At COP29, Governments Should Turn to Big Oil for Climate Finance

On Day 4 of COP29 in Azerbaijan—a petrostate still heavily reliant on oil and gas—the spotlight is on climate finance, a central issue that has plagued previous climate summits. While the need for urgent global action is clearer than ever, funding remains a major sticking point. Developing nations, hit hardest by climate change, are demanding financial support to mitigate and adapt to its impacts. But despite pledges made years ago, the promised $100 billion annually in climate finance remains unmet.

Meanwhile, that number is rising. Today, the UN-backed, Independent High-Level Expert Group on Climate Finance published a new report confirming that $1.3 trillion a year needs to be injected into developing countries by the 2030s. The report also says that $6.5 trillion in investments are required annually by 2030 to achieve climate targets. Public funds for adaptation and resilience and private sources for clean energy can cover this–but richer countries have to pony up their share.

A significant solution to this shortfall is taxing the massive profits of oil companies. In recent years, companies like ExxonMobil, Shell, and Chevron have posted record profits, often in the tens of billions, while many developing countries face devastating climate disasters. These companies, which have long been shielded from the true costs of their carbon emissions, are in the best position to contribute to a global climate fund.

The idea of a windfall tax has gained momentum in response to these record profits. Several European countries, such as the United Kingdom and Italy, have already implemented temporary taxes on oil and gas companies, using the revenue to support vulnerable populations facing rising energy costs. Yet, these efforts remain isolated. A global movement designed to direct profits from fossil fuel companies into climate finance would be a powerful tool for addressing the financial gap in climate action.

While oil companies benefit from the fossil fuel status quo, it is the poorest nations—who contribute the least to global emissions—that bear the greatest burden from rising sea levels, extreme weather, and crop failures. Taxing oil majors would help finance renewable energy projects, resilience-building efforts, and disaster recovery in these vulnerable regions.

As economists call for funding to developing countries to adapt to and mitigate climate change at COP29, the Azeri presidency isn’t listening: instead, they are using the conference to do more deals and further its own extraction plans, even calling fossil fuels “a gift of God.” If COP29 is to make real progress, world leaders must follow the science and prioritize climate finance for a more just, sustainable future.