Climate Change Cost Recovery (S.259) - March 21, 2024

Ben Edgerly Walsh (Climate & Energy Program Director, VPIRG) testified on S.259 in the Senate Finance Committee on Thursday afternoon.

He shared in his presentation that VPIRG supports this bill because the cost of the climate crisis is “staggering”, and Vermonters should not be responsible for “shouldering the burden.” They see this legislation as a medium to long-term strategy. The legal process will take years, as will the rule-making process.

NOTE: We agree that Vermonters should not have to shoulder the burden of fighting climate change alone or paying for remediation. These costs should be shared. Unfortunately, they are not shared equally today at the national or international level.

He pointed out that the largest fossil fuel companies make “billions in profits.” The state got hit hard by storms this past year made worse by climate change. Those companies should “pay their fair share,” he stated.

NOTE: The sentiment is agreeable, but we need to find a way of taking penalties out of profits instead of passing those costs through to customers. This may not be something we can do at a state level.

Chairwoman Cummings cautioned committee members not to say anything that can be used against them in a court of law.

NOTE: Such as admitting that they are viewing this as a tantalizing new revenue source.

Walsh admitted that he didn’t know the legal standards. But there is “a lot of documentation” that the oil companies knew about the dangers of fossil fuels. The formula comes down to a specific amount of emissions released during the specified period based on the amount of extraction and refinement by the companies.

Senator Ram Hinsdale wondered if the state could handle this, “people are really going to have to trust this calculation,” she stated. “It seems daunting.”

Michael Pieciak (Vermont State Treasurer, Office of the State Treasurer) testified next. He shared that when it comes to calculating the cost, looking at how climate is impacting the insurance industry and projecting those calculations out 30 years (typical amortization period) is likely how they would handle it. However, that’s just one piece of a larger calculation. They also need to understand how climate has affected other industries. The Treasurer’s office has asked for $300,000 to hire consultants to do this work.

Senator Bray wanted to know what kind of money they we going to see. Pieciak responded that it’s premature to ask for a number or even a range. However, just the flooding from July cost the state “tens of millions of dollars.” Then there are the impacts on the agriculture and the ski industries, etc. So, it’s a significant number.

Bray interjected that they had “estimated the cost of July flooding at a billion.”

Ram Hinsdale added that heat waves are the deadliest form of climate disasters. She wondered how they would be able to calculate that. Vermont is particularly vulnerable, she claimed, because we don’t have adequate A/C infrastructure. Pieciak clarified that there’s no way to calculate the value of human life, but you can get at this with an insurance type calculation.

There was a motion to move Draft 2.1 of the bill. It was approved 6-1-0.

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