According to the new Climate Damages Tax report, introducing a fossil fuel tax on companies in the richest countries in the world could generate hundreds of billions to aid the most vulnerable nations in coping with the climate crisis.

The impacts of climate change disproportionately affect poorer nations that have contributed to it the least.

“Climate change is a war. A category five hurricane releases energy equivalent to 10,000 times the nuclear bomb dropped on Hiroshima in 1945. Those countries on the path of hurricanes and cyclones and submerging coasts are on the front line,” wrote Avinash Persaud, special envoy on investment and finances to the prime minister of Barbados, in the preface to the report. “Climate change is not a freak of nature. It is human-made, as human-made as power and greed. If the consequences of climate change were felt disproportionately by those who have contributed to it, it would have stopped long ago.”

The report calculated that a new extraction tax on the biggest fossil fuel companies — those based in countries belonging to the Organisation for Economic Co-operation and Development (OECD) — could create $720 billion for vulnerable countries’ loss and damage fund by 2030, reported The Guardian.

Co-author David Hillman, director of Stamp Out Poverty, said the report “demonstrates that the richest, most economically powerful countries, with the greatest historical responsibility for climate change, need look no further than their fossil fuel industries to collect tens of billions a year in extra income by taxing them far more rigorously. This is surely the fairest way to boost revenues for the loss and damage fund to ensure that it is sufficiently financed as to be fit for purpose,” The Guardian reported.

The authors of the report said the levy could be imposed using existing tax systems. They added that introducing the tax in OECD countries this year at a starting rate of $5 per metric ton of carbon dioxide equivalent and increasing it by $5 per tonne annually would generate $900 billion by the end of the decade.

The $180 billion not being put toward loss and damage would be set aside as a “domestic dividend” to provide support for a just climate transition in communities of richer countries.

“We need concerted global leadership to force the fossil fuel industry to stop drilling and start paying for the damage they are causing around the world. A climate damages tax would be a powerful tool to help achieve both aims: unlocking hundreds of billions of funding for those at the sharp end of the climate crisis while helping accelerate a rapid and just transition away from fossil fuels around the world,” said Greenpeace UK’s joint director Areeba Hamid.

From extreme temperatures in excess of the 1.5 degrees Celsius threshold to devastating drought and wildfires, the planet is seeing the impacts of the climate crisis in ever-increasing severity.

Publication of the report comes as the board of the loss and damage fund holds its first-ever meeting in Abu Dhabi to discuss how it will be financed, reported The Guardian.

The report said if the climate damages tax was only introduced in G7 nations — home to a large number of global oil and gas companies — it could raise $540 billion by 2030, with $135 billion in domestic climate funds for G7 countries.

“We will only stop climate change by making those who contribute to it, pay for it. More talk, more conferences, more insurance where the victims are asked to pay by installment, will not do the job. We need to end the mismatch between those who gain and those who lose. This is what an international community serious about halting climate change must do,” Persaud wrote. “We cannot afford to wait.”

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