Fossil Fuel Companies Should be Taxed Higher says U.N. Secretary General

The U.N. Secretary-General firmly advises member countries to adopt a more aggressive position in the struggle against the use of fossil fuels. According to Secretary-General Antonio Guterres, governments should impose higher taxes on these businesses to raise money for the mitigation of climate change’s repercussions.

In light of the deteriorating economic situation and record-high commodity prices, Guterres stressed that nations would use the tax revenue to fund programs to help families.

In his remarks to the General Assembly, the top official described the fossil fuel sector as “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”

The fossil fuel sector is maintained by several stakeholders, according to Guterres. However, he claims that every one of them must bear responsibility for the harm the industry has inflicted on 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 emphasized the function of public relations firms, which help protect the business from public backlash by disseminating information through marketing, propaganda, and other means and distracting people away from the real issue.

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Operations still need fossil fuel

While Guterres is barring the use of fossil fuels and other associated products, he recognized that the countries still require them essentially. Many businesses utilize gas, coal, and oil extensively in their daily operations. However, he thinks that nations must start preparing for their transition now to preserve the environment.

“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.”

Tax revenue is used for essential expenditures

Now that it’s crucial to know where the tax money flows if nations implement the idea. The funds should be distributed, in Guterres’ opinion, to “countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices.”

The secretary initially conveyed a similar speech in August, in which he called companies’ record profits during the energy crisis ‘immoral.’ He stated that it is grossly unfair for companies to earn the highest revenues at a time when many are trying to cope, and the climate crisis is impacting 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.”

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Fuel companies need to be taxed higher

Guterres’ statement has already been supported by other leaders, including U.K. Prime Minister Rishi Sunak, and 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,” stated von der Leyen.

“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.”

According to the CEO of Standard Chartered, a place for “just transition” for businesses is crucial if nations want to quit using fossil fuels.

“Those are two really important words … just means fair, it also means implementable. And transition means transition — it means it takes some time,” explained Winters.

“The idea that we can turn off the taps and end fossil fuels tomorrow, it’s obviously ridiculous and naive.”

Source: CNBC

Opinions expressed by US Business News contributors are their own.

Victor Hawkins

Posted by Victor Hawkins

Victor is a writer and business owner. He grew up wanting to be just like his father, a successful entrepreneur.

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