Carbon majors funding loss and damagae

Carbon majors funding loss and damagae

Discussion paper proposing levies be placed on those entities most responsible for emissions, to fund the Warsaw International Loss and Damage Mechanism.

As the impacts of climate change continue to worsen, many of those who will be most impacted will have done the least in terms of contributing to the emissions rise responsible for the changing climate. Whether it is those suffering droughts in the Sahel region of Africa, or the poor in Bangladesh at risk of rising sea-levels and more severe storms, people are already suffering loss and damage, and can expect worse to come. This paper, published by Heinrich Boll Stiftung, examines the issue of how to manage and compensate loss and damage caused by climate change in an equitable and adequate way, one consistent with United Nations Framework Convention on Climate Change (UNFCCC) principles such as ‘polluter pays’, and of transboundary harm. The proposed approach is to strengthen the presently inadequately-funded proposal agreed by the UNFCCC in 2013 - to establish the Warsaw International Mechanism for Loss and Damage - to give the mechanism the realistic levels of funding it requires. This can be achieved by imposing a levy on those entities who have both emitted the most greenhouse gas emissions, and profited from their extraction and use. To achieve this, the authors recommend building upon a ground-breaking report released in 2013, the Carbon Majors report, which established that 63% of carbon emissions in the atmosphere came from the coal, oil, and gas extracted, and cement manufactured, by only 90 entities (the “Carbon Majors”), including Chevron, ExxonMobil, Saudi Aramco, BP, Gazprom, and Shell. In this way, the approach is informed by precedents in other fields, namely the oil spill compensation regime, the nuclear damage regime, and the biosafety regime. The idea is that the carbon majors will pay a one-off levy according to their historical emissions, followed by an ongoing levy determined by fossil fuel usage. This proposal has many advantages, including: providing a new and predictable source of finance for the most vulnerable countries and communities; adding cost to the extraction and use of fossil fuels, and thereby discouraging their use; ensuring that the entities whose products are responsible for causing climate change – the big fossil fuel-extracting entities – meet the costs of loss and damage inflicted on the poorest and most vulnerable; and being consistent with international law, precedents from other areas, and compatible with existing national systems such as emissions trading schemes, levies, royalties, etc.

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