Democrats seek $675 billion in climate damages from big polluting companies

United States Democrats in Congress want to tax Exxon, Chevron and a handful of other major oil and gas companies, saying the biggest climate polluters should pay for the floods, wildfires and other disasters that scientists have linked to the burning of fossil fuels.

The draft legislation, from Senator Chris Van Hollen, directs the Department of the Treasury and the Environmental Protection Agency to identify the companies that released the most greenhouse gases into the atmosphere from 2000 to 2019 and assess a fee based on the amounts they emitted.

That could generate an estimated US$500 billion (S$675.7 billion) over the next decade, according to Mr Van Hollen. The money would pay for clean energy research and development as well as help communities face the flooding, fires and other disasters that scientists say are growing more destructive and frequent because of a warming planet.

The bill for the largest polluters could be as much as US$6 billion annually spread over 10 years, according to a draft of the plan.

"It's based on a simple but powerful idea that polluters should pay to help clean up the mess they caused, and that those who polluted the most should pay the most," Mr Van Hollen said. "Those who have profited the most should help now pay the damages that they've already caused."

The proposal comes as the Senate prepares to vote on a bipartisan US$1 trillion infrastructure package that includes billions of dollars to help communities prepare for and recover from extreme weather driven by climate change.

Democrats hope to later pass a separate US$3.5 trillion budget package that will include measures to cut carbon dioxide, methane and other greenhouse gases that result from burning fossil fuels and that are helping to drive up global temperatures.

A tax on polluting companies has the support of liberal lawmakers including Senator Bernie Sanders, as well as senators Edward Markey, Elizabeth Warren and Sheldon Whitehouse.

Mr Van Hollen says he is optimistic that his legislation will find broad support within his party and be attached to the budget reconciliation package, which Democrats hope to pass without Republican votes. But that would require all Democrats in the narrowly divided Senate to back the measure, including Mr Joe Manchin III of West Virginia, who has routinely argued against anti-fossil fuel legislation.

While several major oil companies, the Chamber of Commerce and the American Petroleum Institute - the country's largest oil and gas trade group - support a tax on carbon emissions, fossil fuel advocates said Tuesday (Aug 4) that targeting a handful of companies was unfair.

Mr Thomas Pyle, president of the Institute for Energy Research, which supports the expanded use of fossil fuels, questioned the legality of Mr Van Hollen's tax plan.

"It's laughable," he said.

Mr Pyle said he was stunned by the idea of singling out individual companies to tax, adding: "I can't imagine any court of law that this would stand up in."

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

Mr 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 trade group supports "a market-based, economy-wide carbon price policy" to tackle climate change.

An exhaustive scientific report issued in 2018 by 13 federal agencies concluded that human activities, especially the emissions of greenhouse gases produced by power plants, factories and cars that run on fossil fuels, are the dominant cause of the global temperature rise.

The report concluded that extreme weather events made worse by global warming would cause hundreds of billions of dollars a year in damage in the US alone.

Last year, the nation saw a record 22 disasters that each caused damage of at least US$1 billion, according to the National Oceanic and Atmospheric Administration.

Increasingly, climate activists are making the case for redress from those most directly responsible for carbon emissions: the companies that produced them.

"These oil companies and their executives are by far the most responsible parties for the climate crisis," said Mr Lee Wasserman, director of the Rockefeller Family Fund, a philanthropic group that helped develop the proposed legislation.

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

If the Democratic proposal passed into law, the US government would target companies responsible for at least 0.05 per cent of the total carbon dioxide and methane gas emissions in the atmosphere from 2000 to 2019. That would apply to 25 to 30 companies.

Aides to Mr Van Hollen said the legislation aims to look back only as far as 2000 because older data is not considered as reliable or uniform.

To determine the biggest emitters, the government could cite a growing body of research developed by Mr Richard Heede, a researcher at the Climate Accountability Institute, a non-profit advocacy group.

In 2014, Mr Heede quantified the annual production of every major fossil fuel company and converted it into carbon emissions - finding just 90 companies worldwide were responsible for nearly two-thirds of all greenhouse gas emissions since the start of industrialisation.

The top 20 companies are responsible for nearly 30 per cent of emissions, the study found.

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

Under the Democrats' plan, the tax would be applied to US companies and foreign companies with American subsidiaries. Companies also would have the ability to dispute the government's determination.

"Responsibility to pay would be based on a strict liability standard," according to a draft of the plan. "There is no requirement to prove negligence or intentional wrongdoing. The proposal does not assign blame for specific damages - it simply ensures that these companies contribute to the solution."


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