Photo Credit: United Nations
The United Nations Secretary-General strongly advises member countries to take a stronger stance against the use of fossil fuels. According to UN Secretary-General Antonio Guterres, governments should levy additional taxes on big firms to raise more climate change mitigation funds.
Guterres went on to say that governments would use tax money to help households when the economy faltered, and commodity prices skyrocketed to record highs.
The senior official at the United Nations General Assembly highlighted that the fossil fuel market is “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”
The fossil fuel industry is maintained by several parties, as listed by Guterres. But, according to him, everyone involved needs to be held accountable for the harm the business has induced to the world. “That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution,” he said.
The secretary-general also stressed the importance of public relations firms in ensuring that the industry is well-liked by the public, shielding them from the potential backlash against the masses through advertisements, propaganda, and other information-dissemination machinery that shift the focus of the public away from the real dilemma.
Company operations still require fossil fuel
While Guterres has ruled out the use of fossil fuels and other associated items, he has agreed that the countries as a whole still require them. Many businesses depend heavily on oil, coal, and gas. However, he believes that governments should begin planning their transition to protect the planet right now.
“Of course, fossil fuels cannot be shut down overnight. A just transition means leaving no person or country behind. But it’s high time to put fossil fuel producers, investors and enablers on notice.”
“Polluters must pay. And today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies.”
Revenue from the tax would be poured into expenditures
If governments implement the proposal, it is now necessary to determine where the tax income proceeds. According to Guterres, the funds should be disbursed to “countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices.”
The secretary previously issued a similar discourse in August, during which he called the record profits made by businesses during the energy shortage “immoral.” According to him, it is totally unfair for businesses to make the most money at a moment when many people are struggling, and the climate problem is disrupting communities.
“The combined profits of the largest energy companies in the first quarter of this year are close to 100 billion U.S. dollars. I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times.”
Higher taxes imposed on fuel companies
Several world leaders, notably Rishi Sunak of the United Kingdom have already echoed Guterres’ advice. Ursula von der Leyen, President of the European Commission.
“And don’t get me wrong: In our social market economy, profits are OK, they are good. But in these times, it is wrong to receive extraordinary, record revenues and profits benefitting from war and on the back of our consumers,” von der Leyen explained.
“In these times, profits must be shared and channeled to those who need it most. And therefore, our proposal also includes the fossil fuel electricity producers, who have to give a crisis contribution.”
However, Standard Chartered’s CEO believes that corporations must create a place for a “just transition” if nations want to phase out fossil fuel consumption.
“Those are two really important words … just means fair, it also means implementable. And transition means transition — it means it takes some time,” Winters explained.
“The idea that we can turn off the taps and end fossil fuels tomorrow, it’s obviously ridiculous and naive.”
Opinions expressed by CEO Weekly contributors are their own.