MAKING POLLUTERS PAY: More Pledges & Calls for Taxes on Fossil Fuel Profits at COP28

GLOBAL STOCKTAKE #GST

More pledges for climate finance, including under the newly operationalized Loss and Damage Fund, as well as calls for taxes on fossils were some of issues that emerged on Day Two of COP28 in Dubai.

UN secretary general Antonio Guterres, speaking on the day when focus was on the Global Stocktake meant to reflect on the status of climate action, noted that “developing countries are being devastated by disasters they did not cause” and that “extortionate borrowing costs are blocking their climate action plans and support is far too little too late.”

In Kenya, floods killed at least 120 people in November 2023, according to the country’s National El Niño Steering Committee. Kenyan president William Ruto said it was time for implementation.

“Kenya has been besieged by relentless torrents that claim lives and displace countless communities. The ensuing injury, loss and damage, extends beyond the human toll to the destruction of vital infrastructure,” said Ruto.

“The first Global Stocktake is not just a checkpoint: it’s a crucial step forward in our collective response to climate change. It must encompass strategies for mitigation, adaptation, addressing loss and damage and fundamentally its means of implementation.”

MORE PLEDGES

In addition to nations which made pledges to the Loss and Damage Fund on Day One, France and Italy announced a €100m (nearly $109m) as commitment to the fund.

But French president Emmanuel Macron demanded a clear distinction of intermediate countries from the list of poor ones. Climate activist group Loss and Damage Collaboration (L&DC) said “the conditionality suggested by Emmanuel Macron is worrying,” adding that “developed countries making pledges to the Loss and Damage Fund should not try to earmark how finance is spent, which should be based on the needs of developing countries.”

L&DC further noted: “This contributor driven ‘culture’ is one of the real dangers of the World Bank  being the interim host of the Loss and Damage Fund as under the World Bank contributors have a say over how money is spent.”

The UAE has continued to lead the way, controversy on its reluctance to phase out fossil fuel notwithstanding, also pledged $200m to the IMF Resilience and Sustainability Trust. The concessional financing will see most vulnerable communities and nations access funds at lower interest rates with the view of building climate resilience.

World Bank Group also pledged to raise its climate finance target to $40bn by 2025. The funds will be shared equally to support mitigation and adaptation projects.

At the COP28 Business and Philanthropy Climate Forum, Green Climate Fund, Allied Climate Partners and Allianz Global Investors pledged to mobilize $5bn from their pool of  philanthropies, development finance institutions, the private and public sectors. The funds will go to supporting climate transition in emerging economies.

TAX FOSSIL FUEL PROFITS

Guterres was clear in his calls for the setting up of windfall taxes on fossil fuel profits, adding that fossil fuel companies “must now pay up for the loss and damage they have caused.”

“I urge governments to help [the fossil fuel] industry make the right choice by regulating, legislating, putting a fair price on carbon, ending fossil fuel subsidies and adopting a windfall tax on profits,” he emphasized.

“We cannot save a burning planet with a fire hose of fossil fuels. We must accelerate a just equitable transition to renewables. The science is clear, the 1.5 degree limit is only possible if we ultimately stop burning all fossil fuels. Not reduce. Not abate. Phase out.”

Mia Amor Mottley, the prime minister of Barbados, had done her homework on the mathematics of taxing oil and gas, air travel and shipping.

“If you have made $4 trillion in profits last year. $200bn will not hurt you. Treat 95 per cent of your profits as 100 per cent and give the other five per cent to be shared between the Loss and Damage Fund and adaptation,” Mottley explained.

“When you take $200bn from oil and gas, $70bn from international shipping, another $40-50bn from international air travelers and a financial transaction tax, we have a dedicated source of funds, not just for Loss and Damage but to build resilience.”

Read more on our #COP28 coverage Here and There.

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