Photo Credit: United Nations
The U.N. secretary-general urges all of the organization’s members to take a more assertive position in the struggle against the use of fossil fuels. According to Secretary-General Antonio Guterres, countries should charge these businesses more taxes to raise more money to mitigate climate change’s consequences.
In light of the weakening economy and record-high commodity prices, Guterres stated that nations would use the tax revenue to provide financial support to households.
The top official at the U.N. General Assembly described the fossil fuel industry as “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”
Guterres listed several entities as maintaining the fossil fuel industry. He contends that they should all be held accountable for the harm the industry has caused to the world. “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 emphasized the function of public relations firms that contribute to ensuring that the industry is well-liked by the general public, protecting them from potential backlash from the masses through advertisements, propaganda, and other information-dissemination tools that deflect the general public’s attention away from the real issue.
Gas and fossil fuel is still vital to operations
Even while Guterres opposes using fossil fuels and other associated items, he acknowledged that the countries still require them generally. Many businesses rely heavily on gas, coal, and oil daily. However, he thinks nations must start preparing for their transition to safeguard the environment immediately.
“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.”
The use of tax revenue
Knowing where the tax money goes will be crucial if nations implement the plan. According to Guterres, the funds ought to be allocated to “countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices.”
The secretary previously gave a similar speech in August, during which he called the massive profits made by companies during the energy crisis “immoral.” He claimed that it is incredibly unfair for businesses to profit the most at a time when many individuals are suffering, and the climate crisis is influencing communities.
“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.”
Imposing higher taxes on fuel companies
Guterres’ statement has already been echoed by other leaders, notably Rishi Sunak of the United Kingdom, and Ursula von der Leyen, President of the European Commission.
“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 stated.
“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.”
But the CEO of Standard Chartered says it’s critical to create a “fair transition” environment for businesses if nations want to stop using fossil fuels.
“Those are two really important words … just means fair, it also means implementable. And transition means transition — it means it takes some time,” Winters said.
“The idea that we can turn off the taps and end fossil fuels tomorrow, it’s obviously ridiculous and naive.”
Opinions expressed by US Insider contributors are their own.