UN Secretary-General Calls For A Higher Tax On Fossil Fuel Profits And Declares That “Polluters Must Pay”

According to the U.N. secretary general, developed nations should impose an additional tax on the profits of fossil fuel companies, with the money going toward helping households dealing with the cost of living crisis and nations affected by climate change.

The fossil fuel industry, according to Antonio Guterres, is “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets contract and our planet burns,” in a speech to the U.N. General Assembly in New York.

He continued by saying that fossil fuel companies and their “enablers” needed to be held accountable. This includes the banks, private equity firms, asset managers, and other financial organizations that still finance and invest in carbon pollution.

The “massive public relations machine raking in billions to shield the fossil fuel industry from scrutiny” was another component, according to him.

The hydrogen economy of clean energy was a pipe dream. It might become a reality this decade thanks to the climate bill.

Despite his comments, Guterres seemed to acknowledge that coal, oil, and gas still play a significant role in the modern world, in both developed and emerging economies.

“Of course, fossil fuels cannot be shut down overnight,” he said. “A just transition means leaving no person or country behind. But it’s high time to put fossil fuel producers, investors and enablers on notice.”

“Polluters must pay. And today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies.”

The money should instead go to “countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices,” according to Guterres.

The remarks Guterres made in August that it was “immoral for oil and gas companies to be making record profits from this energy crisis on the back of the poorest people and communities and at a massive cost to the climate” were reaffirmed in his speech on Tuesday.

“The combined profits of the largest energy companies in the first quarter of this year are close to 100 billion U.S. dollars,” he added. “I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times.”

Over the past few months, the idea of imposing a windfall, or one-time, tax on energy companies has gained traction in some circles. This is because the industry has been recording enormous profits despite a rise in commodity prices, while many homes and businesses are experiencing rising energy costs and a wider cost-of-living crisis.

For instance, Rishi Sunak, the former finance minister of the United Kingdom, revealed details of what he called a “temporary, targeted energy profits levy” on oil and gas companies back in May.

Ursula von der Leyen, president of the European Commission, stated last week that the organization was proposing “a cap on the revenues of companies that produce electricity at low costs.” These companies were “making revenues they never accounted for, they never even dreamed of,” she claimed.

“And don’t get me wrong: In our social market economy, profits are OK, they are good,” von der Leyen added. “But in these times, it is wrong to receive extraordinary, record revenues and profits benefitting from war and on the back of our consumers.”

“In these times, profits must be shared and channeled to those who need it most. And therefore, our proposal also includes the fossil fuel electricity producers, who have to give a crisis contribution.”

Von der Leyen predicted that the proposal would raise more than 140 billion euros, or roughly $140.1 billion.

There are supporters of these initiatives, but there is also opposition. For instance, Offshore Energies UK claimed the tax would “discourage UK offshore energy investments, resulting in declines in oil and gas exploration and production, and thereby force an increase in imports” after Sunak revealed his plans.

The hydrogen economy of clean energy was a pipe dream. It might become a reality this decade thanks to the climate bill.

Fossil fuels continue to be a topic of discussion and debate, and this trend is likely to continue in the years to come.

CEO Bill Winters acknowledged that the majority of people would support a “just transition.”

“Those are two really important words … just means fair, it also means implementable,” Winters, who was speaking to CNBC’s Geoff Cutmore at the City Week forum in London, said. “And transition means transition — it means it takes some time.”

“The idea that we can turn off the taps and end fossil fuels tomorrow, it’s obviously ridiculous and naive,” Winters said. “Well, first of all, it’s not going to happen and secondly, it would be very disruptive.”

Winters continued, “It would be good for climate change, but bad for wars, revolutions, and human life because you’d have… havoc.” He maintained that the “ultimate divestment option” needed to be eliminated.

(Adapted from BBC.com)



Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Sustainability

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