By Faridat Salifu
During the recent UN talks in Bonn, developing countries are urging wealthy nations to contribute hundreds of billions of dollars for climate action.
The proposal suggests implementing a 5% sales tax on technology, fashion, and defense firms to generate funding for green initiatives in the Global South.
The G77+China group, representing 134 developing nations, proposes that developed countries could raise $1.1 trillion annually by taxing these sectors. The aim is to help poorer countries reduce emissions, adapt to climate change, and address its impacts.
According to an unpublished position paper viewed by Climate Home, rich countries could generate $441 billion by allocating 0.8% of their GDP.
This amount could be leveraged with private financing to reach the $1.1 trillion target, without compromising on other governmental expenditures.
The proposal includes targeted domestic measures such as a financial transaction tax, a tax on defense companies, a fashion tax, and a “Big Tech Monopoly Tax.” The G77+China group asserts that the resources exist, but it ultimately depends on the political will to prioritize climate change.
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Bolivian negotiator Diego Pacheco emphasized the need for developed countries to fulfill their financial obligations for climate action.
He suggested reallocating military budgets towards climate initiatives or imposing taxes on luxury goods, as extravagant consumption patterns also contribute to the climate crisis.
Innovative financing sources were discussed, including a tax on arms manufacturers, as military emissions account for a significant portion of historical emissions.
Additionally, a financial transaction tax and taxes on international shipping, aviation, and fossil fuels were considered.
The proposal targets global brands, with a financial transaction tax projected to raise $240 billion annually and a 5% sales tax on top technology and fashion firms estimated to contribute billions each year.
This revenue would mainly flow from developed to developing countries, except for the technology tax, where consumers would bear the cost.
By exploring alternative funding mechanisms, the Global South aims to bridge the financial gap needed to combat climate change and foster sustainable development worldwide.
