Fossil fuel companies could be compelled to pay for climate damage under proposed United Nations tax rules, which may also impose a global wealth tax on the ultra-rich. Negotiations on the UN Framework Convention on International Tax Cooperation resume in New York on Monday, with many countries backing stronger measures to make polluters pay.
Developing nations, however, express concern that the current draft is too weak and lacks robust support from wealthy countries. Proposals for taxing fossil fuel profits have been diluted, and a global asset registry to help tax wealthy individuals has been removed. Jamaica's delegate, Marlene Nembhard Parker, stressed the urgency of linking tax rules to climate change, citing Hurricane Melissa's devastation that wiped out 40% of Jamaica's GDP overnight.
The treaty, first proposed by African countries in 2022, has progressed slowly. The US has withdrawn from talks, but other nations may proceed. Some rich countries argue tax matters should be handled by the OECD, not the UN. If adopted, the treaty could force fossil fuel producers to pay for damage and ensure the richest contribute more, as inequality grows—the wealthiest 0.001% hold three times more wealth than the poorer half of the global population.
Tax Justice Network's Sergio Chaparo Hernandez called the talks a test for crafting rules fit for the climate crisis. Civil society pushes for progressive environmental taxation, making polluters pay and reducing inequalities. Countries lose $492bn annually to tax havens, while oil and gas firms reap huge profits. A 20% surtax on the top 100 producers could have raised over $1tn since the 2015 Paris agreement, according to Eurodad and the Global Alliance for Tax Justice.
Tuvalu's UN representative Tapugao Falefou emphasised that responsibility lies with big polluters, as the fossil fuel industry and super-rich grow wealthier while vulnerable nations struggle. Countries can tax fossil fuel consumption, but only those hosting extractive industries can directly charge for exploitation.
