This interview was initially posted on Maryland Energy Talk Podcast, hosted by Jamie DeMarco.

Jamie DeMarco: Right now, Marylanders are paying for the cost of climate change. Higher tides, hotter heat waves and heavier rain events are damaging infrastructure and requiring expensive repairs all across the state. Public schools that never needed air conditioning for over a hundred years now need to have A/C installed at great expense to taxpayers. Saltwater intrusion is making what used to be agricultural land infertile, slashing property values and as a result, property taxes to the state. Forty years ago, nine inches of rain was a once-in-a-century rain event. But today, nine inches of rain is at least a once-in-a-decade rain event. And none of our stormwater management systems are designed to handle that level of increased precipitation. Many of those systems are in the middle of expensive upgrades and where the systems aren’t being upgraded, floods are damaging people’s homes. 

You can throw a dart at the map of Maryland and wherever that dart lands, you will find stories of state funds being used to pay for the damages caused by climate change. Those costs are not optional. If a road floods regularly at high tides, people need to be prepared—and fast. Right now, the Maryland taxpayer is paying for all of those costs. Climate damages are contributing to the projected budget deficit in Maryland. Thankfully, Maryland’s senior US Senator Chris Van Hollen has developed an innovative policy that will make the largest international fossil fuel companies pay for the cost of climate change and ensure that they cannot pass that cost onto consumers. He has introduced his Polluter Pays Act in Congress and that legislation has inspired a state version of policy called the RENEW Act, which Senator Hester, Delegate Fraser-Hidalgo and Delegate Boafo have introduced in Maryland. Making polluters pay is extremely popular with a full 70% of Marylanders supporting it. The policy has growing momentum and has been enacted in multiple states. It’s easy to see why: it provides immediate taxpayer relief at a time when the cost of living never seems to stop rising. I am thrilled that my Senator, Chris Van Holland, is my guest today on Maryland Energy Talk to discuss how we can make polluters pay for the cost. Of climate change in Maryland. Senator Chris Van Holland, thank you so much for making time to talk with me today.

Senator Chris Van Hollen: It’s really great to be with you. 

JD: First, I just want to give a heartfelt thank you on behalf of myself and I’m sure everyone listening for defending our Constitution and our country and rising to meet this moment and all that you are doing. It is so challenging. I can only imagine. But we are so grateful to see you leading the helm of defending our country.

CVH: Well, I appreciate your saying that and I want to thank all Marylanders who’ve been rallying to work with us to defend our Constitution and prevent Elon Musk from essentially taking over federal agencies. Here you have the world’s richest man and they’re trying to push out qualified federal employees who do good work on behalf of the American people every day and bring in their cronies. Their long term plan is to give a big payoff to the big oil companies. Right. Donald Trump promised, you know, everything they wanted if they contributed $100 billion. I mean, that was one of the most out front, blatant kind of political bribery cases I’ve ever seen. So you know what we’re up against. But thank you.

JD: Well, believe it or not, we are actually here today to talk about a good policy, something moving the ball forward and advancing the causes that we all care about. And so you have introduced the Polluters Pay act into Congress. It is a terrific bill that is going to bring a trillion dollars worth of revenue into the United States to be invested in all sorts of great climate adaptation programs without costing any United States citizens a single time. It’s an incredible win, win, win solution. How is this possible? Can you just speak to what the bill does, how it works and why it is so effective?

CVH: Sure. And I think it is important to highlight this because I think most Americans agree with the simple principle behind this bill, which is that the big polluters who created the pollution mess around us in the form of climate change and other factors should be the ones who have to pay the most to clean up the mess they cause. This should not be a cost that’s passed on to taxpayers, whether across the state of Maryland or across the country.

JD: It’s just the case right now. We’re all paying for it. 

CVH: That’s right. Look, we’re all paying for it. I mean, when something happens down in Annapolis because of sea level rise, it’s the taxpayers in form another who pay. In Ellicott City, you know, we had two 1000-year floods in a very short period of time, not a thousand years between them. Right now everybody is paying the cost. Every American is paying in some form or another for these costs that are being driven by these huge oil and gas companies. They’re making huge profits from these actions. So they should use some of those profits to create this fund. It’s $100 billion a year over a 10-year period. And the fund would be used to help cover the costs of these huge disruptions being caused by climate change, whether in Annapolis, Ellicott City or someplace else.

JD: That is wonderful to hear. And it’s a one time payment on these companies, which is not a new model, is, you know, based on the Superfund model where a company or group of companies contaminate a site and then they’re required to pay into a fund to remediate the damage. This is not a new concept, it’s just this time the site happens to be the global atmosphere.

CVH: That’s exactly right. When you think about hazardous waste disposal, it’s based on the same concept. The Superfund was established because everybody agreed that it should not be consumers that have to pay the cost of cleanup. When a private company dumps hazardous material, toxic material in any particular place, that is the responsibility of those entities that are profiting from whatever enterprise they’re engaged in. It should not be the taxpayer, should not be the consumer.

JD: And most importantly, we know that that cost is not passed on because this has been done before. We’ve seen Superfunds do not increase consumer prices because it’s born by a small subsection of the entire industry. And so market competition ensures costs stay down. We have Nobel Prize winners, as you know, who have economics who have said that this policy will not increase prices. The cost cannot be passed on to consumers. I think that’s very well established.

CVH: That’s a very important point and it’s worth emphasizing, right. This does not add to the cost of production. If you’re a company and you’re out there drilling for oil and gas, we’re not applying this fee to those ongoing operations. We’re only applying it to help clean up the past harm they caused. And as you indicated the way we structured it, there are a very, very small number of companies that will have to pay this fee. Those companies will still have to compete in the larger global marketplace for oil and gas. So they’re not going to be able to raise the prices they charge because there are others that aren’t having to pay this fee, that are not paying, that are not having to recover those costs. And they don’t. So they don’t have to recover these costs. So these are huge companies. I mean, these are some of the biggest companies in the world. I will say that the amount of money we’re talking about here is not going to threaten their operations in any way.

JD: It’s a small percentage of what shareholders take home every year. 

CVH: A very small percentage. 

JD: And as we talked about earlier, the United States government is currently led by people who not only want to take us backwards on climate, but seem intent on destroying a rules-based order and a constitutional democracy. But luckily at the state level we can make progress. And we’re really grateful to Senator Hester and Delegate Fraser-Hidalgo as well Delegate Boafo who have introduced the Responding to Emergency Needs from Extreme Weather or RENEW Act at the state level, which is the sort of state inspiration of your bill. At the federal level, does it work just as well to do this policy? Can states enact this policy in addition to the federal government introducing it?

CVH: Yes, they can. And I’m really thankful to those legislators for moving forward. I hope that the General assembly will pass these bills and the governor will sign these bills. The state of Vermont, State of New York and more have already enacted similar bills modeled after our National Polluter Pays Fund. And I do think it’s important to say that it’s sometimes the case when an idea first is raised at the federal level. We’re not able to pass it all at once here. But the states take these ideas up and the ideas germinate there and then they pass legislation at the state level. And then at the federal level people say, hey, you know, that idea we had a long time ago, it really does work and we pass it at the federal level. And I’m not just making this up. That’s exactly what happened to Green Bank legislation that I introduced back in 2009. We could not get it passed out of the Congress. In 2009, a number of states and local jurisdictions passed their own versions of the Green Bank. And finally, fast forward in the Inflation Reduction act we finally included a national Green Bank equivalent. I will say there are many times where it works in the reverse where the idea begins at the local level, germinates there, then travels to the federal level. So it works both ways. But the bottom line is this is an idea whose time has come. I would argue it came a long time ago and we need to make sure we do it now. And so Maryland is well positioned to once again be a leader.

JD: And it feels especially important in this moment where we are watching aid from the federal government be eliminated or politicized. You know, a month ago we couldn’t have imagined that USAID would have been deleted overnight. And thanks for all your work to get that back. Hopefully when you’re listening to this, maybe it’s been restored. And we’ve heard Trump say that we have to take a hard look at fema. We’re already Seeing rumblings on the right about making [wildfire] aid to California contingent on political concessions. And the thought terrifies me of Maryland experiencing a natural disaster and then being forced to compromise on our values to receive aid from the federal government. And it just seems more important than ever for states to have their own funds so that if a natural disaster strikes, we don’t have to compromise on our values because of who’s in the federal government.

CVH: I think that’s absolutely right. Right. I think what we’re witnessing here at this moment is, you know, folks wanting the federal government to abandon some of the traditional responsibilities the federal government has had, at least in recent times, like FEMA, like people talking about getting rid of FEMA. It took a lot of persuading to get the federal government to pay 100% of the cost of the replacement of the Key Bridge collapse.

JD: And you were instrumental in making that happen. 

CVH: Well, I was proud to fight for that and I’m glad we got the 100% funding done. But at one point in time, you know, that would have been sort of assumed that the federal government would take on responsibility when it was such a disaster of such a large scope that—clearly one state really cannot handle it all by itself. But now that’s no longer the case and the trend is away from that with Trump in the White House. So I do think states should become more self-sufficient when it comes to providing emergency funding sources or ongoing funds in this case, to address what are ongoing costs. I mean, every day we’re seeing the costs of climate change disruption.

JD: It’s a really tragic trend and makes the passage of the RENEW Act even more important in so many ways. We should speak briefly, I think, on constitutionality. I know at the state level we’ve gotten favorable testimony on the bill from Maryland’s Attorney general. We also have a letter saying that this can be enforced. You know, can you just speak to why this is constitutional and why the Constitution doesn’t prohibit this kind of one-time fee.

CVH: Well, first let me emphasize the fact that when we introduced the federal bill, we made it very clear that there was no intent to preempt state action through the federal legislation. It’s written right into that piece of legislation because the idea was that states should move forward on their own and that they had the constitutional authority to do so. That was the opinion that the states of Vermont and New York received. And the same is true in the state of Maryland. States are allowed to enact these laws to effectively recover damages for harm that they’ve been caused. And we should not expect the federal taxpayer to have to pick up the debt or the state taxpayer in this case.

JD: And that preemption is really important because this is not a lawsuit. You know, this is a legislative approach to receiving compensation for damages. States and localities can and still should bring legislation. And both in the federal bill and state bills, it’s put right in there. You know, this does not preempt or prevent additional litigation in addition to this legislation. And, and that, you know, in Maryland, we’ve had some recent unfortunate rulings in Anne Arundel county and in Baltimore putting a pause on those cases. I think those are bad decisions. Those judges are definitely in the minority. Judges across the country and dozens of instances have ruled on this and ruled in the opposite direction. We think this will get overturned. But it’s no reason not to move forward with this bill at the state level because it is a fundamentally different thing. The state of Maryland will pass this law and then the lobbyists, the fossil fuel industry presumably would sue the state of Maryland. So we’d actually be on the opposite end of the courtroom as if we were suing those fossil fuel companies.

CVH: That’s right. Look, and this is why in the federal legislation, the Polluter Pays bill, we made two things clear. One, that this does not in any way preempt states from enacting their own statutes using the Superfund model. We also made it clear that it was not intended to preempt any litigation that was brought. But I think if you look at what the RENEW Act does, like the Polluter Pays bill, it is based on very firm precedent that was established with the Superfund legislation, which we’ve already talked about.

JD: I’ve heard at least one state lawmaker say to me, you know, Jamie, this is of international importance because we’re doing a one time taking from these oil companies. Some of them include national oil companies like Saudi Aramco and that might have international diplomatic relations. As one of the Senate’s leading experts on international relations, in particular the Middle East, do you have any concern about relationships with our partners if we pass this legislation either at the federal government or at the state level?

CVH: I do not. I think, as you know, the oil market is a global market. You have these huge players. The companies impacted by this bill are some of the biggest players in the world. They have contributed significant contributions to climate change, which of course is a global phenomenon. And it obviously has had a negative impact on the State of Maryland and is costing people in the state of Maryland. So what the RENEW Act is doing at the state level, what the Polluter Pays Act is doing at the federal level, is working to create a structure that allows, in one case the people of the United States and in the other people, the state of Maryland, to use these resources to help pay for the costs of, you know, major disruptions, whether it’s in Annapolis or Ellicott City or wherever it may be that are brought on by climate change that has been caused by these huge polluters.

JD: Well that means a lot coming from you considering your global expertise and I think especially now given who’s in the federal government and the executive branch, one of our nation’s leading experts on our international relationships.

CVH: Well, look, I appreciate that we obviously always need to take into account impacts of actions we take on our relations with other countries. But in this case there’s a clear nexus between the actions taken by those huge corporations and the harmful impact in the state of Maryland. And so my view is we should proceed with this and these big oil companies will do just fine and it will not disrupt our relations with these other countries.

JD: And we should say that in order to be subject to this one-time penalty, you do have to sort of do business, sell your product in the place of jurisdiction. So if the United States enacts it, you’d have to sell your product in the United States of America and you have to sell oil in Maryland. Luckily, for better or for worse, I suppose oil is a global commodity. So if you are selling oil into this global market, it is almost inevitable that some gallon or barrel that you sell is going to end up being sold in Maryland. And that is sort of why we, the United States and/or Maryland have the jurisdiction to bring this forward.

CVH: Well, and that’s certainly true with respect to these giants, right? Oil, gas company giants. And there is a nexus between Maryland and those global oil producing oil giants, in the case of the Polluter Pays Act, a bill at the federal level with nexus between the activities of those global giants and the United States. So yes, that nexus is there.

JD: And we’ve talked a lot about why it’s a good idea to get this money, how we can get this money, how this money will not be passed on in forms of cost to consumers. But what excites you about how the money can be spent, how you spend it in your bill or how in your vision it could be spent at the state level. What in your wildest dreams can we invest in and make our world better with these funds?

CVH: Well, let’s just start with Maryland. And again, I know I mentioned Annapolis, but that is a huge cost. If you go down to the waterfront in Annapolis and you talk to small businesses right after a massive flood, it’s caused them damage, it’s cost them money. And so the city of Annapolis has a great project, it’s going forward. That is the kind of thing we would be paying for with these funds as opposed to taxpayers. The same is true in Ellicott City, which has been, you know, twice hit by these huge floods. But, you know, when I talk to folks on the Eastern Shore, there are lots of important uses we can put these monies to, to mitigate flood damage by building more buffer zones and all sorts of wetlands restoration. There are. There are important uses of these funds that, you know, both add to, you know, the quality of life in these areas and at the same time are addressing harm down to climate change.

JD: And I think what’s really important about the examples you’re giving is these are all things the state of Maryland is already doing. So these are costs coming out of the state and local budgets. This is contributing to the budget shortfall. This is not money we would bring that would go to some other new project that we’re not currently doing. This is to close existing gaps because Maryland taxpayers should not be burdened with the financial cost of what these international oil companies have caused.

CVH: Well, that’s exactly right. Look, I know that there’s an ongoing debate as we speak in Annapolis with respect to closing a sizable budget deficit. And, you know, Maryland taxpayers should not have to be shelling out funds to pay for, you know, challenges, problems caused by these huge oil companies that are reaping huge amounts of profits. Right. It’s a simple principle. Those who contributed the most to the mess should pay the most to clean up the mess. I think we should all be able to agree on that fact.

JD: Yeah, I think that should be a common point of agreement. Relief like this is essentially, by passing this legislation, Maryland would just be accepting a multibillion dollar check to fund existing programs and close a budget gap, which seems like something, if I were a lawmaker, I would be really interested in doing.

CVH: Right. Look, the money’s going to have to come from somewhere, right? I mean, the damage and harm is being done. We have to both pay to restore certain areas and also prevent and mitigate future damage. That has to be done. So the only question is who pays? Not whether somebody pays. Someone’s going to have to pay to clean up the mess to prevent future messes.

JD: If it’s not the oil companies, it’ll be the Maryland taxpayer. 

CVH: If it’s not the oil companies, it’s the Maryland taxpayer at the end of the day who’s going to have to put the bill. So, yes, I would, I would think if you’re in Annapolis and you’re trying to think of where you’re going to get revenue to address the harm caused by these climate impacts, you would say let’s go after the folks who cause the most harm. Let’s not go after Maryland taxpayers.

JD: That makes a lot of sense to me. Is there anything else that you wanted to say about making polluters pay in Climate Superfund and the RENEW Act in Maryland?

CVH: Yeah, I just want to, you know, pick up on this theme we discussed earlier, which is that, you know, states can be real leaders when it comes to shaping, you know, our federal policies. I mean, they are the places where, you know, a lot of these ideas, if they don’t always start at the state level, they can still rise from the state level in terms of implementation. And so here we have an idea that was as part of the Polluter Pays bill here at the federal level. And I want to thank you and others in Maryland that we worked with on these issues, CCAN and others. But this is an opportunity for Maryland to do what it’s done so often when it comes to cutting edge issues in our country, including these big issues on environmental challenges and climate change, which is to be in that pack of leaders among the states. We have New York already, we have Vermont. Maryland can join the ranks and then we’ll continue to see that snowball effect. We’ll see momentum develop. And I think that momentum will then go right around the country and come right back here to Congress at a time when in the future voters willing will be ready to take this on at the federal level and pass it at the federal level. This is exactly what happened with the Green Bank idea. I introduced that back in 2009. It did not get out of Congress. It went local, including many places in Maryland. And then as part of the Inflation Reduction Act a few years ago, we were able to put that in place. And you know, Vice President Harris came to Maryland to make the announcement. So I see the same pathway being created for the Polluter Pays act, which is that an idea that, you know, we could not get out of Congress in the last few years, builds momentum in places like Maryland and then, and then we come back to do it at the federal level. But Maryland has been a great leader. This is an opportunity for them to continue that leadership and at the same time, make sure that it’s big whale companies that are footing the bill, not Maryland taxpayers.

JD: Well, you have left me feeling a lot of hope in a very hard time, so thank you. And we will do our very best in Maryland to help boost you at the federal level by passing the RENEW Act this year. 

CVH: Well, it’s great to be with you. And I do want to thank all our legislators in Annapolis and the House and the Senate, of course, the governor. They got a lot on their hands, but I do think the RENEW Act can be a very important part of their overall strategy. 

JD: Thank you so much for talking with me today, Senator. 

CVH: Good to be with you, Jamie. 

JD: And thank you for listening to Maryland Energy Talk. One day, Marylanders will wake up to a world where our electricity is 100% clean. That clean electricity powers every aspect of our lives. It will be more affordable, more prosperous and healthier world than what we live in today. When that day comes, we will spend less on energy. You know, the days when a foreign autocrat invading their neighbor would cause the cost to keep your home in Maryland to spike will be long gone. And instead, our energy bills will be as predictable as energy bills. The average Maryland household will save up to $4,000 annually in reduced energy costs. That’s because even right now, solar batteries and onshore wind can produce electricity at lower costs than coal or gas. Heat pumps can heat your own for less than their pollution alternatives. And electric vehicles are cheaper to drive than their gas equivalents. And the costs for each of these clean technology are dropping fast. Right Now, Maryland sends $10 billion out of state every year purchasing oil and gas. But on that day, all of that money is going to stay in Maryland, because for the first time, we’ll be generating our own energy instead of importing it. There will be better public transportation options, so fewer people will be forced to buy a car, and all of us will spend less time in traffic. We’ll have more jobs. Maryland as a whole will see a $2.5 billion increase in personal income and a net gain of over 27,000 jobs for the state. We will be healthier. Maryland will enjoy $1.2 billion to public health benefits. That means fewer people living with chronic pollution induced illnesses like asthma and fewer emergency room visits, putting downward pressure on healthcare costs for everyone. We will wake up in that better world one day. And whatever role you play in making that day closer, thank you.

Learn more about the RENEW Act