Kenya, Barbados and France are co-chairing the International Tax Taskforce seeking to raise $2.4 trillion by the year 2030 to close annual funding gap for climate change adaptation for developing and vulnerable countries.
International Tax Taskforce which is led by the three countries aims at bringing together governments to foster political will and advance options for international climate taxes.
This initiative is driving discussions among the international community to highlight the importance of putting tax cooperation at the service of 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.
At the meeting, members endorsed a two-year work-plan for the taskforce to ensure all industries and people contribute to financing the fight against climate change, taking into account the pollution induced by their activities.
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.
The inaugural meeting in Washington DC coincided with the International Monetary Fund (IMF) and World Bank Group’s Spring Meetings in the US capital. The founding members comprising Kenya, France, Barbados, Ireland, Spain, Antigua and the Marshall Islands, were joined at the meeting by Colombia, which is now a new member.
The members called on other interested countries to join the new initiative.
Ali Mohamed, Climate Change Envoy for Kenya and Sherpa to the taskforce, 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.”
Aurelien Lechevallier, Director General for Globalization at the French Ministry for European and Foreign Affairs and Sherpa to the task force, said: “The need for substantial, sustainable financial resources for countries to tackle climate change has never been more urgent. As a coalition of nations seeking ways to ensure we can meet our climate and development commitments now and into the future, the task force will collaborate to build political will among all governments and bring equitable, evidenced and workable solutions to COP30.”
Dr. Arnold McIntyre, Principal Technical Advisor for the Government of Barbados and Sherpa to the task force, said: “The new avenues of taxation that we will be exploring in the task force can be a powerful lever that, alongside traditional financing from governments, international financial institutions and the private sector, will unlock the necessary resources for climate adaptation and mitigation.
“Together we will be developing equitable proposals to apply levies targeting the most polluting sectors and individuals, with the aim of supporting the most climate vulnerable people and countries who have contributed least to rising global greenhouse gas emissions. We look forward to meeting our fellow Heads of State and Government of the International Tax Task Force in the margins of the UN General Assembly to take stock of our collective progress.”
In addition, the taskforce will consider design options for each levy by taking a stocktake of existing levies already implemented in countries and conducting a review. This is ahead of launching impact studies in the summer to consider each levy’s potential based on the following criteria:
- revenue collection and distribution;
- national and international equity;
- economic and environmental impact;
- potential scale;
- political feasibility.
The findings of these studies will include feasible and sensible options for international climate taxes that can easily be implemented. The first stocktake of this research will come in autumn 2024.
Prof. Laurence Tubiana, CEO of the European Climate Foundation and the architect of the Paris Climate Agreement and Co-lead of the Secretariat of the International Tax TaskForce, said: “Finding new ways to raise the billions needed to fight climate change effectively and equitably is a huge, but necessary task. Building on and complementing the important work done by bodies including the UN and the OECD, our task force will be looking for workable solutions for governments across the world.
“We’re inviting nations across the world, as well as stakeholders and experts, to engage with and input into our research, and we also expect to shortly announce my fellow co-lead of the task force’s secretariat.”
Each tax avenue under consideration could raise between $4 billion and $1 trillion annually for climate mitigation and adaptation through tactical interventions on major polluting sectors and individuals, according to some estimates.
The taxes under consideration may include levies on fossil fuel levy, financial transactions, private air passengers, windfall fossil fuel profits, maritime fuel and a fossil fuel subsidy phase out. The potential revenue for each tax will be worked out in a rigorous research, analysis and consultation phase, through the impact studies.
The International Tax TaskForce was established at COP28 with the aim of mobilising finance at scale while bringing more equitable climate justice and fairness to our current financial system.