Fossil fuel companies should pay damages for the emissions they caused, 13 Vermont advocacy groups said in an open letter to the state’s congressional delegation.
Sen. Bernie Sanders, I-Vt., has made a similar argument before, and he’s now set to cosponsor draft legislation by Sen. Chris Van Hollen, D-Md., to establish the Polluters Pay Climate Fund.
It would direct the Treasury Department and Environmental Protection Agency to identify corporations that sold the most greenhouse gas-producing products between 2000 and 2019. Companies deemed responsible for more than 0.05% of global carbon dioxide and methane emissions in that time period would be assessed damages proportionately.
A white paper issued by Van Hollen and his cosponsors estimates those fees would total about $500 billion over the next decade. They estimate it would cost the biggest companies — such as ExxonMobil, BP, Shell and Chevron — $5 billion to $6 billion per year.
Paul Burns, executive director of Vermont Public Interest Research Group, described this fee as a climate Superfund, like the existing program for toxic waste sites. VPIRG signed the open letter to Vermont’s delegation, urging support of the legislation.
“The idea is that the businesses that created the problem should be the ones to pay to clean up the mess,” Burns said. “And the most fair way to do that is to have the businesses pay based on their level of responsibility, their level of contribution to the problem.”
Sen. Patrick Leahy, D-Vt., “has not yet been able to review the specifics of this proposal, but he has strongly supported the similar Superfund concept for many years, based on the principle that polluters pay for cleanups, and his staff has begun discussions about this with advocates in Vermont,” said David Carle, Leahy’s spokesperson.
The concept of calculating corporations’ responsibility for their greenhouse gas emissions comes from a growing body of research. Notably, Richard Heede of the Climate Accountability Institute published a 2013 study that found 90 companies were responsible for 63% of global carbon and methane emissions since 1751.
The white paper says this legislation would use a “strict liability standard,” meaning the government wouldn’t have to prove corporate negligence or intentional wrongdoing to collect damages.
“The assessments are not a punishment,” the report states.
Burns said fees proportionate to corporate production would have less impact on consumers than a flat carbon tax. If fossil fuel companies were all taxed equal rates for their products’ emissions, they could just pass that cost along to consumers.
If each company is charged their own proportional rate, it’s more difficult to put that burden on consumers and stay competitive, Burns said. Companies that tried to recoup by raising prices could be undercut by competitors with lower fees.
It’s unclear exactly how this money would be used to mitigate the effects of climate change, but the white paper mentions investment in climate-resilient infrastructure and a transition to renewable energy.
According to draft legislation, at least 40% of the fees would be directed toward environmental justice communities, which generally means low-income communities disproportionately hurt by climate change, waste dumps or pollution.
Van Hollen told The New York Times he hopes the climate fund legislation will be attached to the upcoming budget reconciliation package, which is expected to cost about $3.5 trillion. Senate Democrats could pass that without any Republican votes, but only if every Democrat stays on board.
That vote would happen after the Senate wraps up the $1 trillion bipartisan infrastructure bill. Senate Majority Leader Chuck Schumer said Tuesday he plans to delay the chamber’s August break until it can pass the bill, CNBC reported.
“Both of [the bills] would involve climate, in some respects, and those are very big packages with big price tags, and so it makes sense to be having this conversation now,” Burns said.