The fossil fuel ‘superprofits’ that could fund climate action

More than one trillion dollars in ‘superprofits’ from fossil fuel companies should be used to fund climate change mitigation efforts in the majority world, energy experts say.

According to research published in Climate Policy this month, 93 of the world’s biggest fossil fuel companies raked in a whopping $1,085 bn in 2022 — $450 bn more than projected for the year thanks to soaring energy prices following Russia’s invasion of Ukraine.

‘There is plenty of potential funding out there in the hands of the fossil fuel companies that helped create this [climate crisis],’ says Florian Egli of the Technical University of Munich and the lead author of the study. The total superprofits were split between government-controlled companies and private companies. Over half of the private superprofits ($143 billion) went to companies headquartered in the US, while a further 37 per cent ($103 billion) went to companies in the UK, France and Canada.

Egli and her team are advocating for these countries to incorporate a ‘superprofit tax’ into their climate policies at COP29 and the G20 Summit, which are taking place in Azerbaijan and Brazil respectively this week.

 ‘By doing that [taxing] you start to make fossil fuels less profitable and thereby accelerate the climate transition we badly need,’ co-author Michael Grubb told the BBC from Baku.  

In 2022, the US and the UK met their goal to provide $100 billion annually in climate finance to help vulnerable nations adapt to and mitigate the climate crisis. But experts say it’s not enough.

With president-elect Donald Trump likely to withdraw the US from environmental pledges, these global meetings could be the last opportunities to ensure corporations and countries pay for their pollution.

But as Nick Dowson wrote in New Internationalist’s Climate Capitalism issue earlier this year, ‘the jury is out on whether the global market economy is capable of the changes needed to prevent climate catastrophe. And even if it is, it won’t be a transition that works for people.’

— Anna Scott (@annadotscott)