A small tax on seven major oil and gas companies could expand the UN Fund for Responding to Loss and Damage by over 2000%, according to a new analysis. The proposed Climate Damages Tax aims to hold these companies accountable for their climate impact and generate significant revenue to assist developing nations impacted by extreme weather events, which cost billions annually.
A recent analysis by Greenpeace International and Stamp Out Poverty reveals that implementing a modest tax on seven of the world’s largest oil and gas corporations could enhance the UN’s climate loss and damage fund by over 2000%. This proposed tax aims to address the financial burdens of climate-related disasters caused by extreme weather events. The organizations advocate for a sustained tax on fossil fuel extraction, complemented by levies on excess profits to foster a climate finance mechanism.
The Loss and Damage Fund, recently renamed Fund for Responding to Loss and Damage, was established during COP27 in Egypt to assist developing nations in compensating for the impacts of climate change-related disasters. The current fund holds merely US$702 million in pledges. The proposed Climate Damages Tax (CDT) suggests an initial charge of US$5 per tonne of CO₂ equivalent emitted by fossil fuels extracted, positing that a tax on leading oil and gas companies could significantly bolster this fund.
In conclusion, the analysis underscores the urgent need for a Climate Damages Tax that holds major polluting companies accountable for the financial consequences of climate change. By levying this tax and reallocating the financial burden from the most affected communities to the corporations responsible, the global community can work towards a more equitable and sustainable future. The proposal envisions generating substantial revenue, which could be used to mitigate climate impacts for vulnerable populations worldwide.
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