At least $65 billion might be raised by taxing foreign-exchange transactions and auctioning pollution permits, a United Nations panel said today in a report recommending ways to finance aid for fighting global warming.
The panel, which includes billionaire investor George Soros and Larry Summers, director of President Barack Obama’s National Economic Council, said selling carbon-emissions permits would generate $38 billion and a financial transactions tax an additional $27 billion, according to the report released today.
The findings are intended to guide envoys at UN climate talks that start this month in Mexico as they seek ways to pay for $100 billion in climate aid that was pledged by 2020 to poor nations at last year’s summit in Copenhagen. The report found that the goal is “challenging but feasible” to achieve.
“Without agreement on finance, we will not be able to reach agreement on other issues for climate change,” Jens Stoltenberg, Norway’s prime minister and co-chairman of the advisory group, said at a press conference in New York. “Now we need the political will to take the decisions.”
UN Secretary General Ban Ki-moon appointed the panel, called the High-Level Advisory Group on Climate Change Financing, in February. It’s led by Stoltenberg and Ethiopian Prime Minister Meles Zenawi. The 21-member group also includes Soros, Summers and Deutsche Bank AG Vice Chairman Caio Koch- Weser.
The report didn’t specify what financial transactions would be covered by the tax beyond saying the focus would be on international currency sales.
‘Court Of Government’
“The ball is really now in the court of governments to move forward on generating these resources,” David Waskow, senior adviser on climate finance for the development charity Oxfam International, said in a telephone interview from Washington. “One can raise substantial public finance from public sources and do it in a way that’s not going to place additional pressure on national budgets and taxpayers.”
The findings would add to the weight behind calls for a tax on financial speculation, sometimes termed a Tobin tax after James Tobin, the Nobel Prize-winning U.S. economist who first suggested the idea in 1971.
Former U.K. Prime Minister Gordon Brown, French President Nicolas Sarkozy and labor groups including the U.K. Trades Union Congress have supported the idea. President Barack Obama’s administration opposes it. A tax of 0.05 percent on financial transactions may raise as much as $700 billion a year, according to WWF, a Washington-based global environmental activist group.
A financial transactions tax would be “difficult to implement universally” and therefore “only feasible to implement among interested countries,” the panel said in its report.