Photo Credit: United Nations
The secretary general of the United Nations strongly recommends member nations take a firmer stance in the fight against the utilization of fossil fuels. Secretary general Antonio Guterres said that countries should be imposing extra taxes on these companies, so nations would gain more funding to help the mitigation of climate change’s effects.
Guterres added that countries would allocate money from the tax to assist families as the economy slumps down and the prices of commodities skyrocket, reaching record highs.
In the U.N. General Assembly, the senior official explained that the fossil fuel industry is “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”
Guterres enumerated several stakeholders that are keeping the fossil fuel industry up and running. He posits that all of them need to be held liable for the damage that the industry has afflicted the globe. “That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution,” he said.
The secretary-general also pointed out the role of public relations companies that do their part in ensuring that the industry bodes well with the public, shielding them from the possible backlash against the masses through advertisements, propaganda, and other information-dissemination machinery that redirect the attention of the mass from the real problem.
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The products are still needed
While Guterres is ruling out the use of fossil fuels and other related products, he admitted that the countries still need them at large. Oil, coal, and gas are being widely used by many companies in their operations. However, he believes that countries should now be making plans for their transition to protect the environment.
“Of course, fossil fuels cannot be shut down overnight. 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.”
Where should the tax go
If the proposal is enforced by countries, it is now important to know where the tax revenue goes. According to Guterres, the money should be given to “countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices.”
The secretary already delivered a similar speech back in August where he described the record profit of companies during the energy crisis as ‘immoral.’ He stated that it is highly unfair for the companies to earn the highest at a time when many are struggling, and communities are being affected by the climate crisis.
“The combined profits of the largest energy companies in the first quarter of this year are close to 100 billion U.S. dollars. I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times.”
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Higher taxes for fuel companies
The recommendation made by Guterres has already resonated with other leaders, including Rishi Sunak from the U.K. and European Commission’s President Ursula von der Leyen.
“And don’t get me wrong: In our social market economy, profits are OK, they are good. But in these times, it is wrong to receive extraordinary, record revenues and profits benefitting from war and on the back of our consumers,” von der Leyen said.
“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.”
However, CEO of Standard Chartered means that if countries are looking to ending fossil fuel use, creating a space for ‘just transition’ for companies is important.
“Those are two really important words … just means fair, it also means implementable. And transition means transition — it means it takes some time,” said Winters.
“The idea that we can turn off the taps and end fossil fuels tomorrow, it’s obviously ridiculous and naive.”