Fighting global warming in poor nations will mean tax on trade and travel
The National
Chris Stanton

US$100 billion (Dh367.31bn) promise by the industrialised world to help
poorer countries fight global warming will require new taxes that could
hit world trade, air travel or financial transactions, an environmental
expert told UN climate talks yesterday.

Such levies, which would affect everyone from air passengers to workers
transferring funds overseas, have become a key point of debate at
ongoing climate talks that aim at reaching a new international treaty on
global warming by December.

Revenues from the special taxes, plus contributions from governments and
the private sector will help industrialised countries meet their pledge
to provide poor countries with $100bn a year by 2020, said Lord Stern, a
member of an advisory group formed by Ban Ki-moon, the UN secretary

“What we’re looking at is financing the investment associated with a new
industrial revolution,” said Lord Stern, who was the author of a 2006
benchmark report on climate change for the British government.

“No one source is likely to develop $100 billion annually by itself by 2020.”

The UN secretary-general’s high-level advisory group on climate change
financing is examining a range of potential taxes that could be levied
internationally, such as a tax on aviation or marine bunker fuels, which
contribute to greenhouse gas emissions, or a tax on financial
transactions, Lord Stern said.

Each option could raise $10bn to 20bn a year, he said, although the
structure for how the taxes would be levied had still not been worked
out. The group will release a final report on its analysis by October,
he said.

The group would explore ways for poorer countries to receive compensation for the higher cost of taxes, he said.

The taxes would have to be levied with uniformity to avoid distorting
international transport markets, said Ato Newai Gebre-ab, the economic
adviser to the prime minister of Ethiopia and a contributor to the
advisory group.

“One option would have been to say, why not make some countries exempt?”
he said. “Exemption obviously cannot be considered because you have to
put all the enterprises on a level playing field.”

Industrialised countries promised at climate talks in Copenhagen in
December to provide $30bn a year for the next three years to help the
world’s poorest countries adapt to the effects of changing weather
patterns and sea levels.

They promised the level of aid would rise to $100bn a year by 2020. But
developing countries have yet to see much of the aid money, and some
delegates have criticised the process for moving too slowly.

In a statement on Monday, the main bloc of African countries at the
talks called for developed countries to set aside 1.5 per cent of
economic output for climate aid “that should be new and additional and
not just recycled” from existing aid programmes.

The UN group’s recommendations would carry significant weight at the
climate talks as negotiators debate existing proposals for international
taxes, said Antto Vihma, a climate negotiations expert at the Finnish Institute of International Affairs in Helsinki.

“Innovative funding sources, such as taxes on bunker fuels and aviation,
are much more talked about than they used to be,” he said.
“(Developing) countries are split on these issues because some regard
adaptation as an extreme priority, and some feel quite threatened on
fuel taxation, either because they’re big on shipping, or they’re oil
exporting countries.”