Overview

Title

To impose an assessment related to fossil fuel emissions, to establish the Polluters Pay Climate Fund, and for other purposes.

ELI5 AI

In this bill, fossil fuel companies are asked to pay money based on how much pollution they have caused since the year 2000, and the money collected will be used to help protect people and places from climate problems. The goal is to make sure that the companies who made a mess pay to help fix it, especially for areas that are affected the most.

Summary AI

The bill, titled the "Polluters Pay Climate Fund Act of 2025," aims to impose a tax on fossil fuel companies based on their carbon emissions since 2000. The revenue from this tax will be used to establish the Polluters Pay Climate Fund, designed to support climate resilience, disaster response, and environmental justice initiatives. The bill emphasizes that it does not determine fault or exempt any company from legal liabilities, and it allows for collaboration with state and local laws and initiatives regarding greenhouse gas emissions and climate change. The fund particularly targets investments that benefit communities disproportionately affected by climate change.

Published

2025-01-07
Congress: 119
Session: 1
Chamber: SENATE
Status: Introduced in Senate
Date: 2025-01-07
Package ID: BILLS-119s25is

Bill Statistics

Size

Sections:
8
Words:
3,941
Pages:
20
Sentences:
69

Language

Nouns: 1,220
Verbs: 293
Adjectives: 233
Adverbs: 30
Numbers: 140
Entities: 202

Complexity

Average Token Length:
4.27
Average Sentence Length:
57.12
Token Entropy:
5.44
Readability (ARI):
30.75

AnalysisAI

General Summary

The "Polluters Pay Climate Fund Act of 2025" represents a legislative effort by the United States Congress to address the urgent threat of climate change by imposing financial assessments on fossil fuel companies. The bill aims to create the Polluters Pay Climate Fund, which will focus on funding climate resiliency projects, disaster recovery, and adaptation efforts. The legislation is primarily sponsored by Senators Van Hollen, Sanders, Merkley, Markey, and Warren.

The bill acknowledges the significant risks posed by climate change, driven by fossil fuel emissions, and outlines a tax structure for specific fossil fuel companies based on their carbon dioxide emissions since the year 2000. Companies identified with significant emissions will contribute to a $1 trillion fund, which can be paid in installments. The proceeds are intended to bolster various climate initiatives, with an emphasis on supporting vulnerable communities.

Significant Issues

One of the major criticisms of the bill is its complexity in calculating the taxes imposed on fossil fuel companies. The method relies on a company's "applicable share" of emissions, which could lead to bureaucratic challenges and potential misreporting. Additionally, the term "successor in interest" is not clearly defined, which could lead to legal ambiguity regarding responsibility and liability.

The bill also establishes the Polluters Pay Climate Fund without detailing specific oversight mechanisms, raising concerns about the potential for wasteful spending or misallocation of funds. The selection criteria for distributing these funds lack specificity, which may result in discretionary spending that could favor certain groups or projects over others.

There are concerns about the potential conflicts between federal, state, and local governance expressed through the 'Non-preemption' clause, which aims to preserve state and local rights to set their own standards. This might lead to legal disputes if interpretations differ about what constitutes preemption.

Impact on the Public

Broadly, this bill seeks to mitigate the negative impacts of climate change by securing financial resources from those who have contributed significantly to emissions. Publicly, this act could bolster efforts to adapt to extreme weather and climate-related disasters, aiming to enhance infrastructure resilience and public health initiatives.

For communities, especially those characterized as "environmental justice communities," the bill pledges significant resources, potentially improving their ability to cope with climate change effects. However, if the funds are not managed effectively and fairly, intended benefits may not be realized.

Impact on Specific Stakeholders

Fossil Fuel Companies

For fossil fuel companies, this bill represents a significant financial obligation. Those qualifying as "assessable persons" will face a substantial tax based on their emissions, potentially impacting their financial standing and operations. The complexity of the tax calculation could also introduce administrative burdens and potential disputes over assessments.

Vulnerable Communities

Communities deemed vulnerable to the impacts of climate change may benefit from targeted investments financed through this fund. If implemented effectively, this could translate into improved infrastructure, better disaster preparedness, and enhanced public health capabilities. However, the vagueness in the selection and allocation criteria indicates a risk that these communities might not receive consistent or equitable support.

Government and Legal Systems

For federal, state, and local governments, this bill necessitates coordination in addressing climate change while respecting local and state regulations. However, differences in interpretation of the bill's provisions regarding non-preemption could strain relationships and provoke legal challenges.

Overall, while the Polluters Pay Climate Fund Act of 2025 establishes ambitious measures to tackle climate change, significant questions remain concerning the implementation and management of its provisions, along with its potential economic impacts on key stakeholders.

Financial Assessment

The "Polluters Pay Climate Fund Act of 2025" primarily revolves around financial mechanisms to address climate change impacts through taxation and establishment of a fund. The bill outlines specific monetary figures and intended use of funds which warrant careful consideration and commentary.

Financial Allocations and Taxation

The bill introduces a tax structure aimed at fossil fuel companies based on their historical carbon dioxide emissions since 2000. The section on "Tax relating to current stock of greenhouse gas emissions" specifies that each assessable person (fossil fuel company) will pay a tax. The total tax imposed under this section aims to amass $1 trillion proportional to the company's share of emissions relative to all covered entities. This is significant as it reflects a major fiscal endeavor aimed at generating substantial financial resources for climate-related initiatives.

Use of the Polluters Pay Climate Fund

The revenues collected from the newly imposed tax are intended to be channeled into establishing the Polluters Pay Climate Fund. The Fund is envisioned to support a variety of initiatives, such as climate resilience, adaptation, infrastructure, and environmental justice. Notably, the bill mandates that at least $15 billion annually should fund the Federal Emergency Management Agency for climate-related disasters, with a specific $3 billion allocated to the Building Resilient Infrastructure and Communities program. Additionally, $6 billion is earmarked for grants and technical assistance under the Clean Air Act.

Relation to Issues

  1. Complexity and Ambiguity: There is a specific concern about the complexity involved in calculating the tax based on emissions, which could impose a significant administrative and regulatory burden on both the government and the companies. This complexity might lead to difficulties in enforcement and compliance.

  2. Successor in Interest: The term "successor in interest," frequent in the bill, is not well-defined, potentially creating financial ambiguity regarding tax liabilities during corporate transactions like mergers or acquisitions. This could impact how financial responsibilities are transferred and managed over time.

  3. Oversight and Accountability: While the bill outlines how funds should be allocated, there is a notable absence of detailed oversight mechanisms for the Polluters Pay Climate Fund. This lack of specificity could lead to potential misallocation or inefficient use of funds, echoing concerns about transparency and accountability.

  4. Environmental Justice Set-Aside: The provision that 40% of the fund's allocations should benefit environmental justice communities aligns with social equity goals but requires clear criteria for defining eligible communities and projects. This risks discretionary decision-making in the absence of well-defined parameters.

  5. Ambiguous Selection Criteria: The bill charges the Secretary of the Treasury with establishing selection criteria for funding priorities, which could result in vague decision-making unless specified clearly. This may result in inconsistent or subjective financial support for projects.

Conclusion

In essence, while the bill proposes substantial financial measures aimed at addressing climate change, the execution of its monetary provisions is fraught with possible challenges related to complexity, legal ambiguity, and oversight. Ensuring transparency, accountability, and clear guidelines will be crucial for the effective realization of the bill's financial goals.

Issues

  • The section on 'Findings' commits to 'trillions of dollars of new investment' without providing a clear breakdown or plan for allocation, raising concerns about potential wasteful spending and lack of accountability (Section 2).

  • There is significant complexity and ambiguity in the method for calculating the tax based on an 'applicable share of covered carbon dioxide emissions', which could result in administrative burdens and difficulties in enforcement (Section 3).

  • The term 'successor in interest' used multiple times in the tax sections is not clearly defined, leading to potential legal ambiguities regarding liability transfer, especially in the context of mergers or acquisitions (Sections 3 and 4691).

  • There is a lack of oversight mechanisms mentioned in the establishment of the 'Polluters Pay Climate Fund', risking misallocation or wasteful use of the funds (Sections 4 and 9512).

  • The adjustment mechanism allowing for tax liabilities to be altered based on crude oil extractions could lead to complicated disputes and necessitates intensive record-keeping, imposing a regulatory burden (Section 3).

  • The language regarding the 'selection criteria' for awarding funds from the 'Polluters Pay Climate Fund' lacks specificity and could result in ambiguous decision-making and discretionary spending (Sections 4 and 9512).

  • The section on 'Availability of Remedies' might be overly complex for those not familiar with legal terminology, potentially causing misunderstandings about the rights and liabilities it entails (Section 5).

  • The language in the 'Non-preemption of authorities' section might cause conflicts between federal, state, and local laws, particularly through interpretations of what constitutes preemption, leading to legal disputes (Section 6).

  • The definition of 'covered carbon dioxide emissions' may inadequately reflect actual emissions by only including emissions from extraction and refining, potentially excluding other significant fossil fuel-related emissions (Section 3).

Sections

Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.

1. Short title Read Opens in new tab

Summary AI

The first section of the bill states that the official name of the legislation is the “Polluters Pay Climate Fund Act of 2025.”

2. Findings Read Opens in new tab

Summary AI

Congress acknowledges that climate change caused by fossil fuels poses a serious threat to the U.S., leading to extreme weather and economic impacts. The section highlights the need for protective measures, significant investment, and increased contributions from fossil fuel companies to address these issues, without assigning fault or limiting legal accountability.

Money References

  • Congress finds that— (1) climate change, resulting primarily from the combustion of fossil fuels, is an immediate, grave threat to the communities, environment, and economy of the United States; (2) severe consequences of climate change have already materialized in the United States, including rising sea levels, increasing temperatures, extreme weather events, flooding, heat waves, loss of biodiversity, and other climate change-driven ecosystem threats; (3) the Federal government jointly with States and localities must develop and implement protective measures to counteract the adverse effects of climate change, protect communities, and build resilience to extreme weather; (4) the government response must include protections for communities that are most vulnerable to climate change impacts, especially communities of color, low-income communities, and Tribal and Indigenous communities that are also more likely to have experienced systemic disinvestment and be overburdened by fossil fuel pollution; (5) the protective measures necessary to respond to the adverse effects of climate change in the United States will require trillions of dollars of new investment during the decade after the date of enactment of this Act; (6) climate change related extreme weather events, such as those described in paragraph (2), cost the United States at least $150,000,000,000 each year and disproportionately affect underserved and overburdened communities, according to the Fifth National Climate Assessment; (7) the $100,000,000,000 each year that fossil fuel companies are collectively assessed for the Polluters Pay Climate Fund established in this Act represents only a small portion of the total cost to the Federal government to respond to climate change related extreme weather events and make needed climate change adaptation and resilience investments; (8) peer-reviewed research can now determine with great accuracy the share of carbon dioxide released into the atmosphere by the operations and products of specific fossil fuel companies, which is what informs the formulas to determine carbon dioxide emissions that are used in the amendments made by this Act; (9) the fossil fuel industry has been aware of the central role that their product plays in causing climate change since before the year 2000; (10) the fossil fuel industry must now increase their contribution to government expenditures to protect the Nation from climate disaster; and (11) this Act and assessments under the amendments made by this Act are not intended— (A) to be a determination of fault; or (B) to have any impact on the ability of any person or other government to hold polluters accountable for harms caused.

3. Tax relating to current stock of greenhouse gas emissions Read Opens in new tab

Summary AI

The section introduces a new tax on certain large fossil fuel companies based on their carbon dioxide emissions since 2000. Companies responsible for more than 1,000,000,000 metric tons of emissions must pay a share of a trillion-dollar tax, which can be paid in nine annual installments, and the law defines key terms and responsibilities for calculating and paying this tax.

Money References

  • “(b) Determination of amount.— “(1) IN GENERAL.—With respect to each assessable person, the tax under this section shall be equal to an amount that bears the same ratio to $1,000,000,000,000 as— “(A) the assessable person's applicable share of covered carbon dioxide emissions taken into account under this section, bears to “(B) the aggregate applicable shares of covered carbon dioxide emissions of all assessable persons taken into account under this section.

4691. Imposition of tax Read Opens in new tab

Summary AI

This section imposes a tax on certain businesses responsible for large carbon dioxide emissions, requiring them to pay a share of a $1 trillion tax based on their emissions relative to the total emissions of all such businesses. It specifies how to calculate this amount, outlines the types of businesses affected, and allows for the possibility of paying the tax in installments.

Money References

  • — (1) IN GENERAL.—With respect to each assessable person, the tax under this section shall be equal to an amount that bears the same ratio to $1,000,000,000,000 as— (A) the assessable person's applicable share of covered carbon dioxide emissions taken into account under this section, bears to (B) the aggregate applicable shares of covered carbon dioxide emissions of all assessable persons taken into account under this section.

4. Polluter Pays Climate Change Fund Read Opens in new tab

Summary AI

The Polluter Pays Climate Change Fund is established to support various initiatives aimed at addressing climate change impacts, including disaster recovery, infrastructure resilience, and public health. The fund emphasizes investment in environmental justice communities, with specific funds allocated to the Federal Emergency Management Agency and Clean Air Act grants, and priority given to impactful climate projects.

Money References

  • (B) SPECIFIED USES.—In carrying out subparagraph (A) each fiscal year and to the greatest extent practicable, the Secretary shall use amounts in the Fund— (i) to provide funding of not less than $15,000,000,000 to the Federal Emergency Management Agency for response and resilience programs of the Federal Emergency Management Agency to address climate-related disasters, including hurricanes, flooding, extreme heat, and wildfires, of which not less than $3,000,000,000 shall be used to carry out the Building Resilient Infrastructure and Communities program under section 203 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5133); and (ii) to provide funding of not less than $6,000,000,000 for grants and technical assistance under section 138 of the Clean Air Act (42 U.S.C. 7438), subject to the condition that the Administrator may determine the appropriate amounts to be used for those grants and that technical assistance.

9512. Polluters Pay Climate Fund Read Opens in new tab

Summary AI

The establishment of the "Polluters Pay Climate Fund" creates a trust fund in the U.S. Treasury, where money from taxes related to polluting activities is collected and then used, as determined by Congress, to fund activities related to a specific climate act.

5. Availability of remedies Read Opens in new tab

Summary AI

This section clarifies that the Act does not exempt anyone from existing legal responsibilities and explicitly states that it does not interfere with claims related to climate change under state or local laws. It ensures that funds from the Polluter Pays Climate Change Fund cannot be used to influence court cases related to climate change or to offset damages awarded by such cases.

6. Non-preemption of authorities Read Opens in new tab

Summary AI

The section ensures that the Act does not override or replace any existing state or local laws or regulations related to greenhouse gas emissions. It clarifies that states and localities can continue to set their own standards, monitor emissions, support climate initiatives, and conduct investigations.