The loss & damage fund is in focus once again.
According to a new analysis released by Stamp Out Poverty and Greenpeace International, a small tax on just seven of the largest oil and gas companies in the world could increase the UN Fund for Responding to Loss & Damage by more than 2000%. This can assist in addressing the costs of extreme weather events.
Together with taxes on excess profits and other levies, the organizations are advocating for a long-term, worldwide tax on the extraction of fossil fuels that would increase annually, the organizations noted.
The organizations suggested that every tonne of carbon released by the extraction of coal, oil, and gas would be subject to a “Climate Damages Tax,” which would start at $5 per tonne and increase annually.
If it 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.
Currently, just $702 million has been pledged to the loss and damage fund, while the combined profits of those fossil fuel companies exceed $148 billion.
During a press conference, the organizations said that the $64 billion in costs associated with some of the worst weather events this year that have been linked to climate change.
These include Typhoon Carina/Gaemi, Hurricane Helene, Hurricane Beryl, the May heatwave in India, the May floods in Brazil, and the April floods in Kenya and Tanzania. Just a small portion of the total cost of loss & damage worldwide over the past year is represented by the damage costs from the disasters surveyed, which range from $2.9 billion (from Typhoon Carina) to $25 billion (from the heatwaves in India).
Helping the poorest and most vulnerable recover from climate-related disasters could be greatly aided by a Climate Damages Tax that is only levied on wealthy OECD nations. By 2030, the tax, which would increase yearly by $5 per tonne of CO2-equivalent depending on the amounts of gas and oil extracted, could generate an estimated $900 billion to help communities and governments worldwide deal with the increasing effects of climate change.
“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.”
“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.”
