UN’s Guterres says ‘polluters must pay’, calls for taxes on fossil fuels

Antonio Guterres was photographed in New York last September. On Tuesday, he said fossil fuel companies and their “enablers” must be held accountable.

John Minchillo | pool | Getty Images News | Getty Images

The United Nations Secretary-General said on Tuesday that advanced economies should levy an additional tax on the profits of fossil fuel companies, while funneling the money to countries affected by climate change and households struggling with the cost of living crisis.

In a wide-ranging address to the United Nations General Assembly in New York, António Guterres described the fossil fuel industry as “enjoying hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns.”

He went on to say that fossil fuel companies and their “enablers” need to be held accountable. This includes banks, private equity, asset managers and other financial institutions that continue to invest and ensure carbon pollution.

It also included what he called “a massive public relations machine that earns billions to protect the fossil fuel industry from scrutiny”.

Despite the statements, Guterres seemed to acknowledge the reality of the current situation, where coal, oil and gas continue to play a critical role in the modern world, in both advanced and emerging economies.

“Of course, fossil fuels cannot be shut down overnight,” he said. “A fair transition means no person or country is left behind. But it is time to notify fossil fuel producers, investors and enablers.”

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

Guterres said that money should be redirected to “countries experiencing loss and damage from the climate crisis; and to people suffering from rising food and energy prices.”

Read more about energy from CNBC Pro

Guterres’ speech on Tuesday boosted comments returned in August, When he said it was “unethical for oil and gas companies to make record profits from this energy crisis at the expense of the poorest people and societies and at an enormous cost to the climate”.

He added that “the combined profits of the largest energy companies in the first quarter of this year approached $100 billion.” “I urge all governments to tax these excessive profits and use the money to support the most vulnerable during these difficult times.”

The idea of ​​an unexpected tax, or one-time tax, on energy companies has gained traction in some quarters over the past few months, with the sector posting huge profits amid soaring commodity prices, while many homes and businesses struggle with rising energy bills and a cost-of-living crisis. the broadest.

Back in May, for example, the former British Finance Minister, Rishi Sunak, announced the details of what he called Temporary and targeted energy dividend tax on oil and gas companies.

last week, European Commission President Ursula von der Leyen said: She was proposing “to cap the revenues of companies that produce electricity at low costs.” These companies, she said, “are making revenue they never counted, they never dreamed of.”

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

“In these times, profits should be shared and directed to those who need it most. Thus, our proposal also includes fossil fuel electricity producers, who have to make a contribution in crises.”

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

While such actions and initiatives have supporters, there is also opposition. After Sunak announced its plans, for example, Offshore Energies UK said the tax would “discourage UK offshore energy investment, which would mean a reduction in oil and gas exploration and production, and thus force an increase in imports”.

The debate and discussion about the role that fossil fuels play in the planet’s energy mix is ​​lively, and appears to continue over the coming years.

earlier this year, Standard Chartered CEO Bill Winters acknowledged that most people would subscribe to what he called a “fair transition”.

“Those are two really important words… they just mean fairness, they also mean enforceability,” Winters said. Who was talking to CNBC’s Jeff Cutmore At the City Week forum in London, he said. “And moving means moving — meaning it takes time.”

“The idea that we can turn off the taps and end fossil fuels tomorrow is obviously ridiculous and naive,” Winters said. “Well, first of all, it wouldn’t happen and second, it would be very devastating.”

Winters went on to say that it would be good for climate change, but “bad for wars and revolutions and human life because you would have… ruin.” He argued that “the ultimate option of divestment” should be taken off the table.

Leave a Comment