October 4, 2022
UN’s Guterres says ‘polluters have to pay’, calls for tax on fossil fuels

Antonio Guterres photographed in New York last September. On Tuesday, he said fossil fuel firms and their “supporters” needed to be taken into account.

John Minchillo | pool | Getty Images News | Getty Images

The UN secretary-general said on Tuesday that developed economies should impose an additional tax on the profits of fossil fuel firms, with money given to countries hit by climate change and families grappling with cost-of-living crises.

In a sweeping address to the United Nations General Assembly in New York, Antonio Guterres described the fossil fuel industry as “a feast of hundreds of billions of dollars in subsidies and windfall profits, while households slash budgets and our planet burns.”

He said fossil fuel firms and their “supporters” should be taken into account. “This includes banks, private equity, asset managers and other financial institutions that continue to invest in and underwrite carbon pollution.”

It also included what he called a “massive public relations machine raking in billions to save the fossil fuel industry from scrutiny.”

Despite the comments, Guterres appeared to acknowledge the reality of the current situation, with coal, oil and gas playing an important role in the modern world in both developed and emerging economies.

“Of course, fossil fuels cannot be discontinued overnight,” he said. “A proper transition means leaving no individual or country behind. But it’s time to put fossil fuel producers, investors and supporters on notice.”

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

Guterres said these funds should be re-directed to “countries with loss and damage from the climate crisis and those grappling with rising food and energy prices”.

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Guterres’ speech on Tuesday reinforced the comments He returned in August, When he said it was “unethical for oil and gas companies to turn record profits from this energy crisis on the backs of the poorest people and communities, and at the enormous cost of the climate.”

“The combined profits of the largest energy companies are close to US$100 billion in the first quarter of this year,” he said. “I urge all governments to tax these exorbitant profits and use the money to support the most vulnerable in these difficult times.”

The notion of imposing an unpredictable or one-time tax on energy companies has gained traction in some quarters, with the sector reporting huge profits amid rising commodity prices, while many homes and businesses grapple with rising energy. do struggle. bills and a widespread livelihood crisis.

Back in May, for example, Rishi Sunak, the former UK finance minister, announced details of a “temporary, targeted energy benefit levy” on oil and gas firms.

Last week, European Commission President Ursula von der Leyen said: It was proposing “a cap on the revenue of companies producing electricity at low cost”. He argued that these businesses were “making revenues they never accounted for, they never even dreamed of.”

“And don’t get me wrong: in our social market economy, profits are fine, they’re good,” von der Leyen said. “But in these times, it is wrong to take extraordinary, record revenue and profit from war and on the backs of our consumers.”

“In these times, profits must be shared and delivered to those who need it most. And so, our proposal also covers fossil fuel power producers who have to contribute to the crisis.”

Overall, von der Leyen said the proposal would raise more than 140 billion euros, or about $140.1 billion.

While there is support for such actions and initiatives, there is also opposition. After Sunak announced its plans, for example, Offshore Energy UK stated that the levy would “discourage UK offshore energy investment, meaning a decline in oil and gas exploration and production, and therefore forcing an increase in imports”. does.”

The debate and discussion about the role of fossil fuels in the planet’s energy mix is ​​a lively one, and is set to continue for years to come.

Earlier this year, Standard Chartered CEO Bill Winters admitted that most people would subscribe to what he called a “just transition.”

“Those are two really important words…” And transition means transition – that means it takes some time, said Winters, speaking to CNBC’s Geoff Cutmore at the City Week forum in London.

“The idea that we can turn off the tap tomorrow and eliminate fossil fuels is frankly ridiculous and nave,” Winters said. “Well, firstly, it’s not going to happen and secondly, it’s going to be very disruptive.”

That would be good for climate change, winters gone stateside, but “bad for wars, revolutions and human life because you would have… He argued that the “final disinvestment option” needs to be taken off the table.

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