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The Guardian: ‘Fund clean energy with oil tax’

Terry Macalister
Monday October 23, 2006

Oil companies should be subjected to a windfall tax to fund a transition to a sustainable energy system, according to a leading charity and thinktank report published today.

The UK must follow the lead of Norway and create an oil legacy fund to ensure the benefits of hydrocarbons are shared by future generations, the WWF and New Economics Foundation (NEF) argue. The call for a new tax comes days before BP and Shell unveil third-quarter profits expected to reach a combined $11bn (£5.8bn).

It also comes in the week that the Treasury is expected to publish the Stern review, which has been assessing the economic impact of climate change on the UK. “Britain has squandered its windfall of natural resources from North Sea oil and gas. Instead of prudently investing the ‘unearned income’ from nature to build a safe, clean and green energy supply for the nation, we face unnecessary shortages,” said Andrew Simms, NEF policy director and lead author of the report, Hooked on Oil: Breaking the Habit with a Windfall Tax.

He added: “Instead of oil companies profiteering from climate change and oil depletion, a windfall tax could establish an oil legacy fund to pay for Britain’s urgent transition to a sustainable, decentralised energy system.”

Norway established a special oil legacy fund in the late 1990s and it is now worth £112bn – £25,000 for each man, woman and child. The NEF says windfall taxes are being used elsewhere, with the Chinese recently introducing such measures.

There have been calls from politicians for new taxes on oil companies but this has just been a reaction to massive profits and not tied to investment in renewables.

James Leaton, WWF oil policy officer, said government revenues had not been spent wisely and little had been done to set Britain on a new path. “The UK needs to admit its addiction to oil and to make a tough decision to get clean,” he said.,,1928846,00.html and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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