Guterres urges oil companies to be taxed for their excess profits

“it’s immoral that oil and gas companies make record profits from this energy crisis at the expense of the poorest people and communities and at an enormous cost to the climate. General secretary of the United Nations.

At the press conference to present the third report of the UN Crisis Response Group on the global impact of the war in Ukraine, António Guterres recalled that the combined profits of the largest energy companies reached close to 100,000 million dollars in the first quarter of this year and considered that there should be a tax on said profits.

“I urge all governments to tax these excess profits and to use the funds to support the most vulnerable people in these difficult times,” he said.

Guterres was emphatic in stating that “this grotesque greed is punishing the poorest people and vulnerable, while destroying our only common home, the planet”, for which he called on the population to send a clear message to the fossil fuel industry and its financiers, reducing the demand for hydrocarbons to force them to invest in clean energy.

“Popular levy, I guarantee it”

Asked about the popularity that type of tax would have, Guterres replied: “nothing would be more popular than tax excess profits from oil and gas companies and distribute that money to the most vulnerable families. I do not see any problem of popularity in this, there would be a problem of lobbying and lobbying is very powerful when policies are defined, we know that this happens and that it is not very worthy. But popularity-wise, I guarantee you it would be extremely popular.”

“The truth is that we have seen excessive, outrageous profits in the oil and gas industry at a time when we are all losing money… we are all seeing our income diminished and suddenly we have a small group that has contributed enormously to climate change and is benefiting from this situation. What we are saying is that these excessive profits must pay taxes and that the money obtained with this tax must be made available to the most vulnerable and hit precisely by the high prices that benefit a very limited number of companies in the world. “, accurate.

After presenting this first of the four recommendations contained in the report of the Response Group, the head of the UN raised the second: that all countries, especially developed ones, should manage energy demand. “Energy conservation, promotion of public transportation and nature-based solutions are essential to this,” she said.

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Sri Lanka is facing incredible fuel shortages as the nation is wracked by economic turmoil.

speed up the transition

A third recommendation was to speed up the transition to renewable energy, which in most cases they are cheaper than fossil fuels.

At this point, he insisted that storage technologies, including batteries, should become public goods.

Governments must expand and diversify supply chains for raw materials and renewable energy technologies, as well as cut red tape around the energy transition and change fossil fuel subsidies to support vulnerable households and boost investments in renewable energy, he explained.

Guterres also advocated providing aid to the most affected people, communities and sectors, with social protection schemes and work and livelihood alternatives.

large-scale financing

The fourth recommendation refers to increase private and multilateral financing on a large scale for the transition to green energy.

He recalled that investments in renewable energy must multiply by seven to meet the goal of zero net carbon emissions, for which he urged multilateral development banks to take more risks to help countries develop adequate regulatory frameworks and modernize their electricity networks.

“I urge the shareholders of those banks to exercise their rights by making sure they are fit for that purpose,” he added.

Before ending his presentation, Guterres reiterated that all countries have a role in the energy crisis and that everyone is attentive to what the others are doing.

“There is no place for hypocrisy. Developing countries are not without reasons to invest in renewable energy. Many of them are living with the severe impacts of the climate crisis (…) What they lack are concrete and viable options”, she pointed out.

Meanwhile, he added, the industrialized countries urge these nations to invest in renewable energy without providing sufficient social, technical or financial support.

The Secretary-General regretted that some developed countries are giving universal subsidies to gas stations, while others are reopening coal plants.

“Justifying such measures, even on a temporary basis, is difficult,” he said, adding that, if it is done, it must be for a limited time and in order to relieve the poorest and most vulnerable population, without neglecting the prompt transition to renewable energies.

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Switching to renewable energy could prevent between four and seven million deaths annually from air pollution worldwide.

Technology transfer

The general secretary of the UN Conference on Trade and Development (UNCTAD), who from Geneva added his voice to that of António Guterres to express the need for energy companies to pay taxes on the profits obtained during the crisis to benefit the population most in need.

Similarly, Rebeca Grynspan stressed that it is imperative to “increase funding and technology transfer towards developing countries and towards those that lack the most energy in the world”.

More hungry people

The third report of the Response Group warns that the world is going through a global food, energy and financial crisis in which even 345 million people from 82 countries will be acutely food insecure by the end of 2022.

Likewise, it highlights that one of the effects of this conflagration will be that 47 million more people join the ranks of hunger.