July 5, 2022

WASHINGTON – Congressional Democrats want to tax Exxon, Chevron and a handful of other big oil and gas companies, saying the biggest climate polluters should pay for the floods, forest fires and other disasters scientists have linked to fossil fuel burning.

Maryland Senator Chris Van Hollen’s bill directs the Treasury Department and the Environmental Protection Agency to identify the companies that released the most greenhouse gases to the atmosphere from 2000 to 2019 and to charge a fee based on the amounts they emitted.

According to Van Hollen, this could bring in an estimated $ 500 billion over the next decade. The money would pay for clean energy research and development, as well as help communities face floods, fires, and other disasters that scientists say are becoming increasingly destructive and frequent due to the warming of the planet.

According to a draft plan, the bill for the biggest polluters could be up to 6 billion dollars a year, spread over 10 years.

“It is based on a simple but powerful idea that polluters should pay to clean up the chaos they have created and that those who have caused the most pollution should pay the most,” Van Hollen said in an interview . “Those who have benefited the most should help now to pay for the damage they have already caused.”

The proposal comes as the Senate prepares to vote on a $ 1 trillion bipartisan infrastructure package, spanning billions of dollars to help communities prepare for and recover from extreme weather conditions caused by climate change. Democrats hope to later adopt a separate $ 3.5 trillion budget package that includes measures to reduce carbon dioxide, methane and other greenhouse gases that result from burning fossil fuels and help raise global temperatures raise.

A polluting business tax is backed by liberal lawmakers, including Senator Bernie Sanders, the Independent of Vermont, Senators Edward J. Markey and Elizabeth Warren of Massachusetts and Sheldon Whitehouse of Rhode Island, all Democrats.

Van Hollen says he is optimistic that his legislation will find widespread support within his party and will be included in the budgetary reconciliation package the Democrats hope to pass without getting Republican votes. But that would require all Democrats in the narrowly divided Senate to support the move, including Joe Manchin III. from West Virginia, who routinely opposed fossil fuel legislation.

While several major oil companies, the Chamber of Commerce, and the American Petroleum Institute – the country’s largest oil and gas trading group – are advocating a tax on carbon emissions, fossil fuel proponents said Tuesday that it would be unfair to target a handful of companies.

Thomas J. Pyle, President of the Institute for Energy Research, which advocates expanding the use of fossil fuels, questioned the legality of Mr Van Hollen’s tax plan.

“It’s ridiculous,” he said.

Mr Pyle said he was stunned by the idea of ​​taxing individual companies, adding, “I can’t think of a court where this would stand.”

Exxon Mobil and Chevron did not respond to requests for comment.

Frank Macchiarola, senior vice president of the American Petroleum Institute, declined to comment on the proposal, but said in a statement that the oil and gas trading group supports “market-based, economy-wide carbon pricing policies” to combat climate change.

A comprehensive scientific report issued by 13 federal agencies in 2018 concluded that human activities, particularly greenhouse gas emissions from power plants, factories and fossil fuel-powered cars, are the leading culprits in the global economy Temperature rise.

The report concluded that extreme weather events made worse by global warming would cause hundreds of billions of dollars in damage annually in the United States alone. In 2020, the nation experienced a record 22 disasters, each causing at least $ 1 billion in damage, according to the National Oceanic and Atmospheric Administration.

Climate activists are increasingly calling for reparations to be made to those most directly responsible for carbon emissions: the companies that produced them.

“These oil companies and their executives are by far the primary culprits in the climate crisis,” said Lee Wasserman, director of the Rockefeller Family Fund, a philanthropic group that helped develop the bill.

Oil companies have accused the Rockefeller Family Fund of funding a climate conspiracy by funding research used in litigation against the fossil fuel industry.

Should the Democratic proposal go into effect, the US government would target companies responsible for at least 0.05 percent of all carbon dioxide and methane gas emissions into the atmosphere from 2000 to 2019. That would apply to 25 to 30 companies. Mr Van Hollen’s advisors said the legislation aims to only look back to the year 2000 as older data are not considered reliable or consistent.

To identify the largest emitters, the government could point to a growing body of research developed by Richard Heede, a researcher at the Climate Accountability Institute, a nonprofit advocacy group. In 2014, Mr. Heede quantified the annual production of all large companies for fossil fuels and converted them into CO2 emissions – and found that only 90 companies worldwide were responsible for almost two thirds of all greenhouse gas emissions since the beginning of industrialization.

The top 20 companies are responsible for almost 30 percent of emissions, according to the study.

The list includes overseas companies like Saudi Aramco and Gazprom, as well as US-based companies like Exxon Mobil, Chevron and ConocoPhillips.

According to the Democrats’ plan, the tax will be levied on US companies and foreign companies with American subsidiaries. Companies would also have an opportunity to challenge the government’s resolve.

“The obligation to pay would be based on a strict liability standard,” says a draft of the plan. “Proof of negligence or intent is not required. The proposal does not assign blame for any particular damage – it just ensures that these companies contribute to the solution. “

Amy M. Jaffe, General Manager of the Climate Policy Lab at Fletcher. from Tufts University School said while the proposal could raise money, she was skeptical that it would force a reduction in greenhouse gas emissions.

“The best way to change behavior is to regulate it,” she said. “There is no substitute for adequate regulation and enforcement to end pollution.”

Richard J. Lazarus, a law professor at Harvard University, said he believed the proposal could withstand legal challenges.

He compared the Climate Fund to the Comprehensive Environmental Response, Compensation and Liability Act, also known as the Superfund, created by Congress in 1980 to force polluting companies to pay to clean up toxic sites.

Mr. Lazarus noted that chemical companies sued the program but failed. And he said, “Any difference between the hazardous waste problems of the 1980s and the climate change issues of our time will benefit this legislation.”