The "Polluters Pay Climate Fund Act of 2025" taxes fossil fuel companies based on their historic emissions to fund climate resilience, adaptation, disaster response, and environmental justice initiatives, while preserving legal avenues for climate-related claims.
Jerrold Nadler
Representative
NY-12
The Polluters Pay Climate Fund Act of 2025 taxes fossil fuel companies based on their historic carbon emissions to create a fund for climate resilience, adaptation, disaster response, and environmental justice initiatives. The fund will allocate billions annually to FEMA and EPA programs, with a focus on benefiting environmental justice communities. The Act clarifies that it does not preempt existing laws or prevent entities from pursuing climate-related legal claims against polluters. This legislation aims to make the fossil fuel industry contribute to addressing the climate crisis and its impacts.
Fossil Fuel Companies Hit with $1 Trillion Climate Tax: Payments Begin 2026
The Polluters Pay Climate Fund Act of 2025 drops a hefty tax on fossil fuel giants, aiming to raise $1 trillion to tackle climate change impacts. Here's the deal: companies that extracted or refined fossil fuels between the enactment date and December 31, 2025, and are responsible for over a billion metric tons of carbon dioxide emissions between 2000 and 2023, are on the hook. This isn't some future plan – the first tax payments are due September 30, 2026 (SEC. 3).
Paying Up and Cleaning Up
The core of this bill is pretty straightforward: make big polluters pay for climate damage. The tax is calculated based on a company's share of total covered emissions, with specific emission equivalents set for coal, crude oil, and fuel gases (SEC. 3). Think of it like this: the more you polluted, the bigger your bill. Companies can choose to pay in installments over nine years, but the total amount remains the same. This collected cash flows into the newly created "Polluters Pay Climate Fund" (SEC. 4).
Where the Money Goes: Resilience and Justice
So, where does this $1 trillion go? The bill outlines a range of climate-focused initiatives, including disaster recovery, climate-resilient infrastructure, and improvements to the energy grid (SEC. 4). It's not just about patching up after storms; it's about preparing for the future. A farmer in a drought-prone area might see new irrigation systems funded, while a coastal city could get help building stronger seawalls. There's a strong emphasis on environmental justice, too, with 40% of the funds earmarked for projects benefiting communities disproportionately affected by climate change (SEC. 4). FEMA gets a guaranteed $15 billion annually for disaster response and resilience, with at least $3 billion going to the Building Resilient Infrastructure and Communities program, and another $6 billion will go to grants and technical assistance under section 138 of the Clean Air Act (SEC. 4).
Keeping it Real: Legal and Local
This bill doesn't let polluters off the hook for past actions. It specifically states that companies can still be held liable for damages caused by their emissions (SEC. 5). States and local governments also retain their power to regulate greenhouse gases and pursue their own climate initiatives (SEC. 6). Basically, this is an additional layer of accountability, not a replacement for existing laws. While the bill sets minimum funding levels for certain programs, the specifics of how the rest of the money is spent will be determined by the Secretary of the Treasury, the EPA Administrator, and other agency heads, using criteria designed to prioritize projects with the biggest impact (SEC. 4). This is where things could get tricky. With a lot of money on the table, there's the potential for things to get political.