(Bloomberg) -- More expensive business class flights, levies on stock and bond trades and a $5-a-ton tax on fossil fuel emissions. These are just some of the ideas being pitched by influential leaders at the COP29 summit as a way to raise much needed cash to help the world battle climate change.
Barbados Prime Minister Mia Mottley, who has emerged as one of the leading international voices on climate finance, is spearheading efforts to find new funding for developing nations and small island states. The task has become more urgent as extreme weather risks rise and it becomes clear that these countries can’t rely solely on the goodwill of their richer peers.
At COP29, Mottley once again called for countries to further examine innovative sources of finance. She said that placing levies on shipping companies, airlines and some financial trades, as well as taxing fossil fuel extraction, could raise at least $350 billion a year — more than three times what rich nations mobilize annually through public sources.
The proposal is a continuation of Mottley’s campaign to raise more climate finance that started under the Bridgetown Initiative in 2022. “These decisions are not beyond us politically,” Mottley said in Baku on Tuesday. “The elephant in the room for financial services cannot continue to be avoided, even if we’ve been unsuccessful in the past.”
She spoke alongside Spanish Prime Minister Pedro Sanchez, whose country was battered by deadly floods last month, as well as the Europe Union’s climate commissioner and members of the Global Solidarity Levies Taskforce. Sanchez also called for more taxes on fossil fuels. Brazil, this year’s G-20 president, has mooted a wealth tax on billionaires.
“When we fail to tax fossil fuels, we are indirectly subsidizing them,” Sanchez said. “We need to focus on justice.”
Some efforts are already in the works. Shipping giant A.P. Moller-Maersk A/S expects the industry’s global regulator next year to approve a charge on vessels’ greenhouse gas emissions. There's debate over whether those proceeds should go into climate finance or to help the industry decarbonize.
Negotiators from almost 200 countries are in Baku to agree on a new goal for developed nations to provide climate finance for emerging economies. It’s estimated that they will need trillions of dollars a year to cope with global warming — an amount that even the most optimistic observers say is well beyond the reach of public coffers in the Global North.
Barbados, France and Kenya are leading the fight to make sure polluters pay, while also trying to get the financial sector to free up more money. The idea is to come up with options for countries to discuss at next year’s COP30 summit in Brazil.
The EU is currently the biggest contributor of climate finance but is coming up against fiscal limits and also looking to find new solutions. Wopke Hoekstra, the bloc’s climate chief, singled out aviation as a potential target.
“It is clearly one of the sectors globally that needs to do more and is heading unfortunately in the wrong direction with its emissions,” he said. “It is generally the richer part of the global population that fly more. An aviation levy would also provide us with a further opportunity to inject further solidarity into climate finance.”
(Adds details in seventh paragraph about plans to charge shipping emissions)
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