‘Tax oil companies feasting on profits as planet burns’ – UN Head

Sep 23, 2022 News

---

– Says hold them and their enablers accountable

Kaieteur News – “The fossil fuel industry is feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns,” those are the words of the United Nations (UN) Secretary General, António Guterres.

The UN Chief made the statement in his address at the UN General Assembly in New York on Tuesday. Guterres explained that oil and gas companies should be hit with new windfall taxes to suffice the countries suffering from climate change, and soaring energy and food prices – especially since majority of the energy giants have reported record-high profits as a result of Russia’s war in Ukraine and the energy crisis send prices soaring.

“Our world is in big trouble divides are growing deeper, inequalities are growing wider and challenges are spreading further,” he said.

The UN Chief warned that ‘a winter of global discontent is on the horizon’ and he cited, “the cost of living crisis is raging, trust is crumbling, inequalities are exploding and our planet is burning, people are hurting with the most vulnerable suffering the most.”

To this end he said: “we need to hold fossil fuel companies and their enablers to account,” adding “that includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution.”

Guterres told the Assembly, “Today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies.” He stated that the 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.

The Secretary General stated that once in a lifetime climate shocks may soon become once a year events and noted too that the climate crisis is a case study in moral and economic injustice.

He then pointed out that, “The G20 emits 80 percent of all greenhouse gas emissions but the poorest and most vulnerable those who contributed least to this crisis are bearing its most brutal impacts.”

Guterres added that while the aforementioned countries are suffering – the fossil fuel industry is feasting on billions of dollars in subsidies and windfall profits while households budget shrink and the planet burns.

The UN Chief highlighted that while the energy companies are making big profits – approximately 94 countries home to 1.6 billion people face a storm of economic and social fallout from the pandemic soaring food and energy prices, crashing depth burdens, spilling inflation and the lack of access to finance. To this end, he stated that the cascading crises are feeding on each other, compounding inequalities, creating devastating hardship, delaying the energy transition and threatening global financial meltdown.

Moreover, this is not the first time the UN Chief has called for governments to tax energy companies.  In fact, back in August, Guterres had slammed fossil fuel companies for the “excessive and immoral profits” they made during the energy crisis sparked by the Russia-Ukraine war in February last.

Since then the Secretary General issued a stern call for the massive gains of these firms to be taxed, and the money returned to vulnerable citizens to help them weather the financial storm.

It was during the Conference of Parties to the Treaty on the Non-Proliferation of Nuclear Weapons at the United Nations in New York City on August 1, 2022, when Guterres said it is immoral for oil and gas companies to be making record profits on the backs of the poorest people and communities and at a massive cost to the climate.

The Secretary General had said, “The combined profits of the largest energy companies in the first quarter of this year are close to 100 billion US$ dollars.” In fact, Kaieteur News’ research found that oil majors such as Exxon Mobil, Chevron, Shell and TotalEnergies produced a combined profit of US$51 billion in the most recent quarter.

Guterres had stated too, “I therefore urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times. I urge people everywhere to send a clear message to the fossil fuel industry and their financiers that this grotesque greed is punishing the poorest and most vulnerable people while destroying our only common home, the planet.”

The UN Secretary General comment to tax energy giants comes on the heels of a European Union (EU) proposal to introduce a windfall tax on oil, gas and coal companies. The European Commission is proposing that EU countries take a 33 percent share of the companies’ surplus profits.

The United Kingdom introduced had a 25 percent windfall tax earlier this year to provide relief for people struggling with their energy bills.

In America, companies face a 50 percent windfall tax on their mega-profits while a 25 percent is applied to energy firms in the UK.  Closer to home, Trinidad and Tobago said in February that it would be strengthening its legislative framework in an effort to net more gains being made by oil companies during the energy crisis.

Whereas, Guyana is the only country thus far that stands out as the exception on this matter. After giving away major tax concessions and favourable exemptions in the 2016 Stabroek Block Production Sharing Agreement (PSA) to ExxonMobil and its partners, authorities have said there is no interest in going after a windfall tax. They reasoned that upsetting the deal or mood of the investment climate is not part of the administration’s modus operandi.

 

---

---