A climate damages tax imposed across wealthy OECD countries, increasing annually by US$5 per tonne of CO2-equivalent based on the volumes of oil and gas extracted, could play an essential role in financing climate action.
By Abdoulaye Diallo
At the UN climate change conference in Baku (COP29), government officials are scrambling for an agreement on a new climate financial package. There is a well established consensus that the climate crisis is exacerbating the hardships of vulnerable communities around the world. The question now is who’s going to pay for the staggering costs?
A small tax on just seven of the world’s biggest oil and gas companies could grow the UN Fund for Responding to Loss and Damage by more than 2000 per cent, as shown in an analysis by environmental organisations Greenpeace International and Stamp Out Poverty. Taxing last year’s revenues of major oil companies could help cover the costs of some of this year’s worst weather events attributed to climate change.
Taxing ExxonMobil’s 2023 extraction could pay for half the cost of Hurricane Beryl, which ravaged large parts of the Caribbean, Mexico and the USA. Taxing Shell’s 2023 extraction could cover much of Typhoon Carina’s damages, one of the worst that the Philippines experienced this year. Taxing TotalEnergies’ 2023 extraction could cover over 30 times Kenya’s 2024 floods.
Climate Damages Tax
A Climate Damages Tax (CDT) could deliver desperately needed resources for communities and authorities who are on the front lines of the climate crisis, made worse by dirty energy companies. Companies which, together, earned almost US$150 billion last year.
So, what could a long term tax on fossil fuel extraction, combined with taxes on excess profits and other levies, deliver? A climate damages tax imposed across wealthy OECD countries, increasing annually by US$5 per tonne of CO2-equivalent based on the volumes of oil and gas extracted, could play an essential role in financing climate action.
It could raise an estimated US$900 billion by 2030 to support governments and communities around the world as they face growing climate impacts.
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 those responsible for it. There is an urgent need for innovative solutions to raise the funds to meet the challenge posed by climate loss and damage. Governments worldwide must adopt the climate damages tax and other mechanisms to extract revenue from the oil and gas industry.
The data clearly shows Big Oil’s complicity in the crisis we’re in, but to truly deliver climate justice the numbers are never enough.
That’s why our call to make climate polluters pay comes at the conclusion of three weeks of protests, in which survivors of floods and other extreme weather events have stood with Greenpeace activists. Together, activists delivered to offices of dirty energy companies (e.g, TotalEnergies, Eni, Equinor, OMV) containers full of broken toys and family photos, furniture, appliances, and other remnants of personal and communal tragedy, which became far worse because of Big Oil’s ever growing production of oil and gas.
For governments to finally force climate polluters to stop drilling and start paying, we should all raise our voice.
Abdoulaye Diallo is Co-Head of Greenpeace International’s Stop Drilling Start Paying project
This piece has been sourced from Inter Press Service.
