How to make big polluters pay for their damages?

9. Dezember 2015 HW

Just 90 oil, gas and coal companies are responsible for 63 per cent of human-caused CO2 emissions in the atmosphere. An initiative launched at the UN Climate Summit in Paris wants to make them pay for their climate damages.

The negative impacts of burning fossil fuels such as oil, gas and coal are visible already now: sea-level rise, glacial retreat, land and forest degradation, desertification.

Now the question is how the biggest fossil fuel producers can be held financially responsible for the damages their products are causing.

In late 2013, a scientific study about the “Carbon Majors” was published, that said more than two thirds of man-made emissions in the atmosphere was down to just 90 fossil fuel companies (see These 90 entities include Chevron, ExxonMobil, Saudi Aramco, BP, Gazprom and Shell. This led the Climate Justice Programme and the Heinrich Boell Foundation to the idea that a levy on the point of fossil fuel extraction could pay for the impacts of climate change.

A new source of finance?

“We propose that a global fossil fuel extraction levy be established and paid into to the international Loss and Damage Mechanism. This funding would be used to assist the poorest and most vulnerable communities suffering the worst impacts of climate change”, said Juli-Anne Richards from the Climate Justice Programme.

“This fossil fuel extraction levy needs to be part of a general phase out of fossil fuels.”

The initiative hopes that a carbon levy could feed the funds for those countries who suffer most from the impacts of climate change.

“Climate finance is already inadequate – with a huge gap between what is needed and what is being offered. A new source of finance from a levy on Big Oil, Coal and Gas Producers could unlock some of the objections by rich countries to including loss and damage in a new Paris agreement”, said Lili Fuhr from Heinrich Boell Foundation.

Their latest proposal suggests to charge the carbon majors $2 for every tonne of carbon dioxide they release into the atmosphere. In 2014 this would have meant $50 billion in total coming from Chevron, Exxon & Co.

According to the initiative the levy would be applied globally, but countries at a low level of responsibility and capability should be able to apply to the central coordinating body to temporarily keep the levy for domestic climate change use.

The Climate Justice Programme is convinced that existing international law, in particular the polluter pays principle, the no harm rule and the right to compensation support such a system.

“Our proposal draws from precedents such as the IOPC, the oil spill compensation regime which collects levies from companies that ship oil internationally which are used as compensation in the incidence of oil spills”, said Juli-Anne Rcihards.

But how does the oil, gas and coal industry react to the new proposed taxation? Until now no reponse. Now consumers fear that they already think of methods to pass the costs of any new levy to their customers as they did so many times before.

Photo: Paul Langrock
Graphics: Climate Justice Programme