We need a new plan to tackle the climate crisis – one that’s bold, fair and fully funded. That’s what Friends of the Earth is calling for through our Big Climate Plan campaign.
But where will the money for climate action come from? And how can we make sure that the costs don’t fall on those least able to pay?
Our solution is to tax polluting fossil fuel companies and the wealthiest individuals. Not only are they most responsible for the climate crisis, but they’re also the most able to contribute.
Read on to learn about polluter pays taxes and how they can fund climate action.
What are polluter pays taxes?
The “polluter pays” principle is the idea that those most responsible for emissions and pollution should pay the most towards tackling them.
Polluter pays taxes are levies on polluting activities and companies. Some already exist, like Vehicle Excise Duty on polluting vehicles and the Energy Profits Levy on oil and gas companies. Alongside companies, the richest individuals tend to pollute the most. So another option is wealth taxes on their assets and investments.
Polluter pays and wealth taxes can help discourage polluting behaviour, but they can also be used to fund solutions. Yet the UK government isn’t using them for climate action.
Those fuelling the climate crisis should pay for climate action
Make polluters payHow can polluters fund climate action?
How can polluters fund climate action?
Why should polluters pay?
We believe fossil fuel companies and the wealthiest individuals should pay more for climate action. They’re much more responsible for emissions than ordinary people and they can afford higher taxes.
Fossil fuel companies like Shell, BP and Total are among the biggest global emitters and they make enormous profits. In 2021 for example, Shell UK made £2.7 billion and TotalEnergies UK made £4.8 billion.
The richest 1% of the world’s population are responsible for as many emissions as two-thirds of humanity. And the financial investments of the wealthiest individuals contribute even more to climate emissions than their personal consumption.
Won’t polluter pays taxes cost ordinary people?
A minority of levies on polluting activities – such as high-emission vehicles – may impact normal people. But the vast majority of costs shouldn’t as long as these taxes are done fairly.
For example, flying taxes should focus on frequent flyers, not on those who fly only occasionally. A “first-flight” discount for all UK residents would protect the annual family holiday and lower income households from price rises.
Taxes on polluting activities can also be used to support people financially. For example, the money raised from taxing polluting vehicles could help make electric vehicles more affordable or improve public transport.
Those fuelling the climate crisis should pay for climate action
Make polluters payWhat about global action?
As well as funding solutions here, polluter pays and wealth taxes should be used to increase the UK’s contribution to global climate action. Historically, the UK is one of the biggest emitters, so we have a responsibility to do our fair share.
What’s more, as the 6th richest country, the UK needs to support low-income countries experiencing the worst impacts of the climate crisis – especially as they’ve done the least to cause it.
We’re calling for the government to increase international climate finance from £2.3 billion to £9.4 billion a year.
