National:
Climate damages fine for polluters

Implement and collect fines from corporations for polluting activities, such as fossil fuel extraction, to help justly and directly finance a shift off of polluting products. The cost of such a fine must not be placed upon people but rather be collected from corporations by governments and publicly governed to serve the people.

What does this look like?

The payment of the fine must not be used to permit or legitimize more pollution to take place, or create dependence on continued pollution as a source of income. Therefore implementation of climate damages fines must be in accordance with the guidelines detailed below.

• Establish a national climate damages fine for every unit that polluting corporations pollute or extract.

• Corporations must be legally barred from passing on the cost of the fine to consumers, and they must demonstrate that the payments are coming directly from their net revenues or profits.

• A climate damages fine should incentivize a reorientation by the polluting and power-producing industries away from fossil fuels or other polluting products by reducing the profits they derive from that activity. This also would make them a less attractive investment option.

• The fine should only be one option utilized by governments in a suite of complementary financial measures, including others such as the removal of subsidies for fossil fuel or agrochemicals, to make polluting industry business increasingly non-viable.

• In the same spirit, the use of climate damages fines should reinforce, not replace, a government’s responsibility to mobilize and allocate public finance to address climate change and the subsequent needs of communities. Any governments utilizing such a fine must do so alongside safeguards that ensure the resources raised will serve communities and be protected against corruption.

• The design of the fine should ensure that it escalates annually, and upon repeated occurrences, making polluting industries’ business increasingly unprofitable year on year and raising billions of dollars annually to address climate impacts while contributing to a phase out of the product (such as fossil fuels) by mid-century.[1]

• It must be a fine at source (e.g., for fossil fuel corporations a fine on extraction or for agribusiness at the start of the food supply chain) with the cost borne directly by the corporations, not the country where the activity is taking place.

• Implementation of the fine must include reporting transparently on what is being paid and to whom, making it more difficult for polluters to lobby policymakers and enforcers for preferential rules and prices.

• Finance received through the collection of such a fine should:

  • Be used only to serve the public interest by addressing climate impacts or funding a just transition. The latter could include activities such as to fund decentralized, community-led renewable energy solutions as well as decentralized food systems, including local farms, that ensure care and restoration of land.

  • In no way be used to directly or indirectly promote fossil fuel or other polluting activities.

  • Directly contribute to the international financing facility for loss and damage and go directly to communities to address climate impacts. Wealthy, industrialized countries should contribute significantly more (at least 50%) of resources gathered through climate damages fines. Similarly, the bulk of resources raised through these fines in lower-income countries enduring the greatest impacts of climate change should go directly to support impacted communities in-country, on a sliding scale basis.