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Bill to make polluters pay for climate damage runs into Democratic skeptics


Bill to make polluters pay for climate damage runs into Democratic skeptics

Feb 21, 2024 | 6:45 am ET
By Josh Kurtz
Bill to make polluters pay for climate damage runs into Democratic skeptics
Critics say that PJM, which is responsible for coordinating the flow of electricity in 13 states and the District of Columbia, should have been prepared for the retirement of the coal-fired Brandon Shores Power Plant in Anne Arundel County. Photo by Mark Wilson/Getty Images.

A bill to make fossil fuel companies pay for Maryland’s climate degradation ran into some skepticism Tuesday at its first public hearing of the General Assembly session — from climate-friendly Democrats.

The RENEW Act of 2024 — Responding to Emergency Needs from Extreme Weather — seeks to levy penalties on the 40 biggest emitters of greenhouse gases in Maryland over the past two decades — and use the funds for an array of climate mitigation, resilience and adaptation initiatives.

“This is an essential piece of legislation that will generate hundreds of millions of dollars a year for a cleaner, more sustainable Maryland for years to come,” the bill’s sponsor, Sen. Katie Fry Hester (D-Howard and Montgomery), told her colleagues on the Education, Energy and Environment Committee. “It has become the Maryland taxpayer’s responsibility to pay for environmental damage caused by polluters. Not anymore.”

Hester was accompanied at Tuesday’s bill hearing by an array of advocates and experts who gave dramatic testimony about the impact of climate change in Maryland — particularly its ravaging effects on poor and underserved communities. U.S. Sen. Chris Van Hollen (D-Md.) offered written testimony in support of the bill, which is similar to national legislation he has introduced on Capitol Hill.

“Both bills are based on a simple principle also used in national superfund legislation — that companies that have caused harm should bear the costs of repairing that harm, not taxpayers,” Van Hollen wrote.

Hester estimated the bill would generate $900 million a year in revenues over the course of a decade, enough to pay for several of the state’s most ambitious climate initiatives. None of the 40 companies targeted in the legislation are based in Maryland, Hester said,

But a few lawmakers expressed skepticism about the bill, including its impact on the state’s energy marketplace, whether the funds would reach the communities that needed them most, and whether the bill’s costs would be borne by consumers.

“I’m very concerned about passing a $9 billion cost to Marylanders in a very regressive way, and not very targeted,” said Sen. Malcolm Augustine (D-Prince George’s).

Hester replied that the bill was necessary to compensate low-income communities that have been hurt most by climate change. And she argued that even if fossil fuel companies face massive payments to the state they are unlikely to pass those costs along to consumers, because their prices would then be higher than the rates for energy offered by competitors who aren’t subject to penalties.

Sen. Ron Watson (D-Prince George’s), a co-sponsor of Hester’s legislation, said he worried that the bill would compel energy companies to stop doing business in the state, which could impact the energy supply in the state.

“We have a reliance on these companies,” he said. “We’re going to continue to have a reliance on these companies.”

Watson said he saw the logic of Van Hollen’s national legislation but wondered why “a teeny, tiny state” like Maryland would want to unilaterally go after polluters when environmental destruction comes from myriad sources and happens everywhere. Advocates said that three other state legislatures — in Massachusetts, New York and Vermont — are considering similar legislation but haven’t moved those bills yet.

“The question is, why would we wait?” Hester asked.

Some of the advocates who testified referenced a recent poll that showed 72% of Maryland voters are concerned about climate change and that 48% would look favorably on legislators who supported a measure like the RENEW Act.

“The poll data was fascinating,” said Sen. Cheryl C. Kagan (D-Montgomery), the vice chair of the committee and a co-sponsor of the bill. “It should be obvious, but we’ve really gotta take action.”

But Augustine appeared irritated by the advocates’ use of the poll to buttress their arguments. “Should we work on things based on polls or based on facts?” he asked.

Jennifer Laszlo Mizrahi, a member of the Maryland Commission on Climate Change, replied that the poll was useful because it showed voters could be persuaded to support these measures and because it also showed that many Marylanders were unaware of existing climate mitigation efforts and the necessity to fund them.

“This [bill] is money from people who put profit over human beings,” she said.

Beyond the ten people who testified in favor of the bill, several more individuals and organizations submitted written testimony in support, including Attorney General Anthony Brown (D), whose office has determined that the measure is constitutional and that the state would be authorized to collect damages from polluters.

No opponents testified in public Tuesday, but at least one ExxonMobil lobbyist from Washington, D.C., sat in the audience, and representatives of the American Petroleum Institute (API) and the Maryland Chamber of Commerce offered written testimony in opposition.

“While API appreciates the goal of funding environmental programs, this legislation is not the way to effectuate this objective,” the group wrote through its State House lobbyist, Bernie Marczyk. “API believes it is bad public policy and may be unconstitutional. Among other things…API is extremely concerned that the bill: retroactively imposes costs and liability on prior activities that were legal, violates equal protection and due process rights by holding companies responsible for the actions of society at large; and is preempted by federal law.”

The chamber, in a statement from a government relations associate, Hannah Allen, expressed concern that the legislation sought to collect damages from companies for business practices that began in 2000.

“Reaching back 24 years is extremely harsh and excessive, along with imposing potential liability of up to $9 billion on prior activities that were legal,” Allen wrote. “Additionally, businesses should not be held liable because fossil fuels they extracted or refined were placed into the marketplace and used by a third party.”

Environmental advocates are cautiously optimistic that the bill will get through the Education, Energy and Environment Committee, where it needs six votes. Six of the committee members, including Watson, are co-sponsors of the bill. The bill must also get through the Senate Finance Committee, though no hearing is scheduled there. A member of Finance, Sen. Antonio Hayes (D-Baltimore City), sat through part of the hearing as an emissary from that panel.

The House version of the legislation, sponsored by Del. David Fraser-Hidalgo (D-Montgomery), is up for a hearing in the Economic Matters Committee on March 7. The House Environment and Transportation Committee will also have a say.