Taxing oil giants will boost UN climate loss fund twentyfold: study

Levying a “small tax on just seven of the world’s biggest oil and gas firms” will expand the UN climate loss and damage fund twentyfold, a study said.

A ‘climate damages tax’ would put a cost on every ton of carbon emitted by the coal, oil and gas extracted – starting at $5 per ton and rising each year thereafter.

If this “was imposed on ExxonMobil, Shell, Chevron, TotalEnergies, BP, Equinor and ENI, it could raise $15 billion in the first year alone to help the world’s most climate-vulnerable countries pay for the escalating cost of damage caused by climate change,” the analysis published by Greenpeace International and Stamp Out Poverty said.

Currently, just $702 million has been pledged to UN Fund for Responding to Loss and Damage, while the combined profits of those fossil fuel companies exceeds $148 billion, the analysis added.

The long-term global tax on fossil fuel extraction, with year-on-year hikes, combined with taxes on excess profits and other levies could grow the fund by more than 2,000% and help address the costs of extreme weather events, it said.

Earlier this month, Barbados Prime Minister Mia Mottley, French President Emmanuel Macron and Kenyan President William Ruto gave their backing for the climate damages tax.

A climate damages tax imposed only on wealthy countries can play a key role in helping the poorest and most vulnerable to rebuild after climate-related disasters, the study said, adding that such a tax could raise an estimated $900 billion by 2030.

“While oil and gas giants keep raking in grotesque levels of profit from exploiting resources, the damages resulting from the industry’s operations are disproportionately borne by people who did not cause the crisis,” said David Hillman, director of Stamp Out Poverty.

“A climate damages tax – along with other levies on fossil fuels and high-emitting sectors – will make polluters pay for the cost of climate impacts, as well as supporting workers and affected communities in the transition to clean energy, jobs, and transport,” Hillman said.

“Who should pay? This is fundamentally an issue of climate justice and it is time to shift the financial burden for the climate crisis from its victims to the polluters behind it,” said Abdoulaye Diallo, co-head of Greenpeace International’s Stop Drilling Start Paying campaign.

“Our analysis lays bare the scale of the challenge posed by climate loss and damage and the urgent need for innovative solutions to raise the funds to meet it. We reject Big Oil’s assault on people and democracy and call on governments worldwide to adopt the climate damages tax and other mechanisms to extract revenue from the oil and gas industry,” Diallo said.