Report reveals how developed country UK could raise significant amounts of climate finance
A
t the UN climate conference (COP29) in Baku, Azerbaijan, rich countries are under pressure to deliver trillions in public climate finance to meet the needs of developing nations, as laid out in the terms of the Paris Agreement.
These figures might seem bafflingly large to the person on the street, and rich countries may claim the figures sound hard to achieve. But a report by Christian Aid has shown how one developed country, the UK, could raise significant amounts of climate finance and contribute its fair share to the overall money needed, without putting major strain on the public.
These measures are based on the ‘polluter pays’ principle.
The report, first published last year, focussed specifically on covering the UK’s £12.6 billion fair share of the Loss and Damage Fund which was operationalised last year at COP28 in Dubai.
The loss and damage contribution is only one part of the New Collective Quantified Goal (NCQG) on climate finance being negotiated in Baku, so these policies below could be combined and built upon further to reach the UK’s overall contribution to the new goal being negotiated at COP29.
Polluter producers’ tax: This would see fossil fuel companies contributing towards the UK’s fair share. The UK government could increase the tax on excess profits from fossil fuel production to 95 per cent, which according to Tax Justice UK could raise around £13bn. Fossil fuel companies have enjoyed huge profits in recent years.
Wealth tax: Another option would be a national Net Wealth Tax in line with the parameters set out by the Wealth Tax Commission.
A rate of 0.5 per cent on the wealthiest is estimated to raise in the region of £15bn.
This has the advantage of being targeted on those who are likely to be disproportionately high polluters in their consumption and personal investments.
There are also numerous smaller targeted taxes, such as the existing International Air Passenger Levy (£3.5bn), the Emissions Trading Scheme (£6bn); an expanded Financial Transactions Tax (£6.5bn) and the existing Energy Profits Levy (around £5bn annually).
Sophie Powell, Christian Aid’s Chief of UK Advocacy, said: “The policy measures outlined here show that there are many levers the government can use to raise these funds that don’t involve taxing working people, but instead are based on the polluter pays principle.
“Many of these measures could be replicated by other Global North countries to raise their own fair share of the climate finance pot.
“The needs of climate vulnerable countries are acute. Devastating floods, droughts and storms are destroying economies, sweeping away homes and ruining livelihoods.
“On Thursday a report by respected economist, Lord Stern and others showed developing country needs were in the trillions, not billions.
“If a reckless driver smashes into your house, they don’t get off with just a partial contribution or loan you the money to fix it. They must pay for repairs. Likewise rich, polluting nations who have caused the climate crisis need to pay for the damage.
“This Labour government came into power promising to rebuild respect with Global South governments; to do so it must respond to this need and pay its fair share, as must other rich countries -- not as charity or as loans that push countries deeper into debt, but as a moral duty to those who are least responsible for causing the climate crisis.
“Private finance, which requires a profit in return, may have a role to play in building renewable energy but has proven completely incapable of dealing with adaptation and loss and damage. For those we need grants, that only governments can deliver, and these policy measures would help raise the funds to deliver them.”
(Vishal Gulati can be contacted at vishal.g@ians.in)
✔️ Report reveals how developed country UK could raise significant amounts of climate finance
💕 Found this article helpful? Spread the word and support us!