22/06/23

GLOBAL TAX: Paris summit: Call for tax on world’s richest 2% to help fight climate crisis as leaders gather

As published on: inews.co.uk, Wednesday 21 June, 2023.

World leaders meeting in Paris on Thursday and Friday will seek to hammer out a framework for a financial pact to help poor countries access funds needed to tackle the climate crisis and build environmentally sustainable economies.

The summit, hosted by French President Emmanuel Macron, will focus on green growth and climate finance, particularly how to overhaul global financial institutions including the International Monetary Fund and World Bank.

The meeting will gather 50 heads of state and government including German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen, Brazil’s President Luiz Inácio Lula da Silva, as well as finance lenders and activists – although UK Prime Minister Rishi Sunak has yet to confirm he will attend.

The meeting aims to address one of the key critiques of the global climate negotiations: that they do not take account of the needs of the world’s most vulnerable nations in Africa, Asia and elsewhere, whose existing debt and poverty make climate adaptation even harder.

Others attending the Summit for a New Global Financing Pact include US Treasury Secretary Janet Yellen, Chinese Premier Li Qiang, World Bank President Ajay Banga, IMF Managing Director Kristalina Georgieva, and climate activists Greta Thunberg.

Although officials say the best expectations from the meeting will be a broad set of commitments and a roadmap towards an agreement, this could be the first step in bringing poverty and debt issues into climate talks.

Financial institutions are already adapting to take account of climate concerns. Earlier this year, the World Bank announced that it would increase its lending by $50bn over the next 10 years to combat extreme poverty and mitigate and adapt to climate change.

And the IMF’s Kristalina Georgieva has called for “debt for climate swaps”, which would involve donors forgoing some of their interest or repayments and instead using the money to fund actions to cut emissions or improve climate resilience.

Mr Macron is expected to underline how it is still possible to fight poverty and combat climate change. “The fight against poverty, the decarbonisation of our economy in order to achieve carbon neutrality by 2050, and the protection of biodiversity, are closely intertwined,” he said earlier this week. “We therefore need to agree together on the best means to address these challenges in the poor and emerging countries of the developing world.”

Mr Macron, Mr Sunak, Mr Scholz, US President Joe Biden and other leaders this week signed a joint plea for private financial actors to do more to help fight poverty by providing cheaper and more flexible loans.

One mooted proposal is a wealth tax to help poorer countries tackle the climate crisis: in a letter to the leaders, a group of more than 100 leading economists said a 2 per cent tax on the world’s richest people would raise about $2.5trn a year to help the countries most affected.

Another idea, backed by Mr Macron, is a carbon tax on shipping emissions, echoing long-standing calls by two Pacific nations, the Marshall and Solomon Islands, who have called for a $100-per-tonne carbon tax on the maritime industry.

Tags

Paris Summit