The U.S. Chamber of Commerce and a major oil and gas industry trade group have filed a federal lawsuit against Vermont over its new law that mandates fossil fuel companies to pay for the damages caused by climate change over several decades. The lawsuit argues that the state law is preempted by the federal Clean Air Act and violates the U.S. Constitution. The Chamber and the American Petroleum Institute claim that the federal government is already addressing climate change and that it is impossible to accurately measure the impact of emissions from individual sources over decades.

Vermont became the first state to enact such a law after experiencing severe weather events. The state is working to estimate the costs of climate change dating back to 1995. Under the law, the state treasurer will issue a report on the total cost of greenhouse gas emissions to Vermonters and the state by 2026. The funds collected from fossil fuel companies will be used for infrastructure projects to mitigate climate change effects.

The lawsuit has drawn interest from other states like New York, where a similar bill was signed into law by Governor Kathy Hochul in December. The New York law requires companies with significant greenhouse gas emissions to contribute to a state fund for infrastructure projects to address climate change damages.