Vermont becomes first US state to make Big Oil pay for climate damages

Vermont has become the first US state to order fossil fuel companies to pay for climate damages, handing a victory to campaigners pushing for polluters to be held more financially accountable.

The northeastern state is one of several where lawmakers have fought to pass bills that would hold oil and gas companies responsible for a portion of the region’s greenhouse gas emissions, and pass on the costs.

“Vermont just made history,” said Jamie Henn, a spokesperson for Make Polluters Pay, a climate campaigning group. “For the first time, a state is asking Big Oil to pay their fair share for climate damages.”

While the new law does not specify a dollar amount that companies should hand over, it orders the state’s treasurer to provide a report by January 2026 outlining the total cost of greenhouse gas emissions over roughly the past two decades to Vermont’s residents.

The assessment would be carried out along with the state’s agency for natural resources and would look at the effects of those emissions on public health, natural resources, agriculture, economic development and housing. 

Maryland, Massachusetts, New York and California have all pursued similar bills this year, but none have yet succeeded in passing their state legislatures. Broadly, the efforts are based on the long-standing “polluter pays” principle which is usually applied to companies that contaminate water supplies with chemicals.

The bills are tied to a fast-growing branch of science that looks to calculate the extent to which climate effects are tied to particular human actions. Scientists have developed methods for quantifying the historical emissions of specific sectors and companies.

Phil Scott, Vermont’s Republican governor, allowed the bill to become law without signing it, warning that “taking on ‘Big Oil’ should not be taken lightly”, and saying he was concerned about the costs of the small state taking on the industry alone.

The new legislation is likely to face costly legal challenges from fossil fuel companies. ExxonMobil did not immediately respond to a request for comment while Chevron declined to comment. The American Petroleum Institute, an industry lobby group, said Vermont’s law represented “yet another step in a co-ordinated campaign to undermine America’s energy advantage”.

Vermont’s law follows California’s move in September to sue several of the world’s biggest oil companies, including Exxon, Shell and BP, claiming they had deceived the public for decades about how the burning of fossil fuels was destroying the planet.

The civil lawsuit alleged oil and gas executives had known that relying on fossil fuels would have catastrophic results but had suppressed the information by pushing out disinformation about the topic. Their deception caused a delayed societal response to global warming, which has resulted in billions of dollars in damages including drought, sprawling wildfires and historic storms to California, it said.

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