California's plan to ‘Make Polluters Pay' for climate change stalls again. Why oil companies are fiercely opposed

Los Angeles Times

07-07-2025

California lawmakers have for years vowed to hold fossil fuel companies liable for damages caused by their emissions, including worsening wildfires and floods and mounting costs of climate recovery and adaptation. But the state's so-called Climate Superfund bills have once again stalled in Sacramento amid fierce lobbying and industry pressure — leaving communities to cover the costs.
The latest version of this effort, Senate Bill 684 and Assembly Bill 1243 — known as the Polluters Pay Climate Superfund Act — would require the largest oil and gas companies doing business in the state to pay their fair share of the damages caused by planet-warming greenhouse gases. The fees would be collected into a Superfund that would be put toward projects and programs to help the state mitigate, adapt and respond to climate change.
The legislation gained momentum after its introduction by Sen. Caroline Menjivar (D-Panorama City) and Assemblymember Dawn Addis (D-Morro Bay) in the wake of January's devastating wildfires in Los Angeles, but neither made it out of its house of origin before sputtering out. Officials have confirmed to The Times that the legislation has been put on hold until next year.
A similar bill introduced by Menjivar last year also failed to progress, clearing three committees before dying in Senate appropriations.
New York and Vermont both passed their own versions of the legislation last year, but climate-conscious California continues to struggle to push its iteration over the finish line as deep-pocketed oil companies rally hard against it — and as the White House ramps up federal directives for more oil and gas.
In the first quarter of this year alone, fossil fuel companies, chambers of commerce and other opponents spent at least $10.6 million lobbying against the Climate Superfund Act and other state legislation — more than 10 times the amount spent by environmental groups working to see it passed, according to an analysis of state filings. (Filings list all bills lobbied by an organization but do not break down how much was spent on each individual bill.)
'Any time you go up against Big Oil, it's a huge struggle,' Addis told The Times ahead of the bills' postponement. She said the state's strong climate record has made it a magnet for fossil fuel opposition. 'I really think they've turned everything toward California to try to slow us down.'
The Climate Superfund Act is modeled after the federal Superfund law that requires companies to pay for the cleanup of contamination caused by their activities, such as hazardous waste disposal or accidents and spills.
The state's proposed climate version would direct the California Environmental Protection Agency to identify responsible parties — defined as oil companies responsible for more than 1 billion metric tons of CO2 emissions globally from 1990 to 2024 — within 90 days of enactment. The agency would have one year to conduct a comprehensive study to apportion damages to each polluter based on their emissions from that time period, which would be assessed as a one-time fee paid into a Superfund in annual installments.
The funds collected from these companies would be earmarked for projects such as wildfire recovery, energy efficiency upgrades, community resilience infrastructure and other climate-related efforts. At least 40% of the money would be prioritized for disadvantaged communities, which suffer disproportionately from pollution and other environmental harms.
Advocates say it's long overdue.
'This is a really big idea that makes a lot of sense,' said Maggie Coulter, senior attorney with the nonprofit Center for Biological Diversity's Climate Law Institute. 'When you make a mess, the people who made the mess should be the ones who clean it up. But right now what we're seeing is that taxpayers are the ones paying for all the myriad damages that are being caused by climate change, and by the pollution that's come from the burning of fossil fuels.'
Fossil fuels account for about 75% of greenhouse gas emissions — the primary driver of global warming that is contributing to more frequent and destructive disasters such as wildfires, floods, droughts and extreme heat, as well as sea level rise and air pollution, according to the Intergovernmental Panel on Climate Change and many other experts.
Damages caused by these events include not only property loss but also rising healthcare and insurance costs, reduced productivity, increased emergency disaster response and costly infrastructure repairs, much of which is traditionally borne by the public.
'The consequences of climate change come with a huge price tag that is only increasing,' state Senate officials wrote in their analysis of the legislation. They noted that wildfires in California in 2020 caused economic losses of more than $19 billion. The cost of January's fires in L.A. alone is estimated to be $250 billion.
'With or without this bill, the costs of climate disaster recovery, adaptation, and mitigation will climb and must be paid,' the analysis says. 'The question then is, 'Paid by whom?''
Despite a groundswell of support for the legislation after the L.A. fires, the idea continues to face considerable opposition from oil industry groups, chambers of commerce and building and trade organizations that say it will kill jobs and drive up the cost of oil in the state.
Among the top organizations spending against the bill in California were the Western States Petroleum Assn. — a large trade group representing fossil fuel companies — and the California Chamber of Commerce, which reported spending about $3.5 million and $1.2 million, respectively, on lobbying this quarter, state filings show. (Reporting is required for spends of $5,000 or more.)
When asked about their concerns about the Climate Superfund Act, both groups deferred to a joint letter sent to the Senate Environmental Quality Committee in March, signed by about two dozen opposition groups.
The legislation 'would impose retroactive liability on companies for lawful business activities dating back to 1990 and would introduce significant regulatory uncertainty that threatens California's economic stability and competitiveness,' the letter says. 'The significant financial obligations the bill would impose on alleged 'responsible parties' would likely worsen California's affordability crisis for the state's consumers and businesses as costs are passed down.'
Western States Petroleum Assn. spokesman Jim Stanley also pointed to an analysis conducted by the California Center for Jobs & the Economy, which describes the legislation as a 'de facto carbon tax' that would ripple across goods, services and regional economies and create an annual household burden of up to $3,400.
Specifically, the analysis says the legislation would contribute directly to a 43% increase in gasoline prices by 2027; eliminate 205,000 jobs statewide due to reduced consumer spending; and result in a $30.5-billion reduction in state GDP each year from 2027 to 2046, among other negative outcomes.
Not everyone agreed with their assessment, however. Clair Brown, a professor of economics at UC Berkeley, has studied the Climate Superfund bill extensively and concluded that it would not increase gas prices in the state. That's because California's pump prices are primarily set by the global crude oil market, which is volatile, Brown said. What's more, she said major oil companies would continue to face market competition from smaller oil producers selling gas at branded and unbranded stations in the state, which limits the big companies' ability to raise retail gas prices without losing customers.
A California law passed in 2023, Senate Bill X1-2, also prohibits refineries from passing along nonoperational costs — such as the Superfund fee — to consumers, she said.
'The public's been paying for part of the operational cost of refineries and oil and gas for decades, and meanwhile the oil and gas companies lied about the impact of their emissions on global warming,' Brown said. (Evidence has shown that the fossil fuel industry knew about climate change decades before acknowledging it publicly.)
'One of the reasons that economists really like this bill is that it would actually internalize the cost,' Brown said. 'Then we would actually see the real cost of fossil fuel energy — and it would help us transition hopefully faster and with more equity.'
As for job loss, she said fossil fuel employment is affected not just by state demand but also by exports, which have been increasing in recent years. And while opponents argue that these companies have already been paying into the state's climate policies through cap-and-trade allowances and low carbon fuel standard credits, 'they don't overlap at all — they're totally different policies taxing different things,' Brown said.
The legislation 'makes really good economic sense,' she added.
It is not immediately clear to how many companies the Climate Superfund Act would even apply. According to Carbon Majors, a database of historical oil production data, there are about 130 global entities that produced over a billion metric tons of CO2-equivalent greenhouse gas emissions during the relevant time frame — only 26 of which operate in the United States.
A comprehensive study ordered by the legislation would determine which companies are liable in the state, and for how much. For example, Chevron is associated with about 16.6 billion metric tons of historic global greenhouse gas emissions since 1990, while Marathon is associated with about 2 billion.
It is also not immediately clear how much money it would raise. New York's Superfund bill has been valued at $75 billion over 25 years — though some analysts have said the number represents only a small fraction of that state's anticipated costs of climate adaptation in the years ahead, which could be well over $500 billion.
California could potentially see an even bigger payout, in part because oil companies conduct so much activity here. But it's a double-edged sword, Brown said, because the heavy presence of those companies in the state is also why they've lobbied so hard against the legislation. Oil and gas made up about 6% of California's gross domestic product last year, according to the American Petroleum Institute.
Gov. Gavin Newsom, who has championed California as a climate leader, has been mum about the bill. His team said the governor doesn't typically comment on pending legislation.
'If the measures reach his desk, the Governor will evaluate them on their merits,' his office said in an email.
Meanwhile, Calif. Atty. Gen. Rob Bonta has launched a climate liability lawsuit against top oil companies that seeks to establish a fund to finance climate mitigation and adaptation efforts, not unlike the Superfund idea.
Assemblymember Addis said pushing the legislation through in California has been an uphill battle.
'The oil industry pulled out all the stops here in California,' she said. Not only have fossil fuel companies spent millions in recent years to oppose oil and gas legislation, but 'they have a president in office now who has literally said 'drill baby drill' and gotten tens of millions of dollars, if not more, in campaign contributions' from the industry.
Indeed, Trump received record donations from oil and gas interests during his 2024 presidential campaign, and has taken steps to remove regulations that govern the fossil fuel industry in an effort to 'unleash American energy' and increase oil and gas production.
The Trump administration has also filed a lawsuit against New York and Vermont over their Climate Superfund bills, arguing they are unconstitutional.
Despite the setbacks, Coulter, of the Center for Biological Diversity, said the legislation continues to maintain support because 'it has that gut instinct appeal, and it's something that there's huge need for — particularly in California,' where worsening climate disasters are meeting with reduced federal funding and a significant budget deficit.
'This is a really big idea that makes a lot of sense,' she said.
She and other advocates noted that there is already precedent for the Climate Superfund Act in California. Since the 1990s, the state has implemented a law that assesses fees against producers of lead paint and leaded gas to help treat lead poisoning in children, known as the Childhood Lead Poisoning Prevention Act. The state's Department of Public Health collects the fee annually based on each company's market share responsibility for environmental lead contamination.
'It's become very much a part of the way to address these problems,' Coulter said.
The concept also remains popular among some local governments, which are increasingly bearing the costs of climate catastrophe. The L.A. City Council on Tuesday unanimously approved a resolution in favor of the Climate Superfund Act.
'The City of Los Angeles should support the Polluters Pay Climate Superfund Act of 2025 because it proposes to shift the burden of paying for the high costs of climate change recovery from California taxpayers to the businesses that have profited off the fossil fuel industry,' the resolution, introduced by Councilmember Katy Yaroslavsky, states.
Though neither bill will move forward this year, both can be taken up in 2026, the second year of the current legislative session.
Addis said she is hopeful that California will see its plan come to light. She recalled visiting constituents whose homes were flooded during 2023's devastating atmospheric rivers, which struck the state almost two years to the day before the L.A. wildfires.
'The real-life implications of these mega-weather events that are caused by the climate crisis, you can't turn your back on,' she said.