What big oil owes the world
After the breakthrough on loss and damage at COP27, we must demand that big polluting corporations pay for what they’ve done, writes Daniel Willis.
It has hardly been a winter of discontent for the fossil fuel industry or for the shareholders of its biggest corporations. In 2022, the Big 5 oil companies reported more than $170 billion in profits, reaping huge rewards from their stranglehold over our economies while creating hardship for millions who have had to struggle with enormous energy bills. At the same time these companies have made a huge contribution to climate change through their historic and ongoing carbon-emitting activities.
Countries across the global south, meanwhile, are picking up the bill for this wanton destruction. Last year, Pakistan faced an estimated $30 billion reconstruction bill after devastating floods. Yet Pakistan has generated less than half a percent of global historic emissions. BP and Shell have contributed more than 2%, each. Where is the justice in letting those who have caused the crisis off scot-free, while leaving the countries least able to pay to pick up the tab?
The story is the same in Mozambique, Bangladesh, in the small island states of the Pacific and Caribbean, and in the Horn of Africa. People and communities who have done next to nothing to cause the climate crisis are facing the consequences of centuries of colonial extraction. While enabled by governments in rich countries and their financiers, it’s the biggest fossil fuel corporations which have carried out this destruction.
The agreement made at COP27 in Sharm el Sheikh last November was an attempt to begin rectifying this. Negotiators from the global south have long argued that rich, polluting countries owe climate compensation to those facing the worst impacts, and finally their demands were (at least partly) met, with the agreement to establish a new ‘loss and damage’ fund by this year’s COP28. Many of the details and mechanisms to make this fund work in practice are yet to be established, so we don’t know exactly how big a win it is yet – that is to be decided in the coming months. But the biggest question raised by the loss and damage fund is: who should pay for it?
Polluters must pay
Many governments across the global north are already tightening public expenditure after significant spending to ease the impacts of Covid-19 and the current energy crisis. In this context, building public support for large financial transfers to the global south, when the impact could be even further austerity and spending cuts here, is a challenge.
This is where the big polluters come in. Corporations like the Big 5 (that is, Chevron, ExxonMobil, BP, Shell and TotalEnergies) have got rich by ripping off households in the UK and by denying their responsibility for climate catastrophe in the global south. There is a clear and simple case for these companies to be the ones which pay for climate compensation. As Bolivia’s former lead negotiator Pablo Solón says, “if you break it, you buy it”.
Global Justice Now research put out during COP27 established that the Big 5 have very much broken it. Their historic emissions alone, which are more than 4 times as big as those of the 150 least emitting countries combined, have generated around $8 trillion in costs for the global south (for loss and damage, reducing carbon emissions and adaptation) that are currently going unmet.
That is why we are campaigning with allies to make polluters pay. A windfall tax on profits is a start, but we don’t want these companies to keep profiting from destruction. Our movement needs to develop new, innovative ideas on how we tax these climate criminals, and build public support and power to see them adopted by parliaments here and internationally.
We shouldn’t stop at taxing fossil fuel companies. We know that the fossil fuel industry is funded by the world’s biggest banks and financial institutions. In 2020, investments made by the asset manager Blackrock generated more carbon emissions than the whole of France. Taxing financial institutions that bankroll planetary destruction could be another route to funding loss and damage.
We must also pay attention to the role of the super-rich in climate change. In Europe, the poorest 50% of the population emits around 5 tonnes per person per year, while the top 0.01% contribute a staggering 2,530 tonnes each. Climate justice within the global north means things like introducing significant taxes on highly-polluting luxury goods and on wealth, with the proceeds split between the UK’s loss and damage contribution and climate justice measures at home.
This may seem a distant prospect, but many of these ideas are already being discussed and accepted as common sense by some in Westminster. The government has already introduced an (insufficient) windfall tax on fossil fuel profits, and opposition parties are exploring ideas around wealth taxation.
And in response to the energy crisis, public opinion has rarely been so firmly set against profiteering corporations in the fossil fuel industry, or so willing to consider bold new proposals for how to achieve justice in the face of multiple crises. This is our opportunity to tax the climate criminals. 2023 must be the year when we make polluters pay.
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This article appeared in the February 2023 issue of Ninety-Nine, the magazine for Global Justice Now members.
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Photo: David Mirzoeff/Global Justice Now