Rich countries should impose windfall tax on fossil fuel profits, UN chief says

The head of the United Nations has said wealthier countries should impose windfall taxes on fossil fuel firms enjoying record profits in the face of economic and environmental crises.

Opening up the UN General Assembly in New York this week, Antonio Guterres said the industry was "feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns".

He added: "Today, I am calling on all developed economies to tax the windfall profits of fossil fuel companies.

"Those funds should be re-directed in two ways: to countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices."

The Secretary General argued that richer nations have a responsibility, pointing out that 80% of global greenhouse gas emissions are produced by the G20 nations.

The idea of windfall taxes has become popular in many countries not only for environmental reasons, but also because fuel firms are profiting while people are facing a worsening cost of living crisis.

Supporters of the tax say extra revenue brought in could be use to offset household's rising energy bills.

But Britain's new prime minister Liz Truss has said she's prepared to be unpopular by bringing in tax cuts she believes will help the economy grow, accepting they will disproportionately benefit the rich.

During a round of broadcast interviews on the 102nd-floor observatory of the Empire State Building, Ms Truss said: “In order to get that economic growth, Britain has to be competitive.

"If we put up taxes, if we have arbitrary taxes on energy companies, if we have high corporation tax, we’re not going to get that investment and growth…”

She insisted the cost to the taxpayer of her energy package, being paid for by borrowing rather than a windfall tax on the profits of energy and oil giants, is “not what has been projected”, with estimates as high as £150 billion. Ms Truss accepted the benefits would fall in favour of the rich – at least initially – but rejected claims of unfairness as she bet on growth trickling down to the rest of society. But as she was speaking, Joe Biden tweeted criticism of the type of economic policy she was advocating – a day ahead of their meeting at the United Nations summit in New York City. “I am sick and tired of trickle-down economics. It has never worked,” the US President said. While his criticism was surely for a domestic audience, it underlined the differences between the two leaders’ stances just as Ms Truss says she wants to foster closer ties with international allies.

Addressing world leaders today, Mr Guterres warned that nations are “gridlocked in colossal global dysfunction” and aren't ready or willing to tackle the challenges that threaten humanity's future.

“Our world is in peril — and paralyzed,” he said as he opened up the annual high-level meeting.

He made sure to emphasise that hope remained, but his remarks reflected a tense and worried world.

Mr Guterres cited the war in Ukraine and multiplying conflicts around the world, the climate emergency, the dire financial situation of developing countries and setbacks in U.N. goals for 2030 including an end to extreme poverty and quality education for all children. He also warned of what he called “a forest of red flags” around new technologies despite promising advances to heal diseases and connect people.

The UN chief said social media platforms are based on a model “that monetizes outrage, anger and negativity."

Artificial intelligence he said, “is compromising the integrity of information systems, the media, and indeed democracy itself."

'Some measures will be unpopular. There'll be vested interests that oppose them'

The world lacks even the beginning of “a global architecture” to deal with the ripples caused by these new technologies because of “geopolitical tensions," Mr Guterres added. Starting off with a note of hope, he showed a video of the first UN-chartered ship carrying grain from Ukraine to the Horn of Africa, where millions of people are on the edge of famine.

This was the result of the deal between Ukraine and Russia that the United Nations and Turkey helped broker. He stressed that cooperation and dialogue are the only path forward, warning that “no power or group alone can call the shots.” But Mr Guterres admitted this isn't easy, telling leaders: “The divergence between developed and developing countries, between North and South, between the privileged and the rest, is becoming more dangerous by the day.

“It is at the root of the geopolitical tensions and lack of trust that poison every area of global cooperation, from vaccines to sanctions to trade."