We need quick and fair funding to tackle climate change. One hot idea is imposing levies on polluters and the ultra-wealthy. This could be a game-changer in our fight against global warming.
The Global Solidarity Levies Task Force, formed after Cop28, is exploring 16 proposals that could generate billions to confront climate issues. These ideas include taxes on cryptocurrencies and air travel.
These proposals will be shared with world leaders at the Cop30 summit in Brazil this November. The good news is that some of these taxes already exist in various countries, making implementation more feasible. Plus, the public can weigh in during the consultation phase.
The Task Force is a major initiative, led by leaders from France, Kenya, and Barbados, involving experts from Denmark, Senegal, and Colombia, and backing from the UN and other powerful organizations. Their goal is straightforward yet impactful: coordinate global levies to raise funds, penalize polluters, and ensure a fair tax system.
The consultation highlights the pros and cons of each tax idea. One of the most significant proposals involves taxing fossil fuel extraction, which currently continues to receive $7 trillion in yearly subsidies. In 2022-2023, the five largest oil companies made a combined profit of $281 billion.
A simple fossil fuel levy could be structured to charge $5 per tonne of CO2, increasing by $5 each year until 2030. By 2035, this could potentially raise $1 trillion annually. Many fossil fuel extraction efforts are already taxed, simplifying administrative tasks. However, the political might of the fossil fuel industry could pose challenges. Still, countries could significantly benefit from the additional revenue.
Flying is another area in focus. Only 1% of the global population is responsible for half of all aviation emissions. Proposals include taxing flight tickets or jet fuel, which is currently almost untaxed. Implementing a ticket tax could generate $100 billion annually, while a jet fuel levy might bring in $10 billion. There’s even a consideration for a frequent flyer tax that increases with more flights, although this might need passengers to register with an ID.
Shipping, like aviation, lacks adequate tax coverage for its pollution. Although the International Maritime Organization collects funds from operators for oil spills, a carbon levy could provide up to $127 billion between 2027 and 2030.
Additionally, plastic production—entirely reliant on fossil fuels and damaging to the environment—faces no current taxes. Ongoing talks about a global plastics treaty include a proposal for a levy, which could raise about $30 billion annually. Collecting from a limited number of major producers would ease tax implementation, while the impact on final product prices would be minimal.
Another bold idea is a billionaire tax. The ultra-rich contribute heavily to carbon emissions and often pay lower taxes than average citizens. An annual wealth tax of 2% on billionaires could yield $200 billion to $250 billion from just 3,000 individuals. The challenge would be achieving political consensus, yet such a levy could resonate well with the general public.
Furthermore, the Task Force suggests taxing financial transactions, which have largely escaped taxation despite benefiting from globalization, and cryptocurrencies, which need a lot of energy to mine. A 0.5% transaction tax on stocks could raise $270 billion a year. Thirty countries already implement a similar tax, with France dedicating part of its revenue to climate initiatives.
A tax of 0.1% on cryptocurrency transactions might provide around $16 billion annually, though challenges like potential evasion exist. However, countries like Kazakhstan, a major crypto mining nation, already tax the energy used for mining.
If governments and companies accelerate their climate actions, solidarity taxes could serve as a crucial way to hold polluters accountable.
Interested in joining the discussion? Share your thoughts with the Task Force here.
