As storms, floods, fires, and droughts are hitting us more frequently and with greater intensity around the world, the costs of the climate crisis are going up significantly. Bold taxes or fines on oil and gas corporations would help to raise vital revenues which should be used to ensure that communities are given the support they need to recover, rebuild and invest in climate solutions. 

Between 2000 and 2019, the profits of the fossil fuel industry amounted to US$31.315 trillion. This equates to about US$4.3 billion per day! This is just one snapshot of the amount of money that could be reclaimed to support climate-impacted communities – but only if governments have the bravery to seize some of the huge opportunities this year to make polluters pay. 

What could climate taxes on oil and gas companies look like?

Levies on the extraction of fossil fuels and bolder taxes on profits are just two examples of the types of polluter pays mechanisms that governments should begin rolling out without delay. For example, if a fossil fuel extraction levy was imposed by 38 of the richest countries, beginning at a low rate of $5 per tonne of CO2-equivalent and increasing by $5 per tonne each year, this could raise a total of $900 billion by 2030. This idea of a ‘Climate Damages Tax’ is something that over 100 climate groups around the world are supportive of.

Applying that formula, Greenpeace International and Stamp Out Poverty found that a minimal tax of $5 per tonne of CO₂-equivalent on the fossil fuel extraction of TotalEnergies in 2023 alone could have covered the costs of Kenya’s 2024 floods 30 times over. 

Here’s a few other examples of the sorts of things that our governments could invest in through making oil and gas polluters pay: 

• Emergency support after extreme weather events: Funds to help communities cover the costs of relocation, or the rebuilding of homes and infrastructure after a devastating flood, storm or fire, or for coastal communities facing sea-level rises.   
• Tackle rising food prices: Support for farmers to adapt to more climate-resilient, sustainable food production, to help stop food prices spiralling out of control in response to climate change. 
• Reduce pressure on energy bills: Support for the lowest income households so they can pay their electricity bills, which are at risk of increasing due to extreme weather. 
• Prevent people from dying in heat waves: Upgrade buildings with insulation, reflective surfaces, and good ventilation to avoid them from overheating, and boost tree planting in urban areas to provide more shade. 
• Protect homes from being flooded: Invest in wetland and forest protection and restoration, soil quality improvements and other natural flood defences. This should go alongside investing in robust early warning systems to help communities and government authorities plan in advance of a hazardous climate event, so that fewer lives or livelihoods are threatened.  

Delivering climate justice by making polluters pay 

Taxing and fining oil and gas companies more for climate destruction is a no-brainer. It can benefit everyone in the face of growing climate shocks. Importantly, it’s also a way to ensure that the people most impacted by climate change – living in the greatest poverty and least responsible for causing the climate crisis in the first place – are given the support they need and deserve. For example, despite causing only a small fraction of overall global emissions, six typhoons struck the Philippines in less than a month at the end of 2024.

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- Albedin Simanth

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