A Maryland U.S. Senator unveiled legislation this week that would tax major oil and gas companies which emit greenhouse gases to help pay for the costs of climate disasters.
Sen. Chris Van Hollen (D) is sponsoring the Polluters Pay Climate Fund Act, which would tax 25 to 30 companies that each have contributed at least 0.05 percent of total carbon dioxide and methane gas emissions between 2000 and 2019.
The measure would also tax foreign companies that do business in the United States.
Those companies would pay a total of $500 billion into a fund over the next decade to address impacts of climate change.
The funds could go to projects such as climate resilient infrastructure, clean energy technology and research and supporting communities that have suffered disproportionately from environmental impacts, Van Hollen said. And at least 40 percent of the fund will be directed towards environmental justice communities, according to the draft legislation.
Van Hollen said he and the bill’s co-sponsors are still soliciting public comment to determine exactly how to use the funds.
“What we’re saying here is simple — those who have contributed most to the harm should be responsible to…clean up the harm done and mitigate the damages done,” Van Hollen said during a press conference.
“It’s also essential that we don’t ask taxpayers alone to pay the costs of damage done by big carbon polluters,” he added.
Large companies like ExxonMobil, BP and Shell could be expected to pay up to $6 billion a year for a decade, according to a description of the bill posted on Van Hollen’s Senate website. However, companies would be able to challenge the government’s determination.
The Department of Treasury and the Environmental Protection Agency would use public data to determine each company’s share of emissions to identify the companies subject to this tax.
The proposal does not require proof of intentional wrongdoing by companies, nor would it assign blame for specific damages, but would simply ensure that large energy companies contribute to solving the climate crisis, according to a description of the bill.
While a carbon tax helps to discourage energy companies from emitting more greenhouse gas and reduce emissions in the future, this proposal would require companies to compensate for the immense damage already done, Van Hollen said.
“None of us believe there is any one single policy tool that by itself can address the ongoing threat of climate change and … help pay for the damage and mitigate the harm, but what we are all here saying is that polluters should pay,” he said.
The idea that polluters should shoulder the cost of pollution is not new. In 2018, Baltimore sued 26 oil and gas companies, including ExxonMobil, Shell and Chevron, seeking to hold them financially responsible and make them help pay to protect the city from impacts of climate change.
And earlier this year, Annapolis sued 26 oil and gas companies, contending that the fossil fuel industry knew about its dangerous contributions toward climate change but misled the public about the science.
Maryland state lawmakers have also tried to hold large energy companies accountable for their role in the climate crisis, for feigning ignorance on their climate impacts and for misleading the public.
During the 2021 legislative session, Del. David Fraser-Hidalgo (D-Montgomery) and Sen. Ben Kramer (D-Montgomery) introduced a bill that would have imposed greenhouse gas emission fees on fossil fuels and new high-emission vehicles brought into Maryland and invest that revenue in education, green infrastructure and protections for low-income families.
Iterations of this carbon-cutting legislation have been introduced in the General Assembly for the last four years, but have not advanced beyond committee.
Del. Jennifer R. Terrasa (D-Howard) introduced a measure this year that would have allowed the attorney general to hire outside counsel on a contingency basis to take action against fossil fuel companies that unlawfully contributed to the climate crisis. That bill also did not make it out of committee.
Co-sponsors of the Polluters Pay Climate Fund Act include U.S. Sens. Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), Ed Markey (D-Mass), Sheldon Whitehouse (D-R.I.) and Jeff Merkley (D-Ore.).