A new report from Greenpeace International and Stamp Out Poverty has proposed that taxing some of the world’s largest oil and gas corporations could provide a significant boost to a United Nations fund aimed at addressing climate emergencies. The proposal was released during the COP29 climate summit in Baku.
The nonprofits advocate for a progressively increasing climate damages tax on fossil fuel extraction, paired with levies on excess corporate profits. Such measures, they argue, would create a sustainable revenue stream to aid communities already suffering from the impacts of climate change.
A Funding Gap for Climate Loss and Damage
The UN Fund for Responding to Loss and Damage (FRLD), operationalized during COP28 in the UAE, currently holds just $702 million—far short of the $100 billion per year that developed nations pledged in 2009 to provide by 2020. The fund was conceived to help developing countries manage the fallout from climate-driven natural disasters.
According to the Greenpeace-Stamp Out Poverty analysis, a climate damages tax imposed on seven leading international oil and gas firms could deliver $15.02 billion to the FRLD in its first year. Expanding the policy to include all OECD nations could generate an estimated $900 billion annually by 2030, potentially transforming global climate financing.
A Year Marked by Climate Extremes
The call for increased funding comes as 2024 is shaping up to be one of the most devastating years on record for extreme weather events. Hurricanes Beryl and Helene struck the United States, heatwaves scorched India, Super Typhoon Carina battered the Philippines, and catastrophic floods swept through Brazil, Kenya, and Tanzania. These events have claimed thousands of lives and inflicted a total economic loss of $64.6 billion, including $25 billion from heatwaves in India alone, the report noted.
India, which recorded over 40,000 cases of heatstroke and more than 100 heat-related deaths by mid-June, experienced temperatures soaring to nearly 50°C in some northern regions, according to a July UN report.
Between 2000 and 2019, extreme heatwaves were responsible for an estimated 400,000 deaths annually, with Asia bearing 45% of the global toll.
Renewed Financial Commitments Sought at COP29
The ongoing COP29 conference is focused on establishing a new collective quantified goal (NCQG) for climate finance, which will replace the unfulfilled $100 billion annual pledge post-2025. India has urged wealthier nations to commit at least $1.3 trillion annually to assist developing countries in climate adaptation and mitigation efforts.
Taxing Polluters: An Economic and Moral Responsibility
Fossil fuels have driven approximately 70% of global carbon dioxide emissions since the industrial revolution, with the remainder attributed to deforestation and agricultural practices. The report highlights that just 20 fossil fuel companies were responsible for one-third of global emissions between 1965 and 2018.
“Taxing the fossil fuel industry is not just a fiscal necessity—it is a moral imperative,” said Avinash Chanchal, Deputy Program Director for Campaigns at Greenpeace South Asia. “Revenue from a climate damages tax could be transformative for vulnerable communities, particularly in the Global South, as they grapple with loss and damage.”
David Hillman, Director of Stamp Out Poverty, emphasized the broader societal benefits of such taxes. “A climate damages tax, alongside other levies on high-emitting sectors, would make polluters accountable while providing vital resources for the transition to cleaner energy and greener jobs,” he said.
Proposed Tax Model
The report suggests introducing a climate damages tax of $5 per tonne of CO₂-equivalent emissions generated by the seven major oil and gas firms—Exxon Mobil, Shell, Chevron, TotalEnergies, BP, Equinor, and ENI—during the first year. The tax rate would increase by $5 annually, adjusted for inflation.
These companies collectively earned nearly $150 billion in profits last year, underscoring their financial capacity to contribute to climate reparations.
As COP29 continues, the call for equitable financial solutions to combat climate change grows louder, with the proposed tax framework offering a tangible path toward bridging the persistent funding gap.