Guterres calls record fossil fuel profits ‘immoral’ in a world of energy crisis

The UN chief is also being called a “windfall tax” to fund fair policies and sustainable energy solutions, echoing the latest note from the Global Crises Response Group (GCRG).

This group was created in March 2022 to organize in the face of crises in the food, energy and financial sectors caused by the war in Ukraine and the Covid-19 pandemic.

“As the war in Ukraine continues to rage, soaring energy prices are compounding an existential crisis in the cost of living for hundreds of millions of people,” the Panel warned.

Or “despite this alarming situation, the major oil and gas companies have recently declared record profits”, the Secretary General was alarmed, before describing the situation as “immoral”.

The combined profits of the biggest energy companies in the first quarter of this year are close to “100 billion dollars”, he claimed, urging governments to tax these “excessive” profits and use the funds raised to support companies. most vulnerable people “in these difficult times”.

Call to leverage windfall taxes on big oil and gas companies

The Panel’s note, the third published since its inception, recommends that governments find the most effective ways to finance energy solutions, such as cash transfers, as well as state-funded policies to reduce utility bills. energy, to protect vulnerable communities. It is also suggested to levy “one-off taxes on the biggest oil and gas companies”.

At the same time, the report calls for a transition to renewable energy.

The document follows the historic agreement signed, the Black Sea Grain Initiative – concluded last month between Russia, Türkiye and Ukraine, under the auspices of the United Nations – paving the way for the first shipment of cereals from Ukraine, which left the port of Odessa on August 1 in the direction of Lebanon.

Major setbacks in energy access

The Secretary-General also raised concerns that rising energy costs are excluding many developing countries from energy markets, especially the most vulnerable communities. Or “this progress is already bearing the brunt of the cost of living crisis” and “has experienced major setbacks in energy access and sustainability since the Covid-19 pandemic”, remarked Mr. Guterres.

“More worrying still, we could witness a rush for fuel”, worried the head of the UN: the report of the Group fears indeed a spiral of auctions where only the countries with the highest prices could have access to energy.

“Governments therefore need fiscal space to support their most vulnerable populations to avoid worsening energy poverty levels or even losing access to energy altogether,” the Secretary-General recommended. .

PAM/Josh Estey

An endless queue outside a gas station in Sri Lanka. The country, whose economy has collapsed, faces a chronic and exceptional shortage of fuel.

Developing countries at a crossroads

In addition, in the absence of balanced policies between urgency and sustainability, the adoption of short-term energy policies could lead developing countries down a mediocre and carbon-intensive path, he also worried, recalling countries their commitments made under the Paris Agreement on climate change.

“Developing countries have plenty of reasons to invest in renewable energies”, argued the Secretary General. Many of them are already suffering the severe consequences of the climate crisis such as storms, floods and droughts. What these countries lack are concrete and achievable options,” Guterres added.

Energy resilience

The war in Ukraine and the resulting global energy crisis are stark reminders of the need to develop energy resilience and make the transition to renewable energy, according to the Group.

The latter also recalls that any policy and short-term protection measure should contribute to mitigating the crisis, including efforts to promote energy efficiency and demand reduction, “and not to exacerbate it”, by subsidizing the use of fossil fuels.

In the medium to long term, the world needs to redouble its efforts on renewable energy to achieve zero emissions goals, fight energy poverty, as well as “strengthen and diversify the global energy mix”, according to the Group’s note. . To this end, the document stresses the need to significantly increase global investment in this area.

In the Chadian countryside, a villager listens to a radio powered by a photovoltaic panel.

© UNICEF/Frank Dejongh

In the Chadian countryside, a villager listens to a radio powered by a photovoltaic panel.

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