Van Hollen Leads Senate Democrats in Announcing New Legislation to Make Polluters Pay for Climate Damage

September 10, 2021

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(Office of Senator Chris Van Hollen (D-MD)) U.S. Senator Chris Van Hollen (D-Md.) – joined by Senators Bernie Sanders (I-Vt.), Ed Markey (D-Mass.), Sheldon Whitehouse (D-R.I.), Elizabeth Warren (D-Mass.), and Jeff Merkley (D-Ore.) – announced new legislation to require the biggest polluters to begin paying their fair share for a just clean energy transition. The legislation, titled the Polluters Pay Climate Fund Act, requires the largest U.S.-based fossil fuel extractors and oil refiners and foreign-owned companies doing business in the U.S. to pay into a Polluters Pay Climate Fund based on a percentage of their global emissions. The Fund would then be used to finance a wide range of efforts to tackle climate change. The House companion legislation will be led by Congressman Jamaal Bowman (D-N.Y.).

“For years, fossil fuel companies have made trillions in profits while spewing carbon pollution that wreaks havoc on our environment and harms the public health. Now, every American is paying the price – from rising health costs to increasingly expensive climate mitigation efforts for everything from flooding to droughts to sea-level rise. Our idea is simple: those who pollute should pay to help clean up the mess they caused – and those who polluted the most should pay the most. This bill will ensure the costs of climate change are no longer borne solely by the American people – and instead require big corporate polluters to pay part of the clean-up bill,” said Senator Van Hollen

“At a time of unprecedented heatwaves, drought, flooding, extreme weather disturbances and the acidification of the oceans, now is the time for Congress to make certain that the planet we leave our children and future generations is healthy and habitable,” Senator Sanders said. “For decades, the fossil fuel industry knowingly destroyed our planet to pad their short-term profits. We must stand up to the greed of the fossil fuel industry, make fossil fuel corporations pay for the irreparable damage they have done to our communities and our planet, transform our energy system and lead the world in combating climate change. That is exactly what this legislation will do.”

“For too long, the companies that pollute our planet have turned massive profits, while the American people have been left to face the health, climate, and economic consequences. Big Oil and the fossil fuel industry have played an active role in causing the worsening climate crisis, but our communities—and not these companies—are paying the price,” said Senator Markey. “That’s why our legislation, the Polluters Pay Climate Fund Act, would take much-needed and long-overdue action to have fossil fuel companies pay their fair share in order to fund the federal response to the climate crisis they helped cause.”

“A relatively small number of the world’s largest corporations have been responsible, knowingly, for an outsized percentage of the pollution driving climate change,” said Senator Whitehouse. “‘Clean up your messes’ is a principle that must apply to companies for the damage they’ve inflicted on the planet. The fund would provide resources to help communities adapt to the floods, wildfires, and other natural disasters linked to climate change.”

“Fossil fuel companies have spent decades fanning the flames of climate chaos—while increasingly extreme wildfires, hurricanes, floods, and heat waves continue threaten the lives and livelihoods of millions of Americans,” said Senator Merkley. “It’s time to put the health and well-being of our families and our economy ahead of fossil fuel executives’ wish lists. That means we must finally make the fossil fuel industry pay its fair share and help us tackle this crisis head on.”

“From devastating floods to suffocating smoke, climate impacts are outpacing the already dire predictions of scientists - and hitting redlined and marginalized communities the hardest. Yet we continue to prop up a fossil fuel industry whose pollution is killing millions of people around the world, and that bears the most responsibility for a crisis that is threatening the future of humanity. We have the research basis and grassroots support to make these corporations pay in accordance with their contribution to the climate emergency. We must take action now, and invest that money in a just, renewable-powered future for all,” said Representative Bowman.

This legislation is supported by a diverse group of advocacy organizations and stakeholders, including: Working Families Party, League of Conservation Voters, Chesapeake Climate Action Network and CCAN Action Fund, Sunrise Movement, People’s Action, 350.org, Greenpeace USA, Center for Popular Democracy, Hip Hop Caucus, Union of Concerned Scientists, New York Communities for Change, Center for Climate Integrity, and Zero Hour.

Background on the Proposal:

Congress can generate significant revenue to address our climate challenges by turning to the industry that caused them. Using peer-reviewed “carbon attribution” research, it is possible to definitively attribute carbon and methane in the atmosphere to specific companies like ExxonMobil, Chevron, and Shell. Using this methodology, Congress can establish a Polluters Pay Climate Fund that assesses companies based on their contribution to global emissions and appropriate the funds to ensure a just climate transition. Fossil fuel companies have never been held to account for the societal costs of their emissions. Instead, they have profited for generations from a damaging business model and have benefited from federal subsidies for their operations. It’s time for them to contribute to the climate response.

The Polluters

The payors into the Polluters Pay Climate Fund would be U.S.-based fossil fuel extractors and oil refiners and those foreign-owned companies doing business in the U.S. that were responsible for at least 0.05% of the total carbon dioxide and methane gas emissions between January 1, 2000 and December 31, 2019. This would limit the total number of payors to the 25-30 biggest polluters, with those who polluted the most paying the most.

Responsibility to pay would be based on a strict liability standard – there is no requirement to prove negligence or intentional wrongdoing. The proposal does not assign blame for specific damages – it simply ensures that these companies contribute to the solution.

The Assessment

Addressing the threat of climate change requires investments – to rebuild infrastructure to protect against rising sea levels and extreme weather events; to support communities that have suffered disproportionately from degradation of the environment; and to power the transition to renewable energy, including research, deployment, and workforce training. These investments are an opportunity for a cleaner and more equitable future. Fossil fuel companies should contribute a fair share to that transition.

The Polluters Pay Climate Fund Act would set that share at $500 billion over 10 years. The Department of Treasury, in consultation with the Environmental Protection Agency, would use established techniques to determine shares of emissions based on publicly-available data on past production. If companies wanted to dispute the agency’s determination, they would have the opportunity to do so.

Ultimately, each of the top-polluting companies would receive a bill from the Treasury every year for 10 years that accounts for a proportional share of emissions.

With a $500 billion assessment over 10-years, the biggest polluters – companies like ExxonMobil, BP, Shell, and Chevron – would likely be assessed about $5-6 billion a year. For all but one of the five largest payors, that would equate to less than 3% of their gross receipts.

Congress has a clear right to require members of an industry to help fund a response to a problem caused by that industry.

Impact on Consumers

Under economic principles accepted across the ideological spectrum, the assessment would not be passed on to consumers. The assessment is based on past, not current, activity, so it does not impact the ongoing costs of production. It is charged to those with the highest past production, leaving some companies that are not subject to the assessment to act as price competitors and rivals for market share. And any attempts to collude to set a higher price would be illegal – and unlikely to attract companies that aren’t covered by the Fund or have a lower pro-rata payment and a market-based incentive to undercut those who raise prices.

Instead, the costs would be borne by the corporations and shareholders who have reaped massive profits for decades. And the revenue in the Polluters Pay Climate Fund, could, among other purposes, actually help offset costs for consumers during the transition to clean, renewable energy generation.

A white paper on the proposal is available here.

The draft discussion text is available here.

The draft discussion section-by-section is available here.

Support for the Proposal:

“Polluters should pay their fair share for the damage they cause, period,” said Sara Chieffo, LCV Vice President of Government Affairs. “This is especially true when it comes to the catastrophic costs of the climate crisis -- from extreme heat, fires, droughts, storms and floods to long-standing environmental injustice, the actions of polluters are having devastating impacts. We commend Senators Van Hollen, Markey and Sanders for the Polluter Pays Climate Fund – an important addition to the debate going on right now in Congress.”

“The corporations responsible for fueling and profiting off of the destruction of our communities and climate must be held responsible,” said Lauren Maunus, Advocacy Director of Sunrise Movement. “We’re grateful for Senators Van Hollen, Markey and Sanders’ leadership on the Make Polluters Pay Act to ensure that fossil fuel companies like Exxon, Shell, and Chevron pay their fair share towards the national mobilization to stop the climate crisis, clean up pollution, and create millions of good, union jobs in a renewable energy economy.”

“Look around and you can see our planet burning, melting, and flooding in real-time -- and it's hitting Black and brown working-class communities the hardest,” said Natalia Salgado, Director of Federal Advocacy at the Working Families Party. “It is past time for the multinational companies responsible for all this suffering to pitch in and help clean up their mess.”

“It's no secret that major oil companies have profited obscenely by dumping climate change impacts on vulnerable states like Maryland and our Chesapeake Bay. Senator Chris Van Hollen's new bill -- the 'Polluters Pay Climate Fund' -- will at last bring $500 billion worth of overdue compensation to us and citizens nationwide,” said Mike Tidwell, Director, Chesapeake Climate Action Network and CCAN Action Fund.

??"For decades, oil and gas giants lied about their role in causing climate change while taking billions in subsidies from taxpayers, often paying little or no taxes themselves,” said Richard Wiles, Executive Director of the Center for Climate Integrity. “With hundreds of lives lost in climate-fueled disasters this year alone, polluters need to pay their fair share to help the nation speed the transition to clean energy."

"Oil companies knew for decades their product was killing the planet. We need both litigation and legislation to address these crimes against humanity. Senator Chris Van Hollen's bill -- the 'Polluters Pay Climate Fund' -- is a $500 billion step in the right direction on the legislative side,” said Rev. Lennox Yearwood, CEO of the Hip Hop Caucus. “It prioritizes investments in disadvantaged communities hit hardest by runaway global warming. While this bill won't fully solve the climate crisis, it's an overdue first step toward full justice."

“Communities are grappling with severe climate impacts, including stronger hurricanes, extreme flooding, and more devastating wildfires—burdens almost impossible for disadvantaged communities to bear,” said Kathy Mulvey, the fossil fuel accountability campaign manager at the Union of Concerned Scientists. “Making fossil fuel polluters fund a comprehensive federal response to climate change is an important step toward holding these companies accountable for blocking climate action for decades and toward foiling their deception and greenwashing campaigns.”

“Sen. Van Hollen’s bill is a key part of our country’s emergency climate response,” said Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute. “With devastating evidence of the climate crisis all around us, this bill would make fossil fuel polluters pay for a small portion of the ongoing damage that oil, gas and coal are causing to our planet. President Biden and everyone who wants a livable future should throw their full support behind this common sense legislation.”

“The need to stop, undo and fix the impact that air pollution has on the health and future of our planet couldn’t be more urgent, particularly for communities of color who continue to suffer the most from inaction,” said Dianne Enriquez, Co-Director of Community Dignity Campaigns at the Center for Popular Democracy. “We need legislation that holds polluters accountable and supports the work of leaders and communities that are fighting for environmental justice. It’s time big polluters pay to address the devastating damage they’ve caused to our people and our planet. ‘The Polluters Pay Climate Fund’ is one important step toward less toxic air and healthier communities.”

“Every year climate polluters kill hundreds of thousands of people in the United States and over nine million people world wide. Polluters must pay for all the pain and suffering they cause our communities,” said Kaniela Ing, Climate Justice Campaign Director with People’s Action. “Every Democrat, Republican, and Independent learned at some point that ‘if you make a mess, you clean it up.’ This idea is neither controversial nor partisan. It deserves widespread support among members of Congress, especially as members obsess over finding more ‘pay-fors’ to fund the Bipartisan Infrastructure Framework and the American Jobs Plan."

“It is common sense to make polluters pay for the destruction they have caused to our planet and communities,” said Natalie Mebane, Associate Director of U.S. Policy at 350.org. “Fossil fuel companies are the reason we are experiencing climate chaos from heat waves to wildfires, stronger storms and hurricanes to winter freezes, and they continue to sow misinformation and lies about their role. With the window of opportunity closing for meaningful climate action it is imperative that they foot the bill for the urgent transition we need to a country powered by renewables. We fully support Senators Van Hollen, Markey, and Sanders in establishing the Polluters Pay Climate Fund.”

“When you break something, you pay for it. When you make a mess, you clean it up. Fossil fuel companies need to be held to the same standards that we hold our children. Companies like Exxon, Chevron, and Shell are most responsible for the climate emergency we are living in today and should pay for the damages they caused,” said Janet Redman, Greenpeace USA Climate Campaign Director. “Making polluters pay for the recovery of our communities and planet from the damage they’ve caused is an important first step towards holding a morally-bankrupt industry that has harmed our health and destroyed our environment to account.”

“My family lost everything to Superstorm Sandy. Now, the skies are darkening, subways are flooding, and the heat is relentless. Meanwhile, the Democrats who run all three branches have talked themselves blue, no pun intended, about the importance of climate action. Making polluters pay is an obvious step towards getting the real money we need to confront the climate emergency. It's time to get serious: don't delay, make them pay,” said Rachel Rivera, a survivor of Superstorm Sandy and member of New York Communities for Change.

“It is encouraging to see policymakers heed the growing demands of people across the US and the world to make Big Polluters pay for fueling the climate crisis,” said Swetha Saseedhar, Senior Climate Organizer, Corporate Accountability. “For millions of people, the climate crisis has already arrived. Action taken to hold Big Polluters liable can and must be used to fast track a just transition off fossil fuels and provide reparations for the communities most affected. Elected officials must hold polluters accountable for harms and end their license to pollute—including by investigating and suing this abusive industry.”

"Polluters have known about fossil-fueled climate change for decades and continue to mislead the public and spur climate denialism today. This bill is a critical step toward holding the fossil fuel industry accountable for climate destruction. It's past time the biggest CO2 emitters paid for the floods and the fires that their pollution and misinformation have caused,” said Zanagee Artis, Policy Director of Zero Hour. READ MORE