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Tuesday 05 Nov 2024
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African leaders proposed new global taxes to fund climate crisis action in a declaration that will form the basis of their negotiating position at November's COP28 summit.
On Wednesday, the Nairobi Declaration capped the three-day Africa Climate Summit in Kenya, which was dominated by discussions of how to mobilise financing to adapt to increasingly extreme weather, conserve natural resources and develop renewable energy.
Despite suffering from some of the worst impacts of climate change, Africa only receives about 12 percent of the financing it needs to cope, according to researchers.
While organisers emphasised market-based solutions such as carbon credits in the lead-up to the summit, the final declaration was heavy on demands that major polluters commit more resources to help poorer nations.
It urged world leaders "to rally behind the proposal for a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation, that may also be augmented by a global financial transaction tax".
It said implementing such measures at a global level would ensure large-scale financing for climate-related investments and insulate the issue of tax raises from geopolitical and domestic political pressures.
About two dozen countries impose taxes on carbon, according to the International Monetary Fund (IMF), but the idea of global carbon tax regime has never gained much traction.
On Tuesday, Kenyan President William Ruto cited proposals in the European Union for a financial transaction tax (FTT) as a potential model.
The European Commission proposed an FTT in 2011, without specifying what the revenues would be used for. Some conservation groups said the money should finance environmental priorities.
The commission's proposal never won the unanimous approval required from the European Council needed to become law, although some member states have enacted their own FTTs and there are ongoing efforts to revive the measure across the EU.
International financial system
African countries will take the proposals in the Nairobi Declaration to a UN climate conference later this month and the COP28 summit which begins in the United Arab Emirates in late November.
The declaration also advocated for reforms to the multilateral financial system and the development of a new Global Climate Finance Charter by 2025.
African countries say they are forced to pay borrowing costs that are five to eight times higher than wealthy countries, leading to recurrent debt crises and preventing them from spending more to respond to climate crisis.
The declaration called on multilateral development banks to increase concessional lending to poorer countries and for the "better deployment" of the IMF's special drawing rights mechanism, which issued $650 billion as part of the Fund's Covid-19 response.
Other proposals included measures to help indebted countries avoid default such as instruments that can grant 10-year grace periods and extend sovereign debt tenor.
Governments and private investors committed billions of dollars during the summit to green investments - including a $4.5 billion pledge by the UAE toward renewable energy projects - but African leaders say meeting the continent's needs will require funding increases of an entirely different order.
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Source: TRT
