Business

Kenya leads g****l team to raise $2.4tr in climate taxes

Friday, April 19th, 2024 04:45 | By
The task force seeks to ensure all industries and people contribute to financing the fight against climate change, taking into account the pollution induced by their activities.
The task force seeks to ensure all industries and people contribute to financing the fight against climate change, taking into account the pollution induced by their activities. PHOTO/Print

The International Tax Task Force on Climate funding, co-chaired by Kenya, Barbados, and France, held its first official meeting in Washington DC,  to seek mechanisms of generating $2.4 trillion (Sh318 trillion) and close the annual funding gap for developing and vulnerable countries

President William Ruto, President Macron, and Prime Minister Mottley established the International Tax Taskforce at COP28, to mobilise finance for equitable climate justice.

The task force aims to foster political will and advance options for international climate taxes, which could significantly contribute to closing the annual funding gap for developing and vulnerable countries, estimated at $2.4 trillion by 2030.

The task force is considering diverse funding sources such as air passenger levies, and fossil fuel taxes, among others. These could individually generate $4 billion to $1 trillion annually, potentially totaling up to $2.2 trillion.

At the meeting, the members endorsed a two-year work plan for the task force to ensure all industries and people contribute to financing the fight against climate change, taking into account the pollution induced by their activities.

Feasible strategies

According to Ali Mohamed, Kenya’s Climate Change Envoy to the task force, the task force is actively seeking feasible strategies to raise essential climate change funds with minimal burden on the public. The aim is to create innovative financial sources that any committed country can adopt, he said.

“The task force is keen to find practical solutions that raise much-needed financing to tackle climate change while having minimal impact on ordinary people. The goal is to develop innovative sources of financing that can be implemented by any country that wants to make a difference,” he said.

This initiative aligns with discussions among the international community about the importance of tax cooperation in achieving global public goods and development objectives.

It also echoes calls from supporters of the Paris Pact for People and the Planet (4P), the Bridgetown Initiative, and the Nairobi Declaration on Climate Change to leverage additional financing for these objectives. The inaugural meeting in DC coincided with the International Monetary Fund (IMF) and World Bank Group’s Spring Meetings in the US capital. The founding members – Kenya, France, Barbados, Ireland, Spain, Antigua and the Marshall Islands – were joined at the meeting by a new member, Colombia.

The meeting was also observed by the European Union, the IMF, and the United Nations (UN). Membership of the task force currently has representation from around the world. Together, the members called on other interested countries to join the new initiative.

Several tax options

With the work of the task force now fully underway, its members aim to put forward proposals and promote international agreements on one or several tax options at COP30 in autumn 2025.

These agreements can be implemented by relevant decision-makers, and by coalitions of countries ready to commit to implementing new tax options at domestic level or in a relevant international forum, to generate more fairness and equity in the current global tax system.

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