The Climate Damages Tax. A guide to what it is and how it works

Introduction

The 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. It looks to the fossil fuel industry - the burning of whose products are the root cause of the problem - who are currently making grotesque levels of profits in the hundreds of billions of dollars every year, to be held accountable for their actions. Most specifically, by being taxed considerably more to help pay for the skyrocketing bill for damages they have to date avoided.

The CDT is a fossil fuel extraction charge, levied on each tone of coal, barrel of oil or cubic litter of gas produced. It would generate billions in extra income, most especially from fossil-fuel producing States. We propose that this substantial additional revenue is allocated in two ways. Firstly, it can help, particularly OECD countries contribute finance to the Loss and Damage Fund (LDF), without unfairly costing their taxpayers. Secondly, it will generate a significant domestic dividend that can be channeled to climate action nationally, helping to pay for the necessary support for workers and communities to transition away from fossil fuels, towards green energy and transport.