New taskforce for climate action and sustainable development

04.12.2023

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 a new global taxation taskforce 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 taskforce 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 a taskforce on international taxation 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 taskforce 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 taskforce, and other governments are in discussion to do so.

Next steps

The taskforce is gathering a coalition of countries that support the idea of new international taxation for development and climate action. The ECF will host the taskforce’s secretariat, in close collaboration with civil society organizations from other regions. As secretariat, the ECF will support advocacy and diplomatic outreach to help build a representative, strong coalition of countries, ensure the coherence of the taskforce’s work with other initiatives, and push for strong ambition.

The taskforce members will now focus on exploring new avenues for international taxation, with the objective of having coalitions of countries reach an agreement at COP30 in 2025.

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