THE PHILIPPINES needs to support a tax on fossil fuel producers to help fund the mitigation of climate change impacts in vulnerable countries, Greenpeace said on Tuesday.
“It is in the best interest for the country to advocate for and champion accountability mechanisms that make those most responsible pay for the losses and damages from climate impacts,” Greenpeace campaigner Jefferson Chua said at a briefing.
The tax would be imposed in countries hosting major fossil fuel producers, Mr. Chua said.
“We all know that OECD (Organisation for Economic Co-operation and Development) and G7 (Group of Seven) countries are historically responsible for the acceleration of climate impacts around the world,” he said. “At the same time, countries like ours are lagging in terms of development (relative to) these other countries.”
According to a report by Greenpeace and several other organizations, a climate damages tax (CDT) “addresses the injustice of climate devastation impacting populations around the world who did not cause the climate change but are left to pay for it without the means to do so.”
“On the side of the Philippines, we really need enabling policies here that will facilitate that fund transfer,” Mr. Chua told reporters on the sidelines of the briefing.
A proposed CDT seeks to collect a fee for each ton of coal, barrel of oil or cubic liter of gas extracted by fossil fuel producers, based on a formula that determines the fuels’ carbon dioxide equivalent (CO2e).
The report proposes an initial rate of $5 per ton of CO2e, increasing each year.
A portion of the climate damages tax will go to the Loss and Damage Fund (LDF), while the other half would be remitted as domestic dividends to fund the just transition systems in affected countries.
“We propose that the tax receipt does more than boost government income for allocation to the LDF, but also offers a domestic dividend that can be spent on climate action nationally, helping to pay for workers to transition away from fossil fuels, towards green energy and transport,” according to the report.
Rosa T. Perez, independent climate change specialist fellow at the Manila Observatory and the National Resilience Council, said a climate damages tax could fund measures to address climate-related events like drought.
The tax would be imposed more on fossil fuel producers, compared to a carbon tax, which seeks a general pricing scheme on carbon emissions, she said.
The Loss and Damage Fund was operationalized under the 28th United Nations Climate Change Conference (COP28) in Dubai last year.
The Philippines secured a seat on the Loss and Damage Fund Board for the 2024-2026 period.
However, only $700 million has been committed to the Loss and Damage Fund, or 0.2% of the actual amount necessary to address climate damage globally, Mr. Chua said.
Despite this, the world’s biggest fossil fuel companies generated more than $100 billion in profits last year, Greenpeace said.
“Like other taxes, this has advantages and disadvantages, so we need safeguards against its negative impacts… especially on vulnerable people,” Ms. Perez said.
If implemented this year, the CDT is expected to generate $216.2 billion in global revenue, according to the report. OECD and G7 countries may contribute tax revenue of up to P55.8 billion and P41.9 billion, respectively.
“If President Marcos is sincere with his pronouncement in being a climate leader worldwide, he will need to heed the clamor of communities who are standing up to carbon makers,” Mr. Chua said. — Beatriz Marie D. Cruz