Sept. 25, 2023 — CarrZee: I’ve asked for more details: Gordon Brown, Britain’s former PM, proposes a climate settlement based on windfall profits gained by oil and natural gas producers; some petro states could pay a 3% levy on exports ($25 billion a year?); the rich petro states (eg US and UK I assume) only provide guarantees of as much as $100 billion (according to interview on BBC). Stay tuned.
Brown does not appear to clearly justify why he’s singling out some countries. See more analysis below these details. Brown’s opinion published by the Guardian newspaper on Monday: https://www.theguardian.com/commentisfree/2023/sep/25/we-need-trillions-of-dollars-to-fight-the-climate-crisis-this-is-my-plan-to-raise-it
Key bits from opinion linked above (I added emphasis):
Countries with triple AAA or double AA+ credit ratings can offer guarantees to multilateral development banks which, on the strength of those guarantees, can borrow on attractive terms from the financial markets. If some of the global windfall levy is used as collateral, Europe and North America could provide $25bn in guarantees which can be leveraged by the multilateral institutions four times over – thus creating $100bn of resources that could fund the exit from coal and expand solar and other renewables in sub-Saharan Africa. An even more ambitious offer – $100bn of guarantees – could create $400bn in fresh investment so that Africa can receive more than the meagre 3% of climate finance on offer.
[CarrZee: why the heck do “petro states” hand over real money yet rich countries (also petro states) merely offer guarantees where you don’t necessarily hand over anything?]
Once we add the money released by the ambitious Bridgetown Agenda(devised by the prime minister of Barbados, Mia Mottley) and the Summers-Singh plan (which would radically refinance the multilateral development banks), the total funding for development kickstarted by the global windfall levy could reach $1tn.
And with oil and gas profits remaining high not as an accident but because of a deliberate Opec Organisation decision to continue to restrict production, there is no reason why the levy should not be paid on an annual basis.
More CarrZee analysis (in square brackets):
Here are some other parts of Brown’s analysis, with my comments.
The windfall has given energy exporters, including the Gulf states and Norway, nearly $1tn of earnings from their foreign sales alone, and the failure to recycle a fraction of these gains to the world’s poorest countries is one of the great scandals of our times. [Why is Brown ignoring the US here, which is the biggest oil and natural gas producer? Why ignore Scotland’s blame and profits. Being Scottish, he should know better. Indeed — why doesn’t Brown address natural gas directly?]
It is this lottery-style bonanza, amassed by petrostates, that is the backdrop to the Cop28 climate summit in the United Arab Emirates.
[The US is the biggest petro state. Why isn’t it addressed directly by Brown hardly at all? What about China’s coal?]
[What about the US’s oil and natural gas?]
The summit will be chaired by Sultan Al Jaber, the head of the Abu Dhabi National Oil Company, which is one of the biggest beneficiaries of the windfall.
CarrZee: [Overall, I applaud Brown for coming up with a plan that might finally bring the world to a proper climate settlement. Yet it seems deeply flawed. The Paris climate deal remains unfinished 8 years later. Because Brown has been selective in his (apparently biased) plan and he seems to pick unfairly on only some petro countries for political expediency perhaps (?), I fear his intervention will stoke geopolitical tensions ahead of COP28. It could just be clumsy. I ask is this actually another attempt at predatory delay of global climate action by OECD nations? It seems a bit like propaganda. Not demonstrating the humility required from a Scot at this point, since his country got rich on fossil fuels. As a UN education envoy, Brown should have higher standards in relation to educating people worldwide on the need for urgent climate action and on the need to recognise where the blame for the climate crisis crisis rightly lies.]
BBC report: https://www.bbc.co.uk/news/uk-politics-66906395
Here are some details of Brown’s proposals according to the London Economic (see link and unedited snip):
States which banked “staggering” profits from the high price of oil last year should pay a global windfall levy to help poorer nations in the fight against climate change, former prime minister Gordon Brown has said.
Nations such as Saudi Arabia, the UAE, Qatar and Norway benefited from a “lottery-style bonanza” after their profits more than doubled in 2022 following the spike in the global oil price, the former Labour leader said.
Speaking ahead of the Cop28 summit in Dubai later this year, Mr Brown said a global windfall levy would help kick-start a wider agreement for a climate finance fund to support the global south this winter.
Mr Brown said: “Petro-states have recorded almost unimaginable profits from the rise in oil price in recent years.
“Pre-Covid, global oil and gas revenues were, according to the International Energy Association (IEA) running at 1.5 trillion dollars a year (£1.2 trillion) – in 2022, they soared to an unprecedented 4 trillion dollars (£3.3 trillion).
“To put these extraordinary figures into context, 4 trillion dollars is 20 times the entire global aid budget. It is an income so big that it exceeds the entire GDP of the United Kingdom.
“These producer states have done literally nothing to earn these extra profits. It represents one of the biggest-ever transfers of wealth from poor to rich nations.
“I am therefore calling on these states which have benefited so much to contribute to a new global windfall levy to help the fight against climate change.”
“Given that the high price of oil and gas has been the principal reason why an additional 141 million people have been pushed into extreme poverty, it is the very least they could do.”
Gordon Brown, the London Economic
(Adds commentary; earlier corrects to say sales instead of profits in headline)