The Carbon Levy Project

More than two thirds of anthropogenic GHG emissions are caused by only 90 companies. These oil, coal and gas companies are reaping exorbitant profits and are getting huge government subsidies. It’s time to make them pay a levy for the loss and damage they cause. A proposal from the Climate Justice Programme (CJP).

What is loss and damage?

Loss and damage refers to those adverse effects of climate change (damage or loss) that exceed people’s capacity to cope with and adapt to climate change. Loss and damage includes: → Extreme weather events: weather-related natural disasters; → Gradual developments: rising sea levels, rising temperatures, ocean acidification, glacial retreat and similar processes, salinization, degradation of soil and forests, loss of biodiversity, and drought and desertification.

The cost of loss and damage

Even assuming rigorous mitigation efforts and the implementation of climate change adaptation measures, the residual damages occurring between the years 2000 and 2200 are estimated to incur 275 trillion US dollars for all countries together. For Africa alone, the damages at a warming below the 2°C threshold are estimated at 100 billion US dollars annually by the year 2050, and at 200 billion annually by 2040 if warming exceeds 4°C.

Who are the big oil, coal and gas companies?

A groundbreaking report by Richard Heede from 2013 showed that two thirds of global CO2 emissions since the onset of the Industrial Revolution can be attributed to 90 major oil, coal and gas producers (Carbon Majors study). These corporations include Chevron, ExxonMobil, Saudi Aramco, BP, Gazprom, Shell and also RWE.

Subsidies and profits of big oil, coal and gas companies

The big oil, coal and gas companies receive outrageous subsidies and have reaped enormous profits from the sale of fossil fuels, knowing full well that their products are exacerbating climate change. The organization Taxpayers for Common Sense estimates that the five largest oil and gas companies together made more than 1 trillion US dollars in profit between 2000 and 2012. A recent study by the International Monetary Fund (IMF) shows that, worldwide, the subsidies given to the energy sector in the year 2015 amounted to 5.3 trillion US dollars.


The big oil, coal and gas producers should finance the loss and damage mechanism. We propose that a worldwide levy be charged to finance the dismantling of fossil fuel, to be paid into an international loss and damages mechanism. That levy should be used to help the poorest and most vulnerable communities to cope with the worst climate change impacts. The levy for the dismantling of the fossil fuel infrastructure must be part of a bigger project working toward the complete departure from this source of energy. As it is, funding for climate change mitigation is inadequate, with a huge gap between what is actually needed and what is provided. This new source of funding from the big oil, coal and gas companies could help thwart objections raised by the rich countries to include the issue of loss and damage in the upcoming Paris Agreement.

Consideration of climate justice

The levy would be collected globally. However, countries with less accountability and economic capacity would be eligible to temporarily use the levy instead to combat climate change in their own country.

Legal models

Existing international law, in particular the polluter pays principle and the right to damages support our proposed system. Our recommendation is based on models and forerunners such as the IOPC (International Oil Pollution Compensation Fund), which provides compensation for damages resulting from oil spills, funded by contributions from corporations active in oil transport.