Home » Latest World News » UN Chief Urges Governments to Tax “Immoral” & Excessive” Oil and Gas Profits

UN Secretary-General António Guterres. Credit: UN Photo/Mark Garten

By Antonio Guterres
UNITED NATIONS, Aug 4 2022 – The war in Ukraine continues to have a devastating impact on the people of that country. Civilians are dying in the most tragic circumstances every day. Millions of lives have been destroyed or put on hold.

This war is senseless, and we must all do everything in our power to bring it to an end through a negotiated solution in line with the UN Charter and international law.

We are doing all we can to reduce suffering and save lives in Ukraine and the region, through our humanitarian operations. And Martin Griffiths will be able to soon brief you on those developments.

But the war is also having a huge and multi-dimensional impact far beyond Ukraine, through a threefold crisis of access to food, energy and finance.

Household budgets everywhere are feeling the pinch from high food, transport and energy prices, fueled by climate breakdown and war.

This threatens a starvation crisis for the poorest households, and severe cutbacks for those on average incomes.

Many developing countries are drowning in debt, without access to finance, and struggling to recover from the COVID-19 pandemic and could go over the brink.

We are already seeing the warning signs of a wave of economic, social and political upheaval that would leave no country untouched.

That is the reason why I set up the Global Crisis Response Group: to find coordinated global solutions to this triple crisis, recognizing its three elements – food, energy and finance – that are deeply interconnected.

The GCRG has presented detailed recommendations on food and finance. I believe we are making some progress, namely on food.

Today’s report looks at the energy crisis, with a wide array of recommendations.

Simply put, it aims to achieve the energy equivalent of the Black Sea Grain Initiative, by managing this energy crisis while safeguarding the Paris Agreement and our climate goals.

I would like to highlight four of the recommendations of the report.

First, it is immoral for oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities and at a massive cost to the climate.

The combined profits of the largest energy companies in the first quarter of this year are close to $100 billion.

I urge all governments to tax these excessive profits and use the funds to support the most vulnerable people through these difficult times.

And 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.

Second, all countries – and especially developed countries – must manage energy demand. Conserving energy, promoting public transport and nature-based solutions are essential components of that.

Third, we need to accelerate the transition to renewables, which in most cases are cheaper than fossil fuels.

Earlier this year, I outlined a 5-point plan to spark the renewables revolution.

Storage technologies including batteries should become public goods.

Governments must scale up and diversify supply chains for raw materials and renewable energy technologies.

They should eliminate red tape around the energy transition, and shift fossil fuel subsidies to support vulnerable households and boost renewable energy investments.

Governments must support the people, communities and sectors most affected, with social protection schemes and alternative jobs and livelihoods.

Fourth, private and multilateral finance for the green energy transition must be scaled up.

Renewable energy investments need to increase by factor of seven to meet the net zero goal, according to the International Energy Agency.

Multilateral development banks need to take more risks, help countries set up the right regulatory frameworks and modernize their power grids, and mobilize private finance at scale.

I urge shareholders in those banks to exercise their rights and make sure they are fit for purpose.

Today’s report expands on these ideas, and Rebeca Grynspan will elaborate on them in a moment.

Every country is part of this energy crisis, and all countries are paying attention to what others are doing. There is no place for hypocrisy.

Developing countries don’t lack reasons to invest in renewables. Many of them are living with the severe impacts of the climate crisis, including storms, wildfires, floods and droughts.

What they lack are concrete, workable options. Meanwhile, developed countries are urging them to invest in renewables, without providing enough social, technical or financial support.

And some of those same developed countries are introducing universal subsidies at gas stations, while others are reopening coal plants. It is difficult to justify such steps even on a temporary basis.

If they are pursued, such policies must be strictly time-bound and targeted, to ease the burden on the energy-poor and the most vulnerable, during the fastest possible transition to renewables.

Footnote: Launching the third brief of the Global Crisis Response Group on Food, Energy and Finance, UN Secretary-General Antonio Guterres thanked the GCRG Task Team, coordinated by Rebeca Grynspan, and the Energy Workstream, for making this report possible.

IPS UN Bureau

 


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Excerpt:

Antonio Guterres, Secretary-General of the United Nations, in his address to the UN press corps while launching the third brief by the Global Crisis Response Group on Energy.

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