S.25 - Polluters Pay Climate Fund Act of 2025 (119th Congress)
Summary
The "Polluters Pay Climate Fund Act of 2025" (S.25) aims to address climate change by imposing a tax on fossil fuel emissions and establishing a fund for climate resilience and adaptation. The bill targets fossil fuel companies responsible for significant carbon dioxide emissions, requiring them to contribute to the "Polluters Pay Climate Fund." This fund will then be used for various climate-related initiatives, including disaster recovery, infrastructure resilience, and environmental justice projects.
The Act amends the Internal Revenue Code to create a new tax on fossil fuel emissions, calculated based on a company's share of covered carbon dioxide emissions. It also establishes the Polluters Pay Climate Fund within the Treasury, allocating funds for climate change mitigation and adaptation efforts. A significant portion of the fund (40%) is earmarked for investments benefiting environmental justice communities.
Finally, the bill clarifies that it does not relieve any person from existing liabilities under common law or other state/federal laws, nor does it preempt state or local regulations related to greenhouse gas emissions.
Expected Effects
The bill, if enacted, would lead to increased costs for fossil fuel companies due to the new tax, potentially impacting energy prices. It would also generate substantial funding for climate change mitigation and adaptation projects, particularly benefiting vulnerable communities. The Act aims to shift the financial burden of climate change impacts onto the fossil fuel industry, incentivizing a transition to cleaner energy sources.
Furthermore, the establishment of the Polluters Pay Climate Fund would provide a dedicated source of funding for climate resilience and adaptation efforts. This would enable the government to invest in infrastructure improvements, disaster preparedness, and environmental justice initiatives. The bill also aims to promote environmental justice by directing a significant portion of the fund towards communities disproportionately affected by climate change.
Finally, the Act's provisions regarding liability and preemption seek to ensure that existing legal avenues for addressing climate change-related damages remain open. This could lead to increased litigation against fossil fuel companies and further incentivize them to reduce their emissions.
Potential Benefits
- Provides dedicated funding for climate resilience and adaptation projects.
- Directs resources towards environmental justice communities, addressing historical inequities.
- Incentivizes fossil fuel companies to reduce emissions and transition to cleaner energy sources.
- Supports disaster recovery and mitigation efforts, reducing the impact of extreme weather events.
- Promotes investment in climate-resilient infrastructure and technologies.
Potential Disadvantages
- May increase energy prices for consumers due to the tax on fossil fuel emissions.
- Could lead to job losses in the fossil fuel industry.
- The tax calculation and fund allocation processes may be complex and subject to political influence.
- Potential for legal challenges from fossil fuel companies.
- The $100 billion annual assessment may not be sufficient to fully address the costs of climate change.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the US Constitution is complex. Congress has the power to tax and spend for the general welfare (Article I, Section 8). The establishment of the Polluters Pay Climate Fund and the allocation of funds for climate-related projects fall under this power. However, the tax on fossil fuel emissions could be challenged under the Commerce Clause if it unduly burdens interstate commerce.
The bill's provisions regarding liability and preemption aim to preserve existing legal rights and remedies, which aligns with the principles of federalism and states' rights. The bill does not appear to infringe on any individual liberties or rights protected by the Bill of Rights.
Overall, the bill's constitutionality is likely to depend on how the tax is implemented and whether it is deemed to be a reasonable exercise of Congress's taxing and spending power. A court challenge could arise if the tax is perceived as discriminatory or unduly burdensome.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).