28/11/2024
Unlocking Europe’s industrial transformation: a pathway to a competitive and inclusive net-zero economy
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There’s an urgent need to generate new sources of finance to scale up green, climate resilient development in the Global South: by 2025, it’s estimated that developing countries must mobilise USD 500 billion each year to adequately address climate change. In addition, according to the UN Environment Programme’s 2023 Adaptation Gap Report, the adaptation finance gap stands at roughly USD 194-366 billion per year.
This is why the launch of the new Global Solidarity Levies Task Force for climate action and sustainable development, announced at COP28 with support from the European Climate Foundation (ECF), is a huge step forward to help solve the climate finance puzzle.
Why it matters
The task force helps open up a conversation that was previously ‘a total taboo’, according to ECF CEO Laurence Tubiana. Fossil fuel subsidies total about USD 7 trillion per year, contributing to oil and gas industry profits of USD 4 trillion, while climate change causes ‘an enormous loss of wealth and wellbeing in many countries, and no money to pay for that’.
The new body plans to consider several options, including levies on the fossil fuel, maritime transport and aviation industries, supplemented by a global financial transaction tax. It will focus on raising the funds from those who can easily afford it – for instance, people flying on private jets and first-class tickets – rather than families who fly for their holidays once a year. This will help ensure any new taxes are raised in an equitable way, with minimal impact and maximum benefit for low- and middle-income people in developing countries.
Background
The idea of launching the Global Solidarity Levies Task Force gained momentum following the Paris Summit for a New Global Financial Pact in June 2023, with a political declaration calling for further work to explore ‘new avenues for international taxation in order to fulfil our climate commitments’. Shortly thereafter, heads of government at the Africa Climate Summit in Nairobi in September called for a global carbon tax on fossil fuel trade, maritime transport, and aviation, as well as a global financial transaction tax and a Global Finance Charter to support climate-positive investments.
The task force co-chaired by France, Kenya and Barbados was officially launched at COP28, with the support of the ECF and the European Commission participating as an observer. Antigua & Barbuda, Spain, Marshall Islands and Ireland have officially joined the task force, and other governments are in discussion to do so.
Next steps
Co-chaired by our CEO Laurence Tubiana, the task force secretariat held its first meeting in Washington, D.C. in April 2024, where members agreed to work together to ensure the most polluting industries and people contribute to financing the fight against climate change. Going forward, we are working with the task force members to put forward proposals and promote international agreements for progressive tax options at COP30.