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Taxing polluters for a fairer, greener society: our new policy platform

Tax Justice UK, Oxfam GB and Global Witness have developed a policy platform ‘Taxing Polluters: for a fairer, greener society’, supported by over 35 civil society organisations and networks from across the climate, new economy and development movements.

The breadth and range of signatories demonstrates that there is strong support for the ‘polluter pays’ approach to tackling the climate crisis. It also highlights that the most urgent challenges facing our communities are connected and therefore our response must be too. This platform is designed to provide a set of shared goals for civil society organisations to come together behind, and a tool to support strategic, effective advocacy and campaigning.

Our platform outlines a suite of workable, evidence-based policy options the Government could take to ensure those most responsible for climate breakdown pay their fair share in tackling the climate and cost-of-living crises facing our society. These measures would raise billions in vital revenue to support communities grappling with climate disasters at home and globally, breathe life into our public services and improve living standards.

Read the full briefing and see the signatories here.

The climate crisis is a cost of living crisis

Climate change is currently costing each UK household £3,000 per year, according to analysis by Global Witness. The costs of flooding, global crop losses, rising insurance bills and more, mean that the high costs of essentials are here to stay if action isn’t taken. This relentless snowballing of prices and costs hits low income families hardest, and yet they are the least responsible for the pollution causing climate breakdown.

Polluting companies – and the extremely wealthy people who have benefited from them – have actively and knowingly caused the damage that has led to these costs, while being given free rein to continue raking in billions in profit.

Taxing polluters would help improve living standards for ordinary people, provide support for communities worst hit by extreme weather, and incentivise the rapid adoption of cheap, secure, clean energy technologies. Making the biggest polluters pay for the damage they’ve caused – from the fossil fuel industry to the super wealthy – would not only raise billions, but is very popular with the British public and even millionaires themselves.

The UK has the sixth largest economy in the world, where highly profitable, polluting industries and the ultra-wealthy are well placed to contribute more. Instead of cutting support from the most marginalised, the Government must stay true to the Prime Minister’s commitment that those with the broadest shoulders should contribute most.

Who are ‘the polluters’?

Big international oil companies

Are costing communities trillions. Carbon emissions from the world’s biggest 25 oil companies caused an estimated £15tn worth of economic damage globally from 1985 to 2018.

Can afford to pay. From UK production alone, international oil firms made £5bn in profits each year for the last 30 years, on average.

Can’t deliver growth for Britain. Since 2015, the fossil fuel industry has cut nearly 30% of its workforce, despite low taxes, generous subsidies, and hundreds of new licences. Renewable energy production, on the other hand, has seen significant growth, and over the same period has increased the number of people it employs by 32%.

Ultra-wealthy individuals and organisations

Are central drivers of climate change. Super-rich individuals and corporations are driving the climate crisis through excessive consumption, extraction and damage, and harmful investment choices. The 50 wealthiest billionaires produced more carbon last year in just three hours than the average Brit does in an entire lifetime, according to Oxfam.

Are getting richer, while inequality soars. In 2024 alone, global billionaire wealth surged by £2 trillion – three times faster than the year before – further concentrating wealth and worsening inequalities within countries and between the Global North and South.

Benefit from the UK’s tax system. The UK has one of the most unequal tax systems globally. It favours the super-rich with unfair loopholes and places lower taxes on income from wealth than from work, fuelling inequality.

Private jets and ultra-frequent flyers

Are a major driver of climate inequality. Private jets produce up to 14 times more carbon per passenger than commercial flights and in 2022, the UK had the highest number of private flights, and pollution from private jets than any country in Europe.

Are undertaxed compared to other modes of transport. The aviation industry benefits from generous tax arrangements, which makes flying artificially cheap while increasing emissions which fuel the climate emergency.

Cannot align with climate goals without demand reduction. Meeting climate targets will require significantly reducing demand for flights in a way that is fair and equitable, including through progressive aviation tax reforms which target private jet use and ultra-frequent flyers.

Why do we need climate taxation?

We have set out a suite of revenue-raising measures that place levies on the biggest polluters, ensuring they contribute their fair share. These measures must:

Support a fully just transition that reduces inequalities, ensures no one is left behind, and advances shared prosperity for all communities, including workers in polluting industries and households on low-incomes.
Increase the UK’s contribution to international climate finance to better reflect our global responsibility.
Disincentivise further investment in volatile, expensive oil and gas and deliver cheap, secure renewable energy.
Strengthen public services to improve living standards, reduce inequality and strengthen our response to crises.

Policy options

Big oil and gas companies

Introduce a permanent excess profits mechanism on top of baseline tax of North Sea oil and gas companies. Instead of a cycle of raising and cutting headline tax rates, the UK must introduce a permanent mechanism that captures all excess profits, including windfalls, and close all loopholes which encourage further investment in oil and gas.

Add a tax on shareholding in fossil fuel companies. Levies on capital gains, dividend payments and transactions of polluting assets would disincentivise investment in fossil fuels, drive progress towards the UK becoming a Clean Energy Superpower, and redistribute wealth from super-rich shareholders to workers and UK households.

Establish a Climate Damages Tax to raise £20 billion over 10 years. A ratcheting extraction levy on oil and gas production would enable a managed transition away from North Sea oil and gas while generating crucial funds for climate damage response and worker transition programmes.

Remove and redirect subsidies for North Sea oil and gas companies to raise £2.2bn a year. The Exchequer is still directly subsidising fossil fuel companies via tax relief for exploration and new fields, decommissioning relief deeds, and Research & Development tax relief on extraction tech. Ending these handouts would have saved UK taxpayers £2.2 billion in 2022 alone.

Taxing the super-rich

Tax wealth as much as work. National Insurance is currently levied against income from work, but not earnings from investments like dividends and rental income. This nonsensical situation means that landlords – currently earning outsized profits during a housing crisis – often pay a lower tax rate than tenants whose only source of income is their job. Ending this disparity could raise an estimated £10.2 billion a year while also simplifying the tax system by ensuring that all forms of income, whether from work or wealth, are taxed at the same rate.

Reform Capital Gains Tax, one of the most economically inefficient and unfair taxes in the UK. Comprehensive updates that close loopholes, equalise with income tax, and protect legitimate investments could generate £12 billion annually, while also accelerating economic growth – all while receiving broad cross-party support.

Introduce a 4% tax on share buybacks. UK firms are currently buying back shares at a faster rate than even their US counterparts, often to avoid paying taxes. A 4% levy on share buybacks could raise between £0.1 and £2 billion during this year alone, while incentivising real investment in productive enterprise rather than shareholder profiteering.

Implement a 2% tax on assets over £10 million. An asset tax on the 20,000 or so UK residents worth more than £10 million has strong and growing support across the political spectrum, from the unions to the FT, as well as nearly two-thirds of UK millionaires themselves. And it would raise some £24 billion per year, in a progressive, efficient and easily-implemented manner.

Properly tax private jets and frequent fliers

Private jet usage is surging, with the UK having more private flights than any other European country, now accounting for one in ten departures from UK airports. Yet aviation, including private aviation, is exempt from fuel duty and VAT. Ending what are effectively subsidies to the super-rich to fly more could raise £1.2 billion a year, while reducing demand for this high polluting and deeply unnecessary mode of travel.

International leadership on tax and climate

Support the UN Tax Convention (UNTC) to Strengthen Global Tax Cooperation. The UN is currently negotiating a UN Tax Convention (UNTC) – a new intergovernmental framework that has the potential to develop major tax reforms, which could help advance international climate goals and drastically increase governments’ tax revenue raising power.

Join the Coalition for Solidarity Levies ahead of COP30. The Global Solidarity Levies Taskforce is exploring levies on polluters to scale up urgently needed climate and development finance. By joining the Coalition, the UK can accelerate progress on climate finance and repair its claim to climate and global leadership, which has been significantly damaged by its recent decision to cut development spending to historically low levels.