27/06/2024
A growing European movement for a community-driven energy transition
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- Spearheaded by Kenya, Barbados and France, the new Coalition for Solidarity provides countries with a way to progress climate finance, during a period of heightened geopolitical uncertainty
- The task force’s progress report highlights critical steps in coalition-building, impact assessments, and technical research into levies on maritime fuel, aviation, fossil fuels and financial services.
The Global Solidarity Levies Task Force (GSLTF), led and co-chaired by Kenya, Barbados and France with support from the ECF, launched a Coalition for Solidarity Levies at COP29 in Baku, Azerbaijan. The new coalition aims to secure sustainable funding for climate and development action by establishing levies on carbon-intensive industries, based on the polluter pays principle. The Coalition also provides countries interested in tackling climate change with a new forum to advance their interests, without having to wait for broader geopolitical alignment when some countries oppose the principle.
At a launch event at COP29, the coalition welcomed Prime Minister Mia Amor Mottley (Government of Barbados), Prime Minister Pedro Sánchez (Government of Spain), President Hilda Heine (Marshall Islands) and many others, to back this call to action.
Today, five new countries joined the coalition: Sierra Leone, Zambia, Fiji, Djibouti and Somalia. This group backed the Global Solidarity Levies Task Force, and includes Barbados, France, Kenya, Antigua & Barbuda, Colombia, Marshall Islands, Senegal, Spain, and Denmark. This brings the total membership of the coalition to 17, including three observers: the African Union, the European Commission and Germany.
“We are opening a new chapter with the Coalition for Solidarity Levies and we want this coalition to open a new chapter for climate finance. We want member states and sub-national governments that can implement solidarity levies."
Kevin Magron, Special Advisor on Climate Action, France
The Task Force was formed to address a critical gap in climate and development finance. Since its inception, it has undertaken in-depth technical work and built a coalition of willing countries committed to implementing climate levies at a global level.
At COP29, the Task Force released its progress report, unveiling a range of policy options for levies on shipping, aviation, fossil fuels, financial transactions and carbon pricing. It also announced it will explore additional options such as levies on cryptocurrency and plastics production and has the potential to coordinate a minimum effective taxation standard for ultra-wealthy individuals – something currently being considered at the G20.
The progress report outlines a range of policy options identified in the task force’s research:
- Aviation Levy: Policy options being considered include a kerosene fuel levy, including a coordinated levy on private jet fuel, and ticket levies on luxury tickets and frequent flyers. These could generate between $19 billion and $164 billion annually, depending on design and scope.
- Fossil Fuel Levy: A mix of levies on fossil fuel extraction, windfall profits, an increased minimum multinational corporate tax rate or a mixed levies instrument varying by country, to meet a minimum international standard.
- Financial Transactions Levy: Options include revitalising EU efforts to design a global levy by mobilising a coalition of willing countries adopting measures on stock, bonds and derivatives, working towards a global harmonisation of financial transaction levies. This could include a 0.1% rate on stocks and bonds instruments and a 0.01% rate on transactions of derivatives.
- Maritime Shipping Levy: The task force supports the ambitious work of the International Maritime Organisation to introduce a maritime levy. A levy on greenhouse gas emissions from international shipping could yield up to $127 billion per year, based on a “well-to-wake” levy of $150-$300 per tonne of CO2e.
In addition to the core levy areas, the task force also sets out additional sectors that could be levied to address multiple environmental and social challenges, including:
- Plastics production levy: A levy on primary polymer production, set at $60-90 per tonne, could raise $25-35 billion annually, supporting actions against plastic pollution.
- Cryptocurrency levy: Recognizing the high energy demand of crypto mining, a $0.045 per kWh levy could reduce emissions while generating $5.2 billion in revenue.
- Ultra-high-net-worth individual tax: A coordinated minimum 2% tax on billionaires, recently discussed at the G20, could yield $200-250 billion, fostering a fairer global tax landscape.
Impact assessments and consultations will be conducted before concrete policy proposals are presented by the IMF-World Bank Spring Meetings in April 2025. The task force is calling on all countries to join the Coalition for Solidarity Levies and work together to create an equitable, sustainable funding model for climate and development finance. The coalition will continue building political momentum and engaging willing countries over the next year, to back the adoption of the final solidarity levy proposals at COP30.
“There can be no climate justice without fiscal justice, as all countries are facing the same challenge: how to fund the transition while ensuring that those with the greatest means and the highest emissions pay their fair share. This is the aim of the Global Solidarity Levies Task Force: between now and COP30 in Belem, we want to put forward concrete options for global solidarity levies to provide new predictable, stable and concessional sources of finance.”
Professor Laurence Tubiana, CEO of the ECF and Co-lead of the Secretariat of the Global Solidarity Levies Task Force