Tax fossil fuel firms, raise $720B for loss and damage fund by 2030 – report
MANILA, Philippines – Advocates urged the Philippine government to support the Climate Damages Tax (CDT) that would impose levies on fossil fuel companies and could gather $720 billion for the fund meant to help vulnerable countries weather the impacts of climate change.
“If President Marcos Jr. is sincere with his pronouncements when he talks about solutions to the climate crisis, he will heed the clamor of communities who are standing up to carbon majors,” Greenpeace campaigner Jefferson Chua said in a statement on Tuesday, May 7.
A report released last April and endorsed by organizations around the world, including Greenpeace, Stamp Out Poverty, and Climate Action Network, proposed the CDT, defined as a “fossil fuel extraction charge” that could generate money for the loss and damage fund and assist developing nations’ transition to renewable energy.
The authors of the CDT report proposed $5 per tonne of carbon dioxide emissions, to increase by another $5 per year.
According to proponents, this could raise $44.6 billion for the loss and damage fund in the first year and reach $119.8 billion by the third year.
If the CDT would be introduced in 2024, they are looking at a revenue of $900 billion – $720 billion of which would go to the loss and damage fund – by the end of the decade.
Organization for Economic Co-operation and Development countries stand to benefit from the CDT, too, the report said, as revenues from this mechanism could help them contribute finance to the loss and damage fund without overburdening their taxpayers.
According to climate change specialist Rosa Perez, the CDT could fund the reconstruction of stronger homes, emergency cash assistance, social programs during severe droughts, and the relocation and retraining of workers.
The Philippines is already part of the inaugural board of the loss and damage fund following the conclusion of the 28th United Nations Climate Change Conference or COP28 in 2023. (READ: At COP28, Philippines amplifies bid to host world’s climate disaster fund)
Loss and damage refers to the irreversible impacts of climate change despite efforts of concerned countries to adapt and minimize risks.
“Shining a spotlight on the fossil fuel producers in this way puts pressure on them to change their business model or risk their reputation with consumers and their influence over governments,” the report read.
While the “polluter pays” principle is not new, previous dialogues had focused on making countries that produce the most emissions pay. Wealthy countries have so far pledged over $700 million to the loss and damage fund.
However, oil, coal, and gas companies are still not made to pay for damages, even though they account for majority of the world’s emissions.
In a 2023 report, international think tank Climate Analytics estimated $20 trillion worth of damage caused by the top 25 oil and gas companies from 1985 to 2018. The study calculated the cost of damage by pegging the social cost of carbon at $185 per tonne of carbon dioxide emissions.
Carbon emissions from the fossil fuel industry contribute to the warming of the planet, exacerbating weather events like extreme heat and severe storms and droughts. – Rappler.com