Drilling for innovative finance: carbon prices that mean more than false solutions

8 June 2015

Dear big fossil fuel companies,

We hear that some of you have had an epiphany and have written to governments and the UN, calling for a strong carbon price. Well, it’s your lucky day! All the way from the UNFCCC to your board rooms, there is a proposal that will no doubt prick up your ears. A global fossil fuel extraction levy (also known as a Carbon Majors Levy) would be an effective way to implement a carbon price. If it were implemented at the low, low price of $2 per tonne of CO2e, it would raise roughly $50bn each year. Obviously, such a low price would have to increase each year, as you will no doubt agree that we need to phase out fossil fuels, while climate finance needs are clearly only going to increase.

Given your call for a carbon price, dear fossil fuel companies, ECO is certain that you would agree that such a fossil fuel extraction levy should apply to each tonne of coal, barrel of oil and cubic meter of natural gas. After all, the pollution emitted from these fossil fuels is causing climate change, and that means you’re profiting from causing climate damage. ECO can only imagine that your call for a carbon price has altruistic motives-not some sugar coated agenda to keep business as usual (take note, gas proponents!). Surely, it’s your sincere wish to meet the “polluter pays” principle and reverse the unfairness of forcing the poor to pay for climate damage. And, surely, you would never use poor countries’ need for energy and their right to develop to justify “false carbon price” solutions to the climate crisis that really just mean more profit for you at their expense. Surely…

Now, dear UNFCCC delegates, if you’re afraid that this idea is just too groundbreaking and you doubt the altruistic motives of the fossil fuel industry, you needn’t worry. In establishing a global fossil fuel extraction levy, you’d just be following the lead of others. It’s the source of finance for the International Oil Pollution Compensation Funds, which provide compensation for pollution damage resulting from spills from oil tankers. And really, based on recent correspondence from the fossil fuel industry, ECO is sure these companies will welcome the idea of the global fossil fuel extraction levy with open arms.

Drilling for innovative finance: carbon prices that mean more than false solutions

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