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UN’s Guterres Says ‘Polluters Must Pay’, Calls for Tax on Fossil Fuels

Antonio Guterres photographed in New York last September. On Tuesday, he said fossil fuel companies and their “enablers” must be held accountable.

John Minchillo | Swimming pool | Getty Images News | Getty Images

The UN secretary-general said on Tuesday that developed economies should impose an additional tax on the profits of fossil fuel companies, with funds being diverted to countries affected by climate change and households struggling with the cost crisis. of life.

In a broad speech before the United Nations General Assembly in New York, Antonio Guterres described the fossil fuel industry as “reveling in hundreds of billions of dollars in subsidies and windfall profits as household budgets shrink and let our planet burn”.

Fossil fuel companies and their “enablers” must be held accountable, he continued. “This includes banks, private equity firms, asset managers and other financial institutions that continue to invest and underwrite carbon pollution.”

It also included what he called “the huge public relations machine raking in billions to shield the fossil fuel industry from scrutiny.”

Despite these remarks, António Guterres seemed to recognize the reality of the current situation, in which coal, oil and gas continue to play a crucial role in the modern world, both in developed and emerging economies.

“Of course, fossil fuels cannot be stopped overnight,” he said. “A just transition means leaving no one and no country behind. But it’s high time to warn fossil fuel producers, investors and enablers.”

“Polluters must pay. And today I call on all developed economies to tax the windfall profits of fossil fuel companies.”

António Guterres said these funds should be redirected to “countries suffering loss and damage from the climate crisis; and to people struggling with rising food and energy prices”.

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Guterres’ speech on Tuesday reinforced the comments he did in august, when he said it was “immoral that oil and gas companies are making record profits out of this energy crisis on the backs of the poorest people and communities and at enormous cost to the climate”.

“The combined profits of the largest energy companies in the first quarter of this year are close to $100 billion,” he added. “I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people in these difficult times.”

The idea of ​​imposing a one-time or one-off tax on energy companies has gained traction in some quarters in recent months, with the sector reaping huge profits amid soaring commodity prices, while many households and businesses are struggling with rising energy prices. bills and a wider cost of living crisis.

In May, for example, former UK finance minister Rishi Sunak announced details of what he called a “temporary and targeted energy profit tax” on oil and gas companies.

Last week, European Commission President Ursula von der Leyen said it proposed “a cap on the revenues of companies that produce electricity at low cost”. These companies, she argued, “were making revenue they never accounted for, never even dreamed of.”

“And don’t get me wrong: in our social market economy, profits are fine, that’s fine,” von der Leyen added. “But in these times, it is a mistake to receive extraordinary and record-breaking incomes and profits through war and on the backs of our consumers.”

“In these times, the profits must be shared and channeled to those who need it most. And therefore, our proposal also includes producers of electricity from fossil fuels, who must make a crisis contribution.”

Overall, von der Leyen said the proposal would raise more than 140 billion euros, or about $140.1 billion.

Although such actions and initiatives have supporters, there is also opposition. After Sunak announced his plans, for example, Offshore Energies UK said the tax would “discourage UK investment in offshore energy, which means lower oil and gas exploration and production, and would thus force an increase in imports”.

The debate and discussion about the role that fossil fuels play in the planet’s energy mix is ​​alive and likely to continue in the years to come.

Earlier this year, Standard Chartered CEO Bill Winters acknowledged that most people would buy into what he called a “just transition”.

“Those are two really important words… just means right, it also means achievable,” said Winters, speaking to CNBC’s Geoff Cutmore at the City Week forum in London. “And transition means transition – it means it takes time.”

“The idea that we can turn off the taps and end fossil fuels tomorrow, that’s obviously ridiculous and naive,” Winters said. “Well, first of all it’s not going to happen and secondly it would be very disruptive.”

It would be good for climate change, Winters continued, but “bad for wars, revolutions and human life because you would… wreak havoc.” The “ultimate divestment option” needed to be taken off the table, he argued.