Make polluters pay

Chapter 4.2.2 Funding climate action

To ensure action to reduce emissions in Scotland delivers climate justice, it should be funded through UK and Scotland-level actions which embed the polluter pays principle while mitigating any potential regressive impacts.

International

UK Govt

Scottish Govt

Local Authorities

Emissions reduction

Behaviour change

As recommended in the 2022 SCCS Financing Climate Justice report, progressive use of general taxation should be the primary means to raise significant additional money to invest in climate action and reduce inequalities. This approach should reflect evidence showing that, on average, those with higher incomes and wealth have higher emissions. In 2023, Oxfam estimated that the wealthiest 1% of people in the UK each emitted 11 times the carbon emissions of someone in the poorest half of the population, and that their carbon footprint was six times the national average.

Separate analysis by Future Economy Scotland shows the average carbon footprint of the richest 5% of households in Scotland is 4.1 times greater than the poorest 5% of households. This analysis emphasises the disproportionate climate impact richer people have through their lifestyle choices, including through things like frequent flying.

Targeting higher incomes and wealth would not only be a means of making polluters pay but, given these individuals also have the greatest capacity to pay, it would also promote social justice while helping to combat economic inequality – a recent Oxfam report found that since 2020, the richest five men in the world have doubled their fortunes, while almost five billion people globally have become poorer. SCCS’s Financing Climate Justice report looked at wealth taxes as they might be applied in Scotland or the UK as a whole.

However, beyond raising finance through the progressive use of general taxation, wider fiscal measures to raise additional finance could also include taxation of high-polluting activities. Oxfam has modelled the potential impact of several such measures in the UK level, including:

an effective tax on excessive UK fossil fuel profits
redirecting UK fossil fuel producer subsidies
a frequent flyer levy
taxing high-carbon luxury goods, such as private jets

While action in these areas may be simplest, and most effective, at UK level, there are also opportunities to make progress using devolved powers in Scotland. For example, the devolution of Airport Departure Tax to Scotland could create opportunities to pilot a frequent flyer levy in Scotland, and/or to impose higher rates for private jets landing at Scottish airports. See the policy ‘Introduce a frequent flyer levy’ in the Transport chapter.

Of course, action to make polluters pay must particularly target those with the greatest responsibility for causing harm. For example, the five biggest fossil fuel companies are collectively responsible for 11.4% of global historic CO2 emissions. Despite this, the rules of the global economy have allowed these same companies to make $100 billion in profits in 2023, while many in the world – and particularly the Global South – faced increased chaos and devastation from the impacts of the climate emergency combined with a cost of living crisis.

In support of reparative climate justice and a partial atonement for this climate debt, the operations of fossil fuel corporations must be drastically reduced, while ‘climate justice taxes’ should be introduced on corporate profits, carbon emissions and financial transactions supporting fossil fuel companies.

While the Scottish Government’s own ability to tax the big polluters is very limited, it should call on the UK Government to do so, including directly and through international collaboration.

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