The Climate Adaptation Trust

The Trust is funded through two streams beginning Year 4:

1. All Methane Accountability and Reduction Levy revenue — routed per the Chapter 10 specification.
2. All carbon revenue above the $160/ton household-dividend rebate ceiling — every dollar of carbon revenue that exceeds what is rebated to households flows here, by statute.

The Trust has no fixed dollar target. Its target is whatever the projected mitigation cost turns out to be — and that figure depends on how much carbon use actually tapers, how fast behavior changes, and how rapidly the physical damage materializes. The goal is that the fund equals the damage-mitigation cost, period. The Expert Panel on Climate Resilience (EPCR) reprices that cost on a published cadence as the science updates and as the adaptation work proceeds.

What the fund pays for is the physical work: forest protection at watershed scale, coastal defense and sea walls, undergrounding the grid against extreme weather, water and drought resilience, wildfire hardening, and — over the longer horizon — the high-speed rail network the country will need anyway as short-haul aviation prices in its full carbon cost.

No General Fund supplement. The Trust is funded by the carbon-and-methane revenue stream alone. That discipline is the point: the high-carbon-price window is a one-time chance to capitalize an adaptation reserve from the carbon revenue itself, before declining carbon use tapers the source. Backstopping with appropriated dollars would convert the Trust into ordinary spending and dissolve the architectural commitment.

Sufficiency is measured against the EPCR-published mitigation cost, not against a frozen number. The right metric is cumulative inflows to date divided by the current projected mitigation cost — capturing both reserve and disbursements EPCR has already deployed. A project completed in Year 12 (a sea wall built; pavement undergrounded; a watershed protected) is the obligation discharged, not the obligation evaded.

Headline metric: CAT Sufficiency Ratio = Cumulative inflows ÷ EPCR-projected mitigation cost. Reaches 100% when the adaptation obligation is fully funded against the best-available projection — both reserve held and work already completed.

The Trust is statutorily ring-fenced. It is:

• Funded exclusively from the two streams named above
• Held in special-issue Treasury securities
• Disbursed only by the Expert Panel on Climate Resilience (EPCR) for qualifying adaptation expenditures
• Excluded from deployable surplus calculations, debt-retirement calculations, and any appropriation against unrelated purposes

Congress cannot reallocate the Trust to General Fund expenditures without affirmative statutory action overriding the ring-fence — the same architectural logic that protects the Social Security Trust Fund under current law, applied to climate because the adaptation obligation extends 50–70 years beyond the revenue source.

Gross flow is the inflow from the two sources above. Net flow is gross less project disbursements. During the first ten years, the Trust functions largely as a cash reserve — manpower capacity (engineers, construction workforce, project-management bandwidth) is the binding constraint, not capital. Trust assets are held in special-issue Treasury securities; interest savings accrue to the General Fund during the accumulation phase. Most adaptation investments are deferred 10–50 years from enactment, aligned with physical climate-risk timelines and workforce availability.

The Expert Panel on Climate Resilience — FEMA, Army Corps, and EPA in co-governance — prioritizes disbursement across:

The Trust funds infrastructure mitigation. Coastal defense for dense urban nodes and strategic economic infrastructure. Grid hardening. Water and drought resilience. Wildfire hardening. Watershed protection. Public-health surge capacity. Ecosystem-migration corridors. The category list is in the schedule above; the common thread is built infrastructure that absorbs physical climate damage at scale.

Managed retreat runs on a separate rail. Retreat from high-risk coastal areas is produced through NFIP reform — actuarial pricing, FEMA no-rebuild zone designation, and withdrawal of federal disaster assistance for non-compliant structures — administered through the existing flood-insurance and disaster-relief channels. Individual residential coastal protection sits in private insurance and homeowner responsibility, with the Trust's coastal work reserved for dense urban nodes and strategic economic infrastructure.

EPCR allocates within era-defined annual draws. Annual envelopes ramp with hazard onset and step down through preservation discipline as buildouts mature. By Year 200 the Trust preserves $5T+ in principal for post-2229 contingency that no one alive in 2030 can forecast.

Total 200-year deployed (central case): $22.0T in real 2030 dollars. The Trust never appropriates from the General Fund; the General Fund never appropriates from the Trust. The two ledgers cover the full infrastructure obligation in their assigned domains.

The Accord deliberately limits ring-fenced trusts to two — the Climate Adaptation Trust and the Financial Stability Reserve — because multi-decade commitments require insulation from annual appropriation politics in those two cases. A carbon fee that funds Climate Adaptation one year and tax cuts the next would fail both purposes. For every other priced externality (water, health, agricultural, road-use, and the rest), revenue flows to the General Fund alongside every other federal receipt. The architecture deliberately avoids trivial earmarks.