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How to pay for the Green New Deal: Make the fossil fuel industry pay
Last week, Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ed Markey (D-Mass.) introduced resolutions on a Green New Deal [H.Res.109/S.Res.59]. It outlines in broad strokes how the U.S. government should work toward the plan-a bold and potentially visionary set of policies to create a rapid drawdown of greenhouse gas emissions, provide for millions of well-paying jobs, advance equity and justice for communities on the frontline of climate change, and more.
While unanswered questions abound (including whether the proposed resolution will truly bring us the transformative changes we need), one question that opponents of the plan are quick to raise-and which must be addressed-is how do we pay for it? And while many supporters of the Green New Deal have brought forward a variety of possibilities, from public financing, to simply printing more money (aka the New Monetary Theory), to raising taxes on the wealthiest of Americans, there's a practical and profoundly fair answer that almost no one has brought forward: Make the fossil fuel industry pay.
To be sure, the question of funding has been raised by those who are invested in the status quo-particularly those who stand to gain the most from our current fossil fuel economy, including the Koch brothers, other billionaire CEOs, and the politicians in their corner. The question is often designed to raise the dreaded specter of taxes as a poison pill for action. So for those interested in advancing transformative solutions, it can be tempting to avoid this discussion of funding altogether. But avoidance won't make the question go away. The drastic changes in our energy sources, infrastructure, and more on the scale that the Green New Deal calls for will require significant funding. We must address how to pay for it-and we must pursue the most profoundly just option. The entities that have knowingly brought us this planetary disaster (and profited greatly from it) should foot the bill for reversing course.
Since the 1950s, major fossil fuel corporations were on notice that their operations and products posed significant risks to the climate. These warnings continued throughout the 1960s and onward, but rather than reduce those risks, these corporations worked in collusion to subvert climate science, interfere with policy, and ultimately undermine the need for urgent action at a global scale. By taking this path, the fossil fuel industry knowingly contributed to climate change and its devastating impacts.
Today, there is a growing movement to hold these corporations accountable for their actions. Cities, states, shareholders, young people, fishing associations, and more are bringing lawsuits against the fossil fuel industry. Just last month, the Supreme Court cleared the way for the Massachusetts attorney general to move forward with her investigation of Exxon Mobil. The Pacific island nation of Vanuatu announced it was considering suing the fossil fuel industry for loss and damages caused by climate change.
These lawsuits and investigations, though varied in their progress and success, point to liability litigation as a tactic growing in popularity. This holds great potential when we look at the historic precedent set by legal action taken against industries such as the tobacco industry. The 1998 Master Settlement Agreement was the result of action taken by state attorneys general of 46 states, five U.S. territories, and the District of Columbia against Big Tobacco. The settlement requires the industry to pay billions of dollars each year to the settling states-forever.
It's possible to imagine that a widely coordinated action against the fossil fuel industry could similarly generate billions of dollars each year to fund the swift and necessary changes we need toward a just energy transition. We can also imagine that this solution would work not just in the U.S., but also on an international scale-providing the funding necessary for Global South countries for whom climate change poses an existential threat.
Corporations like Exxon Mobil, Shell, and BP have profited richly from the extraction and burning of fossil fuels-made possible by their decades-long political interference designed to prevent climate action. By comparison, the people who have done the least to create climate change are bearing the brunt of terrible climate disasters, right now. This includes communities of color, Indigenous communities, and low-income communities in the U.S., not to mention countries like the Philippines in the path of severe storms and low-lying island nations like Vanuatu. If solutions like the Green New Deal are to succeed, they must address the fundamental root of our climate crisis-the fossil fuel industry. Making the industry pay is not only a practical solution; it is also the most fundamentally just way to fund the innovative solutions we need to survive.
Patti Lynn is the executive director of Corporate Accountability.