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These companies are among the country’s largest contributors to climate change—and a new bill aims to make them pay for it

August 11, 2021, 6:00 PM UTC

A stark warning from the Intergovernmental Panel on Climate Change may have put major oil and gas companies even further into Congress’s crosshairs.

Less than six years after the world’s biggest leaders signed onto the Paris Agreement, the United Nations body that is the IPCC concluded Monday that the treaty’s goal of limiting increases to the globe’s average temperature to 1.5°C is effectively dead—threatening everything from marine life to countries’ coastlines to food supply chains. Humans, the IPCC said, were undeniably to blame. But tucked away in the throngs of reports and summaries and documents released by the IPCC is a more detailed explanation, one that includes the fact that fossil fuel combustion has driven 86% of carbon dioxide emissions over the past 10 years.

“The alarm bells are deafening, and the evidence is irrefutable,” UN Secretary-General António Guterres said in a statement related to the IPCC report. “Greenhouse gas emissions from fossil fuel burning and deforestation are choking our planet and putting billions of people at immediate risk.”

Oil and gas majors have long been the subjects of an immense and mounting campaign steered by investors, activists, and lawmakers looking toward a cleaner energy future. And while European oil giants like BP and Shell have said they aim to reach net-zero carbon emissions in the next three decades, others such as Exxon Mobil have dragged their feet, much to the dismay of their critics.

Now, with the IPCC report’s findings at their back, congressional Democrats are sure to ramp up their pressure against such companies—and soon. “It underscores the urgency of the moment,” Sen. Chris Van Hollen told Fortune, in reference to the report. “It’s blinking red lights, saying do something now, and I do think it gives more momentum to various proposals to confront climate change.”

Van Hollen, a Maryland Democrat, outlined legislation the week before the IPCC report designed to hold fossil fuel emitters responsible for the damage their businesses have done to the environment over the last two decades. Supported by fellow senators Ed Markey and Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont, Sheldon Whitehouse of Rhode Island, and Jeff Merkley of Oregon, the proposed bill would tax some of the world’s biggest polluters doing business in the U.S. in order to fund renewable energy research, new infrastructure projects to prepare for more extreme weather events, and the rebuilding efforts in communities that have already been hit by the effects of climate change.

Under the proposed language, the companies required to pay would be fossil fuel extractors and oil refiners with operations in the U.S. that had accounted for at least 0.05% of total carbon and methane gas emissions released between Jan. 1, 2000, and Dec. 31, 2019. A little more than two dozen of the world’s biggest energy companies would likely be on the hook to pay the taxes, Van Hollen said, with giants like Chevron, Exxon Mobil, BP, and Shell facing the possibility of having to pay up to $6 billion annually. Van Hollen expects the proposal could generate upwards of $500 billion in new revenues for the government over the course of a decade.

Chevron, Exxon Mobil, and BP did not respond to Fortune’s requests for comments. Shell declined to comment.

The American Petroleum Institute, which represents much of the oil industry, said in a statement that it supports a “market-based, economy-wide carbon price policy” to reduce emissions and accelerate the transition. However, the trade group pushed back in response to Van Hollen’s proposal, saying that “targeting a handpicked group of companies with punitive new taxes would undermine the guiding principle of neutrality embedded in our nation’s tax code and would only serve to undermine the nation’s economic recovery.”

If the legislation is passed—a big question in Congress, where Democrats hold slim majorities in both the House of Representatives and the Senate—Van Hollen does expect that it will face a court challenge from Big Oil. But the senator says those lawsuits are “bound to fail,” considering his legislation is modeled around the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, which created the Environmental Protection Agency’s Superfund program.

To determine who exactly would need to pay into Van Hollen’s proposed Polluters Pay Climate Fund, the bill says the Treasury Department and EPA would “use established techniques” based on public data to track the amount of carbon and methane a company has been responsible for in the past. The companies would be able to challenge the findings, as well. One group that has been working in that area is the Climate Accountability Institute, which focuses on anthropogenic climate change research and education.

A report from the nonprofit that was updated in December found that 35% of all fossil fuel and cement emissions from 1965 to 2018 can be traced back to the work of just 20 of the largest oil, natural gas, and coal producers in the world. Among them were state-owned entities like Saudi Aramco and Pemex, as well as the largest energy companies operating in the U.S.: Chevron, Exxon Mobil, BP, and Shell, whose businesses together were responsible for more than 10% of the 1.41 trillion metric tons of fossil fuel and cement emissions produced during those 53 years.

“Oil and gas companies have a moral obligation and perhaps a legal one to help transform the fossil fuel industry and the global energy industry,” Richard Heede, the Climate Accountability Institute’s cofounder and director, told Fortune. “They have a central role to play in transitioning the global economy away from fossil fuels.”

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