One of the biggest issues when it comes to the green transition is who pays for it. For, however much promise there is that renewables paying-off well in the long run, the road up ahead seems hard and expensive.
Someone, it’s clear, is going to have to pay. And what better way to drive this revolution than getting fully behind the polluter-pays principle?
We are, of course, all polluters. But some of us are bigger polluters than others. Indeed some of us are so prodigiously bigger polluters than others that it makes whatever the smaller folk do to reduce their footprint seem insignificant in the face of these giants.
A new Oxfam report, Payment Overdue, focuses on the polluter pays principle, and how targeting both rich, high-footprint individuals and energy companies that profit from pollution, could not only fund our own green transition, but help us to contribute to the green finance required for change in developing countries.
The mechanisms it proposes include a "permanent, excess profits tax" on fossil fuel producers; the redirecting of fossil fuel subsidies; a frequent flyer levy; taxes on "high-emitting luxury travel" like super-yachts and private jets.
“This report estimates," it says, "that had these four measures been in place last year, they could have raised £12.62bn in much-needed new finance for climate justice. A system that fairly taxes extreme wealth could have contributed up to a further £10.48 bn for climate action last year. Altogether we estimate that in 2022, the UK may have missed out on £23.1bn for climate action.”
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Oxfam gives an example of what the pay-off might mean for Scotland, noting that if the UK Government were to spend £5bn of these additional revenues on green public transport in England, this would mean an additional £371.39m for Scotland.
The polluter pays shouldn’t seem that radical. After all, the principle has long seemed a natural and fair answer, adopted by the Organisation for Economic Co-operation and Development (OECD) over 50 years ago. Both UK Government and Scottish Government have the polluter pays principle written into their environmental principles.
Yet, what’s striking is that the UK Government is repeatedly swerving delivering a full-blown polluter pays approach - and I am not merely referring here to the recent attempt to scrap housebuilder pollution rules, which was defeated in the House of Lords.
We can see an overall pattern here in which Rishi Sunak emerges as a “big polluter mustn’t pay too much” prime minister.
Mr Sunak, for instance, slashed aviation tax on domestic flights and rejected a new "frequent flyer levy" after, according to Open Democracy, lobbying by the airline industry.
The Oxfam Payment Overdue report quotes the New Economic Forum’s estimate that a progressive frequent flyer levy could raise up to £15bn in 2050. It estimates that in 2022, it could have raised around £4.09bn.
The report also makes the point that Scotland could introduce its own frequent flyer levy from Scottish airports, but notes that a UK Government frequent flyer levy would be more effective.
Then there are the private jets - of which Rishi Sunak is known to be fond, famously having done a round-trip private flight to Southampton and London, as well as a £108,000 there and back to COP27 in Egypt.
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A study earlier this year found the UK to be Europe’s worst private jet polluter. But are these polluters made to pay?
Not in any significant way. According to Oxfam’s report, chartering a private jet to fly from London to Glasgow, which “can cost upwards of £6,400,139" costs only £78 per person per (domestic) flight in terms of advanced passenger duty - "around 1% of the total cost of the charter flight.”
What Oxfam proposes instead is a "super-rate", at 10 times the current highest rate for domestic flights: £780.140. This, the report estimates, could result in additional revenues of £497.7 million.
The bigger issue, however, is the oil and gas industry itself - and the potential for getting this most significant of polluters to pay much more. It's possible to argue, of course, that Mr Sunak's Government has created a significant polluter payment in the recent windfall tax. But that levy was more about balancing out of cost-of-living crisis, than a polluter pays policy.
It also further undermined its anti-polluter credentials by allowing energy companies to offset the tax they pay against further investment in oil and gas, and earlier this year yhe UK Government announced that if oil and gas prices returned to historically normal levels it would be scrapped. The polluter, in other words, only pays when prices are sky-high, and not otherwise.
The UK is struggling. Scotland is struggling. How, from a cost of living crisis and a shrinking economy, can we fund this vital transition?
What’s key is that those who are polluting least - who are, at this time in history, often the poorest in society - are not being made to pay.
And also, surely, that the businesses that we grow, can't be the ones that pollute most?
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