and refining of fossil fuels, due to the emission of greenhouse gases, has had a deleterious effect on public health, the environment, and the economy. While we agree that greenhouse gas emissions may warm the planet and this has had and will have certain impacts on the planet, we disagree with the premise of this bill that these impacts are substantial and compensable.
This is not a controversial statement if you merely follow what the science says. Not being a climate scientist myself, I rely on the world’s leading experts from the Intergovernmental Panel on Climate Change (IPCC). In their most recent Assessment Report (AR6) published in 2021, the scientists of the IPCC laid out both what natural impacts have been detected and whether those impacts have been or will be able to be attributed to greenhouse gas emissions.
A chart of their findings is below.
As you can see, while heat waves have been moderately increased and we are experiencing more heavy rain, the flooding, storms, hurricanes, and other extreme weather events many have claimed to exist is just not supported by credible science. Even sea level rise, to date, has been predominantly a factor of the entire eastern seaboard “sinking” and not due to anything to do with climate change.
The claim of harm from fossil fuels that is the premise of this bill is not supported by credible science.
Retroactivity – This bill would impose retroactive liability on businesses for activities that were undertaken for the last thirty years. During that timeframe, the extraction, refinement, and use of fossil fuels was legal, as it remains today and, very likely, as it will remain in the foreseeable future. In fact, our Energy Master Plan, tax systems, and entire economy is structured on the availability and use of fossil fuels.
Courts generally disfavor the retroactive application of laws, especially when such application would be punitive. This bill attempts to tie itself to the structure of the Superfund law, which also has imposed retroactive liability for certain hazardous waste discharges. The New Jersey equivalent of Superfund, the Spill Compensation and Control Act, which actually predated Superfund and served as its model, also imposes retroactive liability for hazardous discharges. The New Jersey Supreme Court, in State Department of Environmental Protection v. Ventron, upheld the retroactivity of strict liability for those discharges. However, the Court did so because it found that the discharge of hazardous substances had always been known to be dangerous, was never authorized by law, and had always been compensable as a public nuisance. This is not the case with fossil fuels, which has always been explicitly legal, does not constitute a public nuisance, and its potential negative impacts are still very much in debate.
For these reasons, applying retroactive liability for a legal activity is likely unconstitutional, preempted by federal law, and should not be passed by the Legislature.
Cost – We don’t know what this bill will cost because there are no numbers attached. It is left up to the Department of Environmental Protection to determine damages and then somehow allocate liabilities. We believe there are no damages. The DEP may have different ideas given many of their unsupported public statements. New York, which is considering a similar bill, is seeking $75 billion, a number that the sponsor could not support with facts but found that it was “not too high, not to low.”
What we do know, is that if the Legislature enacts this bill it will drive up costs to consumers, both at the pump and in their utility bills. Advocates who claim you can impose billions of dollars of liabilities on businesses and not expect that to be passed onto consumers are either being disingenuous or fooling themselves.
At a time when affordability is top of mind for the electorate, is not the time to be driving up the cost of energy. And, of course, since our entire economy relies on fossil fuels, when their prices go up, so does the cost of food, goods and services, housing, and everything else that is dependent on fossil fuels.
No Impact on Future Emissions – It is obvious that this bill has nothing to do with reducing greenhouse gas emissions due to its retroactive nature. If we are concerned about climate change, and we should be, and if we want to ensure that have policies to lead us to a decarbonized future, we need serious policies that promote and incentivize new technologies and that lead to a cleaner energy future where energy remains affordable and reliable.
We should also note that we need to be careful in imposing significant economic harm and costs on our residents for policies that will have no impact on global greenhouse gas emissions and will not impact climate change. New Jersey is responsible for 1.7% of national emissions and 0.3% of worldwide emissions. It is difficult to comprehend, for the purposes of this bill, how anything the entities covered by this bill have done in New Jersey by way of GHG emissions has had any impact on public health or the environment of this state. As a legal matter, not only has no harm been demonstrated, as outlined above, but NJ’s emissions are so small compared to both global and worldwide emissions as to have no consequence.
Other issues with this bill involve the method of determining damages, allocating liabilities, the use of the monies, especially in ensuring they are not going into the General Fund, and the fact that the Legislature may attempt to do this again in another ten or twenty years.
For all the reasons above, we oppose this legislation and ask that the committee vote not to release it.
