The following is a resource for grassroots activists and allies. For press inquiries, please contact Campaign Co-Lead Dan Zackin at [email protected].

Industry groups, including the Associated Industries of Massachusetts (AIM) and the Greater Boston Chamber of Commerce, have claimed that the climate superfund act will cause gasoline prices to rise [1, 2]. These claims follow a well-documented disinformation “playbook” that the fossil fuel industry and its proxies have used for decades to delay climate action and avoid accountability [3]. Notably, the American Petroleum Institute (API), a powerful fossil fuel lobbying group with a history of opposing climate policy, is a listed member of AIM [4, 5]. On balance, the industry groups’ claims regarding future cost passthrough are not supported by the available economic evidence and do not consider the clear economic, environmental, human health, and equity benefits that a climate superfund would bring to our communities [6, 7]. Let’s examine industry’s argument, then check it against what the evidence shows about the costs and benefits of a Massachusetts climate superfund.

Costs

Big Oil’s argument: A climate superfund would cause gasoline prices at the pump to rise, because companies could just pass on their higher costs on to consumers.

What the evidence finds: If passed, a climate superfund act is highly unlikely to alter the price of gasoline at the pump. Eminent economists and other policy experts—including PhD Institute for Policy Integrity economists Peter Howard and Minhong Xu, Massachusetts emeritus economist James K. Boyce, and Nobel Prize-winning economist Joseph E. Stiglitz—have analyzed this question and arrived at similar conclusions [8, 9, 10]. We can understand why by examining the three key costs widely accepted to determine gas prices at the pump: crude oil costs (~51%), refining, distribution, and marketing costs (~34%), and gasoline tax costs (~16%). These numbers come directly from the oil and gas industry themselves [11]. Let’s take a closer look in each of these three areas to see whether or not they could be affected by a state-level climate superfund (TL;DR: the evidence indicates minimal to no impact).

(1) Crude Oil Costs

The first key factor affecting gasoline prices is the cost of crude oil, which accounts for ~51% of the price at the pump. When it comes to crude oil, oil and gas majors are price takers—in other words, no single company or state can unilaterally influence this global price. What does this mean? It means that global-level crude oil prices, the main thing affecting gas prices, are insulated from state-level changes in the Massachusetts legislature like a climate superfund. Take it from the American Petroleum Institute themselves, who asserts that “gasoline prices have historically reflected those of oil” (see figure below) [12]!

(2) Refining, Distribution, and Marketing Costs

The second key factor affecting gasoline prices is the cost of refining, distribution, and marketing, which accounts for ~34% of the price at the pump. This area is also unlikely to see any meaningful price changes, for two reasons:

First, assuming that prices can and will be simply “passed along” misunderstands how commodity pricing fundamentally works. The baseline price of oil results from global forces of supply and demand, which is outside any individual company’s control. In the short run (i.e., the time span during which the market structure is relatively fixed and during which there are no new major market entries or exits), fossil fuel companies operating in competitive markets set prices based on their marginal costs—things like labor, raw material, and utilities which depend on quantity produced. A fixed, one-time, sunk cost from a climate superfund does not affect these marginal costs. An astute reader might point out that markets aren’t always perfectly competitive and that market actors don’t always exactly follow this logic. However, oil and gas companies operate within highly complex and interconnected global-level markets which make it logistically difficult and more importantly, strategically unwise to try passing on a state-level fixed cost. This is especially true when that fixed cost only affects some companies and when it affects each of them differently, like it would under a climate superfund! Logistical difficulties aside, this means that any fossil fuel company attempting to pass along prices would be making a strategic mistake: they would be putting themselves at an immediate price disadvantage relative to their cost-advantaged competitors (i.e., other responsible parties which were responsible for a smaller share of emissions during the covered period and are thus on the hook for proportionally less cost liability) [13]. In simpler terms, the superfund works by first determining climate change costs to our state over a set time period, then by splitting up those costs proportional to each big polluter’s emissions (they are called “responsible parties”) during that time span (the “covered period”). Because the responsible parties all have vastly different emissions, some would be liable for more cost and others would be liable for less cost. If all the responsible parties raised their prices by exactly how much they were on the hook for, then the ones who polluted less than the rest would have price advantages over their competitors.

Second, even if we ignore all the theoretical and practical reasons explained above, it would still be incredibly difficult to pass on prices because big oil and gas companies do not own or operate most gas stations. To be exact, a 2024 industry report found that unbranded gas stations in the U.S. Northeast region accounted for ~57% of retail visit count market share, and the American Petroleum Institute themselves asserts that ~95% of U.S. service stations are independently owned and operated [14, 15]. This is crucial to understand because it means that if any fossil fuel company was somehow both able and willing to raise prices, then they would quickly lose market share. That’s because local unbranded and independent stations—especially those without exclusive branding agreements—are highly price-sensitive and seek the lowest wholesale costs available to remain competitive. Gas at the pump is actually often a loss leader (meaning it is sold at a very low price, sometimes even at or below purchase cost, to attract customers into the store) for gas station owners and operators, who make most of their money on in-store sales and as such compete fiercely on gas prices to attract local customers [16]. The result is that any fossil fuel wholesaler who tries to pass on higher costs will simply lose revenues, either as their gas station customers switch suppliers, or as those stations sell less gas when they are undercut by local competitors buying from different suppliers.

(3) Gasoline Tax Costs

The third key factor affecting gasoline prices is the cost of state and federal tax, which accounts for ~16% of the price at the pump. This point is simple: the climate superfund act is fundamentally not a tax and represents a fixed, one-time, sunk cost based on past actions—unlike a tax, which affects the marginal cost of future decisions. Another important difference is that taxes affect all market participants equally, whereas the climate superfund act affects only some market participants to different degrees. A climate superfund is designed differently from a tax and works differently from a tax; therefore, gasoline tax costs would be untouched by a climate superfund.

Benefits

By contrast, the environmental, economic, human health, and equity benefits are backed by compelling evidence and by youth, environmental justice, labor, and public health leaders around the state. The benefits are clear—provisions and funding for coastal protection, climate-resilient public transit, urban tree canopy, disaster recovery, public health, environmental justice communities, fair labor practices, and more. A climate superfund would give Massachusetts a legal and financial way to cover the inevitable costs of climate adaptation and recovery. That’s necessary because right now, Massachusetts residents, small businesses, and municipalities are paying 100% of the costs of climate destruction. Instead of keeping us on the hook, a climate superfund would shift liability to where it rightfully belongs instead of having us suffer the costs. On top of this, Massachusetts economists estimate that the climate superfund would bring ~$25 billion into the Massachusetts economy and sustain ~7,600 good-paying jobs per year—roughly 45% more jobs than if that same money were spent within the state’s largest fossil fuel-based industrial sector [17].

At the end of the day, it’s clear—we need a climate superfund in Massachusetts.

References

[1] Greater Boston Chamber of Commerce. (2025). Chamber Signs to Oppose Climate Superfund Legislation. [If this page is taken down, then try the archived version here].

[2] WWLP. (2025). Fossil fuel giants face penalties in proposed climate bill.

[3] Mayor and City Council of Annapolis v. BP P.L.C. (pp. 36–40), Case No. C-02-CV-21-000525 (Cir. Ct. Anne Arundel County, June 25, 2024).

[4] InfluenceMaps. (2021). Big Oil’s Big History of Blocking Climate Action.

[5] Associated Industries of Massachusetts. (2025). Members Archive (p. 4). [If this page is taken down, then try the archived version here].

[6] Claims that the Massachusetts climate superfund would raise gas prices and “devastate” the state’s economy originate from the Associated Industries of Massachusetts’s 9/2/25 testimony in opposition to the climate change superfund. AIM’s testimony was then reposted as a letter to the Greater Boston Chamber of Commerce’s website on 9/25/25 (i.e., it does not appear to follow from any new analysis; rather, it appears to have been pretty much cut and pasted directly). AIM relies on two references to back their claims about economic devastation: a blog post from the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) and a report from the California Business Roundtable (which is not even about superfund legislation; the word “superfund” is mentioned once in the 31-page report). The first source, ILR, has been found to consistently side with big business over consumers and small businesses (see past examples here and here). Track record aside, ILR’s “methodology” fails a basic robustness check (the finding is no more than an artifact of the assumption). ILR assumes that all responsible parties will be able and willing to directly and immediately pass 100% of costs to consumers. In their own words: “we divided the cost input [$25 billion] among major sectors . . . we then further divided the resulting figure by the number of Massachusetts households.” As has been discussed at length in this article, this assumption is not supported by real-world economic evidence or by economic theory. ILR also ignores that doing nothing costs Massachusetts residents money today, and that these costs are only escalating. A climate change superfund not only shifts some of these financial costs to the polluters most responsible for causing them, but also reduces financial and non-financial costs currently shouldered by residents, because it funds adaptation and resilience projects our communities desperately need. ILR also ignores benefits entirely; for example, the climate change superfund is estimated to sustain ~7,600 good-paying jobs per year, ~45% more than if the same investments were made in natural gas, which represents the state’s largest fossil fuel-based industrial sector. The reference from the second source is just simply not about superfunds, nor about our state at all—see for yourself here! The report concerns entirely separate legislation in California (even if the content was related, the report’s methodology is also questionable—it employs IMPLAN modeling, the economic robustness and applicability of which has been critiqued by many due to its heavy reliance on unrealistic underlying assumptions and use of economic multipliers to produce inflated and myopic estimates of economic impact).

[7] Better Future Project. (2025). Climate Change Superfund Fact Sheet and FAQ’s.

[8] Howard, P. H. & Xu, M. (2022). Enacting the “Polluter Pays” Principle. Institute for Policy Integrity.

[9] Boyce, J. K. (2025). Expert Analysis: Massachusetts Emeritus Economist James K. Boyce Signs to Support Climate Superfund Legislation. Make Polluters Pay Massachusetts. [Published web version of a letter sent from economist James Boyce to the Massachusetts Joint Committee on Environment and Natural Resources concerning superfund legislation].

[10] Stiglitz, J. E. (2024). Nobel Prize Winning Economist to NY Gov: Superfund Act Will Save New Yorkers Money. Make Polluters Pay. [Published web version of a letter sent from economist Joseph Stiglitz to NY Governor Kathy Hochul concerning superfund legislation].

[11] American Fuel & Petrochemical Manufacturers. (2024). What goes into the price of gasoline?. [If this page is taken down, then try the archived version here].

[12] American Petroleum Institute. (2025). Digging into Crude Oil, Gasoline and Natural Gas Prices 3.0. [API has recently taken down this page, but you can access a PDF here].

[13] Eisner, E. (2024). Fact Sheet: Climate Change Superfund Act. Fiscal Policy Institute.

[14] OPIS (2024). Unbranded vs Branded Gasoline. [If this page is taken down, then try the archived version here].

[15] American Petroleum Institute. (2025). Service Station FAQs. [API has recently taken down this page, but you can access the same information archived here].

[16] Taylor, R. B. & Muehlegger, E. (2025). The Effects of Competition in the Retail Gasoline Industry. NBER Working Paper No. 33569. JEL No. L1, Q41.

[17] Pollin, R. & Chakraborty, S. (2025). Estimating the Job Creation Potential Through the Massachusetts Climate Adaptation Superfund Proposal. University of Massachusetts Amherst Political Economy Research Institute.

About the Author

Olivier grew up in Harvard, Massachusetts, and graduated summa cum laude with a B.A. in Economics, a minor in environmental science, and a Civic Engagement & Public Service certificate from the University of Massachusetts Amherst. At graduation, Olivier was selected to represent the economics major as the class’s senior speaker, sharing reflections on navigating that social and political moment. During college, Olivier was an active participant in the Community Scholars Program, a multi-year academic community engagement and leadership program centered around intentional service, learning, discussion, and visioning; Olivier also served the Amherst economics community as Co-President of the UMass Undergraduate Economics Club. At Better Future Project, Olivier supports the Make Polluters Pay campaign through campaign communications, economic research, and policy analysis. Outside work at BFP, Olivier loves to read, study and play chess, and explore nature.