A proposed tax targeting fossil fuel firms based in the world’s richest countries could raise hundreds of billions of dollars to help vulnerable countries fight the climate crisis.
The Climate Damages Tax report, which reveals the statistic, has been backed by Greenpeace, Christian Aid and climate organisations around the world. It proposes that OECD countries should be at the forefront of introducing a tax on the extraction of fossil fuels.
The authors say the tax could boost a Loss and Damage Fund to help vulnerable countries cope with the worst effects of climate breakdown that was agreed at the Cop28 summit in Dubai.
In comments reported by the Guardian, David Hillman, the director of the Stamp Out Poverty campaign and co-author of the report, said it “demonstrates that the richest, most economically powerful countries, with the greatest historical responsibility for climate change, need look no further than their fossil fuel industries to collect tens of billions a year in extra income by taxing them far more rigorously”.
He added: “This is surely the fairest way to boost revenues for the loss and damage fund to ensure that it is sufficiently financed as to be fit for purpose.”
Subscribe to Sustainability Beat for free
Sign up here to get the latest sustainability news sent straight to your inbox everyday
The authors say the levy could be introduced into existing tax regimes.
If the tax was introduced in OECD countries in 2024 at an initial rate of £4 ($5) a tonne of CO2, increasing by a the same amount each year, the tax would raise a total of £720 billion ($900 billion) by 2030, the report says.
Within that, £575 billion ($720 billion) would be earmarked for the loss and damage fund with the remaining $180bn going to a “domestic dividend” to help communities within richer nations with a just climate transition.
Earlier this year, the Bank of England was accused of subsidising fossil fuels via its lending practices by campaigning group Positive Money.
