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Some of the numbers mentioned right here at COP28 in Dubai, across the sums wanted for local weather motion, have appeared impossibly large. Roughly $300bn a yr is required, for instance, to fund local weather adaptation in growing nations.
But you already know what else is big? Oil and fuel trade earnings. These amounted to $4tn final yr — sufficient to cowl that adaptation invoice greater than 10 instances over.
As I write beneath, momentum is rising round a probably highly effective and chic strategy to closing the local weather finance hole, utilizing focused taxes on fossil gas and different financial areas.
Today is the one relaxation day in the course of the 13-day UN local weather convention, and delegates are taking the possibility to recharge their batteries earlier than what will probably be an intense remaining stretch of negotiations. We’ll be again in your inbox tomorrow with the most recent. — Simon Mundy
COP28 in short:
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The COP28 presidency acknowledged that $83bn of local weather finance has been “mobilised” to date on the convention.
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The UN known as for worldwide co-ordination to keep away from hostile side-effects from elevated manufacturing of crucial uncooked supplies that may energy the power transition.
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Russian President Vladimir Putin was pictured smiling and laughing with the leaders of Saudi Arabia and the United Arab Emirates in Abu Dhabi, 150km from the COP28 venue.
‘Private jets? Come on’
The world shouldn’t be precisely in need of climate-related “task forces”, and their quantity has grown nonetheless additional right here at COP28.
But the latest addition to that assortment is among the most fascinating.
Laurence Tubiana — the French economist who was a key architect of the 2015 Paris Agreement — yesterday led a press convention to launch a brand new “task force on international taxation to scale up development, climate and nature action”.
Tubiana says they’re engaged on a snappier title — however the brand new initiative already has formal authorities endorsements from Antigua and Barbuda, Barbados, France, Kenya and Spain, with the European Commission taking part as an observer.
The goal is to make the case for focused worldwide taxes to fund inexperienced and climate-resilient funding in growing international locations — an agenda that has been swirling round amongst teachers and activists for years, with solely restricted financial impression to this point.
“This is about opening a discussion that was a total taboo,” Tubiana mentioned. She highlighted the absurdity of a world the place annual fossil gas subsidies quantity to $7tn a yr, serving to to fund oil and fuel trade earnings of $4tn — whereas local weather change drives “an enormous loss of wealth and wellbeing in many countries, and no money to pay for that”.

The new initiative will have a look at the potential to boost local weather finance from taxes on a variety of industries and financial actions, together with fossil gas firms, aviation and monetary transactions. It follows a landmark assertion from African heads of presidency at September’s Africa Climate Summit in Nairobi, calling 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”.
There is an intuitive logic right here, given the home political obstacles going through any rich-nation authorities considering of spending extra on climate-related worldwide help. Lower- and middle-income folks throughout the developed world are nervous concerning the rising price of dwelling, and leery of recent taxes or additional stress on nationwide budgets.
Meanwhile, a comparatively small variety of folks in these nations have benefited from an enormous enhance in wealth inequality, and a tax burden that could be very low by historic requirements.
It’s extensively forgotten that in the course of the golden age of US capitalism within the Fifties, with the business-friendly Republican Dwight Eisenhower within the White House, the nation’s high marginal price for federal revenue tax was 91 per cent, in contrast with 37 per cent at the moment.
According to the folks behind this new tax activity drive, the wealthy world’s highest earners at the moment are doing so nicely that they will simply afford to pay some additional tax and nonetheless have a really good life.
The Seventeenth-century French statesman Jean-Baptiste Colbert famously known as taxation the artwork of plucking the goose to safe the most important quantity of feathers with the smallest quantity of hissing. Avinash Persaud, the influential finance envoy for Barbados’s Prime Minister Mia Mottley, mentioned this initiative is following the identical logic.
“We need to look for where we can have the most modest touch on economic activity,” he mentioned.
One choice to be explored is a windfall tax on oil and fuel earnings above a sure degree, as UN secretary-general António Guterres has already demanded. Another is a tax on each barrel of oil and unit of fossil fuel.
“The dichotomy of the poorest, most vulnerable people experiencing floods and droughts, whilst the oil and gas sector makes profits of $4tn, is a grotesque dichotomy,” Persaud mentioned.

The new physique may even have a look at aviation — however with a give attention to the richest flyers, quite than households taking one vacation a yr. Ali Mohamed, local weather envoy for Kenyan President William Ruto, famous the massive sums spent every year by firms and wealthy people on business-class and first-class airplane tickets.
A modest tax on these airfares “will not make much difference” to the purchasers, Mohamed mentioned, “but it will be a great opportunity to raise enough resources to help developing countries like Kenya”.
Analysts have additionally urged new taxes on personal jet journey, or on people taking greater than a sure variety of flights every year.
Other areas to be explored embody new taxes on monetary transactions, or a small levy on very excessive ranges of wealth or revenue. Another is a tax on carbon emissions from delivery, for which the French authorities tried to construct assist at its high-profile finance summit in June.
The tenet behind the tax activity drive initiative is that these sums ought to come primarily on the expense of those that can simply afford it, with little impression on lower- and middle-income folks in developed nations. But it’s certain to face critics warning of collateral injury.
Oil firms will declare that any new taxes on their trade will result in increased family power costs. And whereas the impression of recent monetary transaction taxes would fall disproportionately on the richest, it could be arduous to keep away from successful to extraordinary staff’ pension pots.
But Persaud, who beforehand headed analysis departments at State Street Bank and JPMorgan, argued that this concept shouldn’t be as radical as it’d sound.
“As an ex-banker, I’m often confronted by my previous colleagues saying, ‘Oh, these things are lovely ideas but just impossible to do,’” he mentioned.
“As an ex-banker, I’m often confronted by my previous colleagues saying, ‘Oh, these things are lovely ideas but just impossible to do,’” he mentioned.
“Well, there’s $30bn being raised every year from financial transaction taxes already — we need to spread them. The US Congress has passed a methane leakage levy — we need to make that global. You already have a [EU] carbon border adjustment mechanism that will raise revenues — we need to send those revenues back to developing countries . . . There are many points of leverage that we can start from to get up to the kind of numbers we need.”
Tubiana added that the agenda was removed from unrealistic within the present political setting.
“Private jets? Come on,” she mentioned. “I think it could go quite well.” (Simon Mundy)
Quote of the day
“Finance for loss and damage must be new finance. We cannot shift finance from adaptation measures to loss and damage.”
— Kathrin Henneberger, member of the German parliament
Beyond COP28: Singapore publishes remaining ESG scores guidelines
The Monetary Authority of Singapore (MAS) yesterday revealed remaining guidelines for ESG scores and information product suppliers.
The rules name on scores firms to handle conflicts of curiosity and construct on the International Organization of Securities Commissions’s suggestions from 2021.
The guidelines are additionally designed to enhance comparability in ESG scores, mentioned Lim Tuang Lee, an assistant managing director at MAS.
Singapore’s model of ESG scores guidelines provide a blueprint for different international locations. The British authorities is more likely to unveil formal proposals for ESG scores rules as early as January. Currently, there’s little oversight of how organisations create ESG standards and price different firms in opposition to them. The scores affect which shares and bonds make it into funding funds which can be marketed as sustainable.
Europe additionally proposed ESG scores guidelines earlier this yr. (Patrick Temple-West)
Smart learn
Some carbon credit score offers in Africa are sparking fears of land grabs, writes Kenza Bryan on this FT Big Read.
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