The "Economic and Climate Resilience Act of 2026" establishes a carbon pricing mechanism in Rhode Island by imposing a fee on non-exempt fossil fuels, starting at $15 per metric ton of carbon dioxide equivalent (CO2e) and increasing annually by $5 until it reaches a maximum of $50 per ton, after which it will be adjusted for inflation. The revenue generated will be deposited into the newly created Economic and Climate Resilience Fund, which will be used to support climate resilience, renewable energy, energy efficiency, and climate adaptation programs, particularly benefiting low-income residents and small businesses.

The act specifies that 28% of the fund will support climate resilience and renewable energy initiatives, with at least one-third of that funding directed to neighborhoods and municipalities with the lowest median incomes. Additionally, 30% of the fund will provide direct dividends to employers, and 40% will provide direct dividends to residents, with specific provisions for low-income households and families with children. Up to 2% of the fund may be used for administrative costs.

The act also includes exemptions for government agencies focused on public transportation and allows for fee reductions based on federal carbon pricing. An independent oversight board will be established to manage the fund, consisting of representatives from various sectors, and will be responsible for preparing annual reports to recommend adjustments to the fee structure and dividend distribution.

The act will take effect on July 1, 2027, contingent upon the enactment of a carbon fee of at least $5.00 per metric ton by Rhode Island and at least two other states in the Regional Greenhouse Gas Initiative (RGGI).