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Lawmakers Propose ‘Climate Super Slush Fund’ — Because Calling it a Carbon Tax Just Sounds Bad

Connecticut lawmakers are rolling out two new bills to create a so-called “Climate Change Superfund,” a scheme that lets the state go after businesses for financial damages over fossil fuel use, claiming they’ve “contributed significantly” to greenhouse gas emissions. 

Rather than calling it what it is — a carbon tax — this bill forces companies to pay into a state-controlled fund that will then be used to bankroll vague initiatives like “climate mitigation, resiliency, and adaptation projects.” 

This idea of a “green slush fund” isn’t new. Vermont rolled out a similar plan in 2024, with New York jumping on board soon after, suggesting it is a state level version of the Environmental Protection Agency’s (EPA) Superfund. In reality, it’s nothing like it. 

The EPA’s Superfund was designed to hold actual polluters accountable — like companies that dump toxic waste into groundwater or abandon hazardous sites, leaving behind real, measurable damage. The agency’s penalties are not simply randomly passed around; they’re tied to clear evidence that connects a company’s actions to specific environmental harm. In other words, it goes after those who actually caused the problem, not just whoever politicians decide to shake down next. 

Unlike the EPA’s Superfund, the Vermont Climate Change Superfund goes after entire industries for global climate change, not specific environmental damage. There is no need to prove that a company’s emissions directly caused a particular storm, flood, or heatwave. Instead, the state assigns blame based on a company’s emissions history and sends them the bill. It’s less about accountability and more about finding a convenient scapegoat to bankroll the latest climate agenda. 

As expected, the legal battle over Vermont’s law has officially started. The U.S. Chamber of Commerce and the American Petroleum Institute have taken the state to federal court, arguing the law tramples both the U.S. Constitution and the federal Clean Air Act. Their lawsuit lays out five major objections. 

The lawsuit argues that Vermont’s Climate Superfund law violates the Constitution’s Supremacy Clause, as greenhouse gas emissions are classified as pollutants under the federal Clean Air Act and fall under the EPA’s jurisdiction. 

It also argues that the law infringes on the Due Process Clause of the Fourteenth Amendment by enforcing retroactive penalties in a manner that is arbitrary and irrational; and that it conflicts with the Commerce Clause by specifically targeting energy producers based in other states. 

Furthermore, the lawsuit alleges that the law violates the Eighth Amendment’s Excessive Fines Clause by imposing penalties on domestic energy companies while disregarding global emissions from other sources. It also challenges the law under the Fifth Amendment’s Takings Clause, arguing that it unfairly places a significant and disproportionate financial burden on a select group of energy producers. 

If Connecticut moves forward with this bill, the lawsuits will come rolling in. Passing this bill is practically begging for the unleashing of a legal whirlwind. 

The bill’s broad language raises numerous questions. How will the state determine which companies are responsible? Will it target local manufacturers, utility providers, or even companies that transport goods through the state? What about businesses that have already invested heavily in reducing emissions — do they get a pass, or will they be penalized anyway?  

Beyond legal troubles, the economic consequences of creating this slush fund could be severe. Companies hit with these costs aren’t simply going to eat the expense; they’ll pass them on to consumers through higher prices. That means Connecticut residents will be forced to pay for this tax — whether they’re paying more at the pump, in their electric and heating bills, or at the grocery store.  

This isn’t about making corporations pay; it’s about shifting the financial burden onto Connecticut residents who are already suffering from some of the highest energy prices in the nation while politicians score points with their environmentalist supporters. 

There is also the question of where the money will go. A fund like this is a breeding ground for waste, mismanagement, and political favoritism. With loosely defined terms like “climate resiliency” and “mitigation,” lawmakers can funnel cash into pet projects with little accountability.  

Connecticut has a history of wasteful spending when it comes to climate initiatives. The most recent can be seen in the public benefits portion on Eversource and United Illuminating (UI) electric bills. Part of the public benefits charge goes toward funding electric vehicle (EV) charging stations in the state’s wealthiest towns. 

Other policies like subsidies for EVs and electric bikes also tend to benefit those in upper tax brackets, yet the state still insists on handing out rebates in the name of “green energy.”  

Then there is the issue of retroactive punishment. The state government encouraged and even subsidized many of the very industries it now wants to penalize. Trying to rewrite history by punishing companies for actions that were legal (and often supported by public policy) at the time sets a dangerous precedent. It tells businesses that no matter how much they comply with regulations today, they could still be financially targeted tomorrow. 

Back in 2012, then-Gov. Dannel Malloy rolled out an energy strategy that expanded access to natural gas aiming to improve energy efficiency and affordability. His plan sought to connect more residents and businesses to natural gas. 

To make it happen, Gov. Malloy provided incentives including financing options for residents and businesses to convert to natural gas and allowing potential gas customers near gas mains to have their connections financed by the states gas utilities. 

The plan, backed by labor unions, also included laying down hundreds of miles of new gas lines to expand Connecticut’s reliance on natural gas. The question is — will the unions and the state be forced to pay into the Climate Superfund since they were instrumental in pushing natural gas expansion? Or will they get a free pass sticking business with the bill? 

Ironically, this carbon tax is unlikely to achieve anything meaningful in the fight against climate change. Connecticut can’t regulate global emissions, nor can it dictate energy policy to the rest of the country. What it can do, however, is make the state less competitive, drive-up costs for consumers, and create a legal mess that benefits lawyers more than the environment. 

Connecticut already ranks near the bottom nationally in economic competitiveness, yet lawmakers seem determined to make it even worse. Instead of fostering a business-friendly environment and job growth, they are choosing to double down on costly, legally questionable climate schemes that will do little besides drive up costs and push more businesses and residents out of the state. 

Meghan Portfolio

Meghan worked in the private sector for two decades in various roles in management, sales, and project management. She was an intern on a presidential campaign and field organizer in a governor’s race. Meghan, a Connecticut native, joined Yankee Institute in 2019 as the Development Manager. After two years with Yankee, she has moved into the policy space as Yankee’s Manager of Research and Analysis. When she isn’t keeping up with local and current news, she enjoys running–having completed seven marathons–and reading her way through Modern Library’s 100 Best Novels.

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