Where the Climate Buck Stops

The climate crisis isn’t just about the weather. It’s about money, too. The costs of extreme weather events—severe storms, hurricanes, floods, wildfires, and drought—in the United States have surpassed $100 billion per year since 2020, a threshold previously breached only in “one-in-a-century” hurricane years. Disaster damages, relief, and recovery spending are pressing the budgets of households, businesses, and local and state governments to a breaking point.

Even more money is needed for investments in climate adaptation to head off bigger damages in the future. For example, New York City’s Extreme Weather Response Task Force, formed in the wake of Hurricane Ida in 2021, calculated that the price tag for multiyear sewer system upgrades to protect the city from catastrophic flooding of the subway system during extreme rainfall events will be $100 billion.

At the same time, fossil fuel companies reap big bucks. In 2023 the top 15 oil and gas corporations operating in the United States booked $172 billion in profits.

Meanwhile the Trump administration is slashing disaster aid and gutting long-term adaptation investment with a zeal that recalls Emperor Nero’s proverbial fiddling while Rome burned. For extra measure, in February the Environmental Protection Agency (EPA) rescinded the endangerment finding that authorized the government to regulate greenhouse gas emissions. The official line is that climate destabilization is not happening. But the experiences of communities across the country make it clear to anyone paying attention that it’s all too real.  

In 2024, after a public outcry sparked by massive floods, Vermont and New York passed climate superfund laws requiring large fossil fuel firms to contribute to climate adaptation. When these laws take effect, firms whose fuels added more than one billion tons of carbon dioxide to the atmosphere in the past will pay annual assessments to help cover the resulting costs. The Vermont law does not specify the amount, pending a cost accounting by the state; the New York law pegs the total at $75 billion over 25 years. Similar bills are being considered in other states. 

Five U.S. senators, led by Maryland’s Chris Van Hollen, have sponsored a federal bill to create a Polluters Pay Climate Fund that would assess fossil fuel companies $1 trillion over a period of nine years. The basic idea behind these funds is simple: those who profited the most by creating a mess should pay the most to clean it up.

These initiatives have sparked furious pushback from the fossil fuel lobby. As outright denial of the crisis becomes less credible, the industry is reverting to its fallback strategy: blame the consumer. Decrying climate superfunds and liability lawsuits, a spokesman for the American Petroleum Industry complained that these seek to “retroactively punish energy producers simply for meeting consumer demand.”

This is not a new gambit. In 2004, international oil giant BP (formerly British Petroleum) unveiled an online “carbon footprint” calculator for consumers to compute the carbon emissions from their daily lives. Other Big Oil firms have used the same playbook. The strategy bears an uncanny resemblance to earlier efforts by tobacco companies to blame smokers for the health effects of their products.

Students of economics will recognize the intellectual antecedents of this public relations ploy in the doctrine of “consumer sovereignty” in introductory textbooks. The idea is that in a world of perfect markets, where innumerable mom-and-pop producers supply our goods and services, consumers call the tune. Like any deceptive concept, it has an element of truth: consumers are not entirely powerless (as the history of boycotts shows) and carbon footprints are useful, for example to gauge the distributional effects of changes in fuel prices.

But in the real world where giant firms set the menu, consumer sovereignty is a smokescreen for corporate power. It was not consumers who charted the nation’s energy and transportation destiny; it was the fossil fuel industry. And it’s not consumers who reaped billions in profits by extracting fuel from the ground and extracting billions in subsidies from taxpayers. Blame shifting is ideological cover for cost shifting. 

Climate superfunds are a sensible way to put some of the costs back where they belong, but we’ll get them only if the public demands them. To paraphrase the American songwriter and labor martyr Joe Hill, the moral is clear: Don’t feel guilty, organize!

James K. Boyce is a senior fellow at the Political Economy Research Institute at the University of Massachusetts Amherst. He is the author of Economics for People and the Planet.