Climate justice could be paid with wealth taxes and fossil fuel levies, charity says
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The UK has been urged to levy a tax on millionaires and fossil fuel firms in order to increase contributions to a fund designed to alleviate the worst impacts of climate change in developing countries.
A new report from the charity Christian Aid has suggested ways in which the UK can contribute 3.5 per cent to the recently agreed 'Loss and Damage Fund', created at last year’s United Nations Climate Change Conference. The Fund is an agreement to provide funding to countries who are most vulnerable and affected by climate change.
Factoring in the UK’s historic emissions and its relative wealth, Christian Aid previously calculated the UK’s contribution of the $100bn (approximately £80bn) climate finance commitment at 3.5 per cent.
The report suggests implementing a wealth tax at a rate of 0.5 per cent levied on wealth in excess of £1m which would raise an estimated £15bn. This also has the advantage of being targeted towards those who are likely to be disproportionately high polluters in their consumption and personal investments.
Another option would see fossil fuel companies generating the UK’s contribution to the Fund. Taxes could be increased on excess profits from fossil fuel production to 95 per cent, which according to Tax Justice UK could raise around £13bn.
Fossil fuel companies have enjoyed record profits in recent years due to soaring energy prices.
Last year, after months of mounting pressure from MPs and public bodies, then-chancellor Rishi Sunak announced that millions of households would receive a £400 discount on their energy bills paid for by a £5bn tax on oil and gas giants. Critics felt the tax was not high enough, considering the size of the profits from energy firms. Firms in the sector, meanwhile, warned that the tax would curtail investment in fossil fuel extraction in the North Sea.
A third option for raising funds could be by combining smaller targeted taxes, such as the existing International Air Passenger Levy (£3.5bn); revenues from the Emissions Trading Scheme; an expanded Financial Transactions Tax, or the existing Energy Profits Levy.
The latest estimates of the cost of loss and damage from climate change is between £231-463bn a year by 2030.
The issue of loss and damage rose to the top of the global agenda over the last year, as it emerged that polluting countries had failed to cut their emissions fast enough.
Report author, Christian Aid’s climate justice policy advisor, Nushrat Chowdhury, said: “I’ve seen first-hand the damage caused by the climate crisis. Lives and livelihoods are being destroyed in some of the poorest countries on earth because of lethal droughts, severe floods and devastating storms.
“Climate change is the biggest issue of global injustice facing the world today. Some of the people that have done the least to cause it are experiencing the most terrible consequences. How we address that injustice fairly is at the heart of international climate negotiations.”
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