Trillions could be diverted to climate finance: Report

Developed countries could mobilise more than $5 trillion/yr to address climate change, including by ending fossil fuel subsidies and levying a range of taxes, civil society organisation Oil Change International said today.

Countries classed as ‘Annex II' by UN climate body the UNFCCC — which number 24, plus the EU — could raise $5.3 trillion/yr by taking measures such as imposing a "frequent flyer levy", as well as "climate damage taxes" on fossil fuel producers and tackling tax evasion, Oil Change International said.

Almost 200 countries agreed at last year's UN Cop 28 climate summit to transition away from fossil fuels. The next "key step" is for a new climate finance goal "to make this possible", Oil Change said.

Countries at Cop 29 in November will decide on the next stage of the climate finance goal, known as the new collective quantified goal (NCQG). The initial goal, agreed in 2009, saw developed countries pledging to provide $100bn/yr in climate finance to developing nations over 2020-25. Developing countries have broadly called for a floor of $1 trillion/yr for the next iteration of the goal, while developed countries have not yet put forward their thoughts on amounts. Disagreement persists over UNFCCC country classifications of developed and developing, which date back to the organisation's setting up in 1992.

Ending fossil fuel subsidies — to which several developed countries have already committed — could raise $270bn, Oil Change's report found. The single action that could mobilise the most finance, at $2.56 trillion annually, would be a wealth tax "on multi-millionaires and billionaires", the report found. Brazil, which holds the presidency of the G20 this year and will host Cop 30 next year, has also proposed a tax on billionaires.