Polluters Pay: The Extreme Weather Superfund

The problem

The climate crisis is a funding crisis, too. Extreme weather events are increasing in magnitude and frequency, endangering lives and livelihoods across the nation. The costs of disaster recovery and climate adaptation are straining the budgets of households, businesses, and local, state and federal governments.

Past failures

Fossil fuel corporations profited enormously over the years from extraction of oil, natural gas, and coal, shifting the costs of climate destabilization onto the public. The agency with primary responsibility for responding to extreme weather disasters, the Federal Emergency Management Agency (FEMA), has faced recurrent challenges in securing adequate funding and delivering assistance. The Trump administration has cut the agency’s budget and staff with the announced aim of shifting responsibility onto state and local governments and private citizens, without plans to fund them. Meanwhile, the administration has gutted public investments in climate adaptation that were initiated under the Biden administration.

Game changer: Polluters Pay

In response to these pressing needs, the Extreme Weather Superfund (EWS) will require large fossil fuel corporations to help foot the bill. Drawing on the precedents of the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund), the Tobacco Master Settlement, and the climate superfund laws recently passed in Vermont and New York state, the policy has four key components:

1. Annual assessments on polluters

Any corporation that produced fossil fuels responsible for at least one billion tons of CO2-equivalent emissions in the historical reference period from 1995 to 2024 will be designated a Responsible Party and assessed a share of $100 billion per year in proportion to these emissions, to be collected by the U.S. Treasury for 25 years.

2. Expenditure allocation

EWS funding will be allocated to state and local governments and federal agencies for disaster relief and recovery costs and for climate adaptation investments. A minimum of $75 billion will be allocated annually to adaptation. Spending will be guided by the goals of cost effectiveness and fairness in the protection of lives and livelihoods.

3. Supplemental assessments

In years when disaster relief and recovery costs arising from extreme weather events exceed $25 billion, the Responsible Parties may be assessed supplemental amounts, again in proportion to their historical emissions.

4. Document disclosure

All internal corporate documents of the Responsible Parties that deal with political activities, scientific research on the environmental impacts of fossil fuels, and marketing (including advertising) will be disclosed and made accessible to the public through a searchable website, like the one created for tobacco companies under the Tobacco Master Settlement Agreement.

Rationale: An environmental policy that works for a working America

The Polluters Pay policy provides a workable and fair response to the pressing need to secure adequate funding for disaster recovery and investments in climate adaptation. It will make the American people safer by helping to fund climate adaptation investments that reduce our vulnerability to extreme weather events. And it will assist victims of future disasters arising from hurricanes, floods, storms, heat waves, wildfires, and droughts. In addition to these direct benefits, EWS expenditures will create thousands of jobs in construction, utilities, and emergency response, once again benefiting working Americans.

By making polluters pay, the Extreme Weather Superfund will not burden taxpayers with the entire cost of responding to the effects of climate destabilization. Instead, it holds the large fossil fuel corporations accountable, compelling them to shoulder a significant share of the costs. Because EWS assessments are based on historical output, not current emissions, the policy does not alter the current operating costs of supplying fuel. To maximize their own profits and maintain their market shares, the Responsible Parties will not raise consumer prices in an effort to push the costs back onto the public. Instead, as in the case of the $65 billion settlement with BP for the Deepwater Horizon oil spill, the costs of the assessments will be borne by fossil fuel shareholders, both foreign and domestic.