Taxing Major Oil Companies Could Enrich UN Climate Fund by Over 2000%

A new analysis indicates that taxing seven major oil and gas companies could increase the UN’s climate loss and damage fund by over 2000%. This tax, proposed by Greenpeace International and Stamp Out Poverty, aims to address costs stemming from extreme weather events exacerbated by climate change. Successful implementation could result in substantial funds to support climate adaptation and resilience efforts worldwide.

A recent analysis by Greenpeace International and Stamp Out Poverty reveals that implementing a minor tax on seven of the world’s largest oil and gas corporations could increase the UN’s Fund for Responding to Loss and Damage by over 2000%. This initiative is aimed at financing the response to the financial consequences of severe weather events exacerbated by climate change. The organizations advocate for a long-term tax on fossil fuel extraction, with gradual annual increases alongside taxes on excess profits and other contributions. Notably, taxing ExxonMobil’s extraction activities in 2023 could provide funding for approximately half of the expenses associated with Hurricane Beryl, while taxing Shell’s extraction could address many of Typhoon Carina’s financial damages. Additionally, a tax on TotalEnergies could cover more than thirty times the costs projected for the floods in Kenya next year. David Hillman, Director of Stamp Out Poverty stated, “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.” The report underscores the financial impact of recent extreme weather events attributed to climate change, which have collectively incurred costs of approximately $64.6 billion. This total reflects a spectrum of disasters, from Typhoon Carina to the heatwaves in India. The suggested Climate Damages Tax (CDT), starting at $5 per tonne of CO₂ emissions, has the potential to generate substantial revenue, aiding in climate action efforts. It is estimated that by the end of the decade, with annual increments, the CDT could bring in nearly $900 billion, significantly supporting nations in managing the unrelenting impacts of climate change, especially for the most vulnerable communities. “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,” declared Abdoulaye Diallo, Co-Head of Greenpeace International’s Stop Drilling Start Paying campaign. He emphasized the urgent necessity for innovative solutions to fund climate action. In light of the conclusions drawn from this analysis, the organizations are urging global governments to adopt the Climate Damages Tax. Their call aligns with recent protests organized in various countries, aimed at highlighting the devastating consequences faced by communities due to climate change, as representatives delivered symbolic reminders of loss and tragedy to key oil and gas companies. Such measures could not only enhance funding for climate resilience but also uphold the principles of climate justice, ensuring that those contributing most to the crisis are held accountable for the damages they cause.

The call for a Climate Damages Tax emerges from the recognition that the fossil fuel industry plays a critical role in the ongoing climate crisis. Extreme weather events linked to climate change have revealed significant financial burdens on affected regions, particularly in developing nations. The Loss and Damage Fund, established during COP27, aims to provide support to vulnerable communities facing these impacts. However, current funding levels fall short of the estimated costs associated with climate-related damages. The analysis discusses how taxing major oil companies could reform the financing landscape necessary for climate adaptation and mitigation.

The analysis conducted by Greenpeace International and Stamp Out Poverty highlights the potential for a Climate Damages Tax to significantly bolster funding for climate-related damages. By implementing a modest tax on major oil and gas firms, governments could address the financial strains imposed by extreme weather events linked to climate change. This approach advocates for accountability, urging polluters to contribute to the costs incurred by their operations while promoting climate justice and funding for vulnerable communities.

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