Fossil fuel companies ‘feasting’ on profits as ‘planet burns’
Rich economies should hit oil and gas companies with new windfall taxes to provide help for countries suffering from climate change, and people struggling with soaring energy and food bills, UN Secretary General António Guterres says.
The UN chief on Tuesday accused energy giants of “feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns”.
Guterres’ comments, at the UN General Assembly in New York, come on the heels of a European Union proposal to introduce a windfall tax on oil, gas and coal companies, many of which have reported record-high profits as Russia’s war in Ukraine and an energy crunch send prices soaring.
The European Commission is proposing that EU states take a 33 per cent share of the companies’ surplus profits. The United Kingdom introduced a 25 per cent windfall tax earlier this year to provide relief for people struggling with their energy bills but newly installed Prime Minister Liz Truss has said she won’t extend it to pay for a much bigger program of subsidies this winter and next. US President Joe Biden’s administration mulled the idea in the summer but it gained little momentum.
“Today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies,” Guterres told the Assembly. “Those funds should be redirected in two ways: to countries suffering loss and damage caused by the climate crisis, and to people struggling with rising food and energy prices.”
His comments also come as parts of the world are battered by extreme weather events supercharged by the human-induced climate crisis. More than 1500 people died in Pakistan over three months of extreme monsoonal rain that scientists have linked to climate change. More than 300 people have died in floods in Nigeria this year, disaster management authorities there say.
Typhoons and hurricanes have brought floods to Puerto Rico, the Dominican Republic and Japan this week. Drought is impacting vast swathes of the United States, China and Europe.
Record profits, rising inequality
Guterres warned that a “winter of global discontent is on the horizon,” with inequality “exploding” and the cost-of-living crisis “raging” while the planet burns.
“We need to hold fossil fuel companies and their enablers to account,” he added. “That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution.”
In the second quarter this year, oil and gas giant Shell earned record profits of $US11.5 billion ($17.2 billion), breaking its previous record posted just three months earlier. ExxonMobil also broke its record in the same period, with $US17.9 billion ($26.77 billion), nearly double what it made in its very profitable first quarter. BP’s profits hit a 14-year high of $US8.45 billion ($12.64 billion).
The UN General Assembly is likely to be dominated by Russia’s war in Ukraine. The climate crisis, nonetheless, will be unavoidable, intersecting with several issues on the agenda, including energy and food security.
“The climate crisis is the defining issue of our time,” Guterres said. “And it must be the first priority of every government and multilateral organisation. And yet climate action is being put on the back burner — despite overwhelming public support around the world.”
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