Should polluters pay? California’s climate ‘superfund’ plan may have stalled

In the battle over how to pay for damage wrought by climate change, California lawmakers had an idea: Create a “superfund” that makes big polluters pay.

The Polluters Pay Climate Superfund Act of 2025 would make the world’s largest sources of greenhouse gases from fossil fuels financially responsible for the damage caused by wildfires, droughts and other events exacerbated by the warming climate.

The idea adopts the “Superfund” model — created by Congress in 1980 to clean up the nation’s worst toxic waste sites — and applies it to greenhouse gases, aiming to hold companies financially accountable for emissions that drive climate change.

New York and Vermont have already enacted similar measures despite massive opposition from the oil and gas industry.

But the proposed California legislation has stalled since April, even as environmental groups — galvanized by the death and destruction of the January Los Angeles wildfires — have made it a top priority.

Identical versions in both legislative houses have sat idle in Assembly and Senate committees despite a full-court press by supporters framing the superfund as a solution to California’s $12 billion budget deficit. The bills passed out of their first committees but have not advanced further.

“Nobody can afford the kind of financial crisis that the climate crisis has caused,” said Assemblymember Dawn Addis, a Democrat from San Luis Obispo, one of the authors, told CalMatters. “Oil caused the climate crisis, in large part … they lied about it as they caused the damages, and it's time for them to come to the table and create more affordability for the very people that they've harmed.”

The funds would be earmarked for paying for community disaster preparedness, such as evacuation planning and emergency housing, as well as energy efficiency, zero-emission fleets and charging, and natural resource protection, among other projects, according to the bill.

Opposition includes oil companies and major business groups. In addition, despite worsening wildfires and floods, many Californians have been increasingly voicing concern that the state’s climate policies are driving up gas and electricity costs.

Oil and gas industry lobbying has been fierce. Jim Stanley, a spokesman for the Western States Petroleum Association, the industry’s top lobbying group in the West, said in a statement that the measures were “misguided proposals to retroactively punish companies for providing a legal product that was, and remains, critical to our state's economy."

He said that "at a time when Californians are struggling with a cost-of-living crisis, these bills will likely result in massive price increases for gasoline, diesel, natural gas, electricity and consumer goods."

The climate superfund also faces resistance from a powerful ally of Big Oil: California’s State Building and Construction Trades Council, a key union that has repeatedly backed the industry’s positions, as CalMatters has previously reported.

Earlier this year, the council also opposed legislation by state Sen. Scott Wiener, a Democrat from San Francisco, that would have allowed residents to sue oil companies for climate damages.

In April, Keith Dunn, a lobbyist for the trades union, told an Assembly committee that the climate superfund would drive up energy prices, kill middle-class jobs and act as a stealth tax on working families. “The affordability gap is widening,” Dunn told lawmakers. “It's not by chance, it's by choice.”

Both measures include “urgency” provisions, which allow them to take effect immediately if passed by a two-thirds vote and signed by the governor. That higher threshold makes them less vulnerable to certain legal challenges and exempts them from the usual legislative deadlines. (Most bills must clear their house of origin by today.)

“There was quite a bit of opposition earlier in the year so we're continuing those conversations,” Addis said. “We have time to have those conversations.”

The bill would make companies pay for emissions from “the extraction, production, refining, sale, or combustion, including by third parties, of fossil fuels or petroleum products,” which includes oil, gas and coal.

Bill targets multinational corporations

The bill applies to companies that emit more than a billion metric tons of global emissions from 1990 through 2024 — that means multinational oil and gas corporations. Within three months of the law taking effect, the agency would publish a list of companies that would pay into the fund.

There are no official estimates as to how much companies would pay. The legislation would require the California Environmental Protection Agency to estimate costs from past and projected climate damages to people, governments, ecosystems and infrastructure every five years through 2045, using peer-reviewed science.

“It is imperative that we make polluters that caused a large percentage of the climate crisis pay for the thing that they knowingly caused,” said Maya Golden-Krasner, an attorney with the Climate Law Institute at the Center for Biological Diversity, which has sponsored the California bills. “They've known that this would cause damage since at least the 1950s, they knew that these greenhouse gases would be regulated since the 1990s and they've been gaslighting us all the way and blocking climate regulation.”

The climate superfund fight is part of a broader national movement against major oil companies that is playing out in legislatures and courtrooms across America.

California is leading efforts to hold oil companies accountable in court for climate change, recycling a legal strategy deployed during the 1990s, when states alleged that tobacco companies knew cigarettes cause cancer.

Trump-era politics have also been at issue. In April, President Donald Trump signed an executive order targeting state climate programs, specifically calling out Vermont's and New York’s polluter-pays laws and threatening legal action against California’s landmark cap-and-trade program.

Backers say the climate superfund is a fair solution to California’s budget crunch as well as a long-overdue reckoning for an industry that knowingly caused the climate crisis.

But the plan — which could cause oil and gas companies to pay billions for emissions over the last three decades — faces an uphill battle in Sacramento.

Last year, Californians voiced strong opposition to plans to overhaul one of its cornerstone climate programs, the Low Carbon Fuel Standard, which could push gasoline prices higher. Last week, Assemblymember Jasmeet Bains, a Democrat from Bakersfield, called for California Air Resources Board Chair Liane Randolph, who led the board in its passage of that measure, to resign over cost concerns.

Likely to trigger a legal onslaught

If enacted, the climate superfund would almost certainly trigger a wave of legal challenges. Donald Sobelman, a San Francisco environmental attorney, told CalMatters that the bill is legally ambitious — and is almost certainly headed for a courtroom challenge if it passes.

The Trump administration, for instance, sued New York and Vermont over their climate superfund measures, arguing they are unconstitutional.

Another potential legal argument, Sobelman said, is that the measure could charge companies now for pollution emitted years or even decades ago. Another is that the measure could act like a tax, which could make it easier to challenge in California court without two-thirds approval by the Legislature.

And some judges may question whether the science linking the emissions to worsening fires and other climate events is strong enough to single out specific companies for climate damage, leading to the “classic battle of the experts,” Sobelman said.

In addition, courts could determine that consumers hold some responsibility for their actions, such as driving cars and trucks powered by fossil fuels, and that other industries around the world, such as power plants and farms, also emit a lot of greenhouse gases.

A spokesman for Gov. Gavin Newsom declined to tell CalMatters whether he supports the measure.

In his May budget proposal, the governor adopted “polluters pay” language to rally support for an existing California climate program, cap-and-trade, which raises money by selling pollution credits to companies.

The debate is unfolding amid a worsening budget crisis in which lawmakers are under pressure to find new revenue sources — especially ones that don’t involve tax hikes on Californians. Supporters of the Superfund Act argue that the bill offers a “polluter-pays” principle rather than new taxes.

Newsom’s budget proposal said extending cap and trade “aligns with the polluter-pays principle in which carbon emitters will fund the state’s world-class forestry and fire protection programs in the face of wildfires that have become increasingly destructive because of climate change.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.