Tackling climate crisis should be funded by general taxation, report says

The climate crisis is such a global emergency that measures to address it should be funded directly from general taxation, according to a new report.

The study from Stop Climate Chaos Scotland (SCCS) examines how the generation and use of public finance can do more to support the delivery of Scotland’s climate ambitions.

The report acknowledges the financial pressures created by the cost-of-living crisis and argues that actions to tackle it can and must complement those required to avert “even deeper climate chaos”.

It recommends measures including increasing income tax revenue to fund action on climate change and said that rises should fall mostly on higher and top-rate taxpayers.

Other recommendations include increasing windfall taxes on the fossil fuel industry and removing tax breaks and subsidies from the fossil fuel industry.

Mike Robinson, chairman of SCCS, said: “If we are serious about tackling the climate emergency, we must use our tax and spending powers to drive faster change, while increasing the finance available.

“This is clearly a tough time financially, but the climate emergency hasn’t gone away and if we don’t ensure we increase the funding spent on tackling it, we are taking a huge gamble with our future, and risk simply lurching from one short-term crisis to the next.

“All countries, particularly rich industrialised ones, like Scotland, share this challenge, and we must act sooner rather than later, and, crucially, there are profound benefits to the climate, society and all of us, if we get this right.”

The report states that the climate crisis is “of such a scale and urgency – a global emergency – that measures to address it should be funded directly from general taxation”.

It says that this should be complemented by specific environmental taxes primarily aimed at changing societal behaviours.

SCCS is calling on the Scottish Government to make an immediate and explicit commitment that it will identify new and additional sources of finance, using a polluter pays approach, and establish a short-life, independent working group to report to ministers on the ideas and principles in the report.

The report, titled Financing Climate Justice: Fiscal Measures For Climate Action In A Time Of Crisis, was written by the independent environmental consultant Dr Richard Dixon, a former director of Friends of the Earth Scotland and WWF Scotland.

He said: “We must raise the money needed by targeting polluters, incentivising them to cut their emissions, while also ensuring those revenues, as well as currently committed public finance, fully support Scotland’s climate ambitions.”

A Scottish Government spokesman said: “Scotland is determined to play its part as a good global citizen and we will consider this report from Stop Climate Chaos Scotland carefully. We agree that one of the injustices of climate change is that the people least responsible for the climate crisis are often the ones suffering its first, and worst, consequences.

“Recognition of this was one of the most important things to emerge at Cop26 in Glasgow, where we committed £2 million to address loss and damage from our Climate Justice Fund – a commitment that was followed by contributions of 1 million euro from the Wallonia government, 3 million dollars from philanthropies and a recent pledge from Denmark.

“We look forward to driving further ambition for practical action to address loss and damage through our conference in Edinburgh next month.

“At home, Scotland has legislated for some of the world’s most ambitious climate change targets and we will be a net zero nation by 2045.

“We are already more than halfway to net zero and continue to decarbonise faster than the UK average, leading the way in key delivery areas such as energy efficiency and tree planting.”

The Scottish Government will publish a draft updated Climate Change Plan next year, setting out policies to make further progress toward its 2045 net zero target.

The UK Government said that it keeps all taxes under review and that the Energy Profits Levy will raise £5 billion from the extraordinary profits oil and gas companies are seeing to help pay for support for millions of the most vulnerable households across the UK.

It said that there are already numerous generous incentives available to bolster investment in renewable energy, and also that by 2023 the UK Government is set to increase renewables capacity by 15%, supporting the UK’s commitment to reach net zero emissions by 2050.