Taxation of resource use and environmental harm must structurally reorient fiscal systems towards environmental justice by ensuring that those most responsible for pollution contribute proportionately to mitigation, adaptation, and remediation. This transition requires, as a minimum, reforming currently very regressive consumer levies and taxes to their more progressive form—addressing the fact that households often bear a larger share of environmental tax revenues than the production side—but even more importantly shifting the tax burden to supply-side capital accountability. Instruments could include aviation and maritime levies, upstream carbon and resource extraction taxes, and pricing mechanisms that discourage ecosystem degradation. But more fundamentally, these measures should be expanded to surtaxes on the global profits of multinational enterprises (MNEs) with excessive ecological footprints. Additionally, resource rent taxes are necessary to prevent “green extractivism” in the Global South, while national policies should implement eco-tariffs and penalties for virgin resource extraction. Progressive consumption-based options include Frequent Flyer Levies and punitive luxury taxes on over-consumption that has an excessive ecological footprint. The revenues raised from environmental taxes should be recycled into targeted cash transfers (such as “climate bonuses”), social investment, or public services to the benefit of people in poverty and the reduction of inequalities. When revenues are transparently reinvested in improving essential services, this strengthens the social contract and public confidence, particularly when taxes are explicitly linked to responsibility—such as higher contributions from major emitters based on the principle of vertical equity. Effective design requires clear tax bases, progressive rate structures, and strong administrative capacity. Furthermore, social and environmental safeguards must be an integral part of resource mobilisation to effectively avoid unintended impacts on the rights and livelihoods of vulnerable communities. By linking ecological responsibility to fiscal contribution, these instruments restore democratic legitimacy and embed environmental stewardship within a restorative, rights-based framework for poverty eradication.
