At COP29, new tax proposals on cryptocurrencies and plastics aim to raise approximately USD 41 billion annually for climate finance, supporting nations in the Global South. Led by the Global Solidarity Levies Task Force, these measures include taxes on crypto transactions and mining, alongside a levy on plastic products. The findings emphasize a shift from voluntary contributions to systematic funding mechanisms for climate resilience, underscoring the need for equity in climate finance.
On November 19, 2024, at the World Climate Change Conference (COP29) held in Baku, Azerbaijan, discussions revolved around innovative funding solutions to address climate change. A prominent proposal from the Global Solidarity Levies Task Force includes implementing new taxes targeting the cryptocurrency sector and the plastics industry. This initiative aims to generate significant annual revenue, estimated at approximately USD 41 billion, which is crucial for supporting countries most affected by climate change, particularly in the Global South. Led by representatives from France, Kenya, and Barbados, the Task Force advocates for solidarity levies as a mechanism to foster inclusivity and equity in international climate policy. Barbados Prime Minister, Mia Mottley, emphasized the potential of these taxes to raise up to USD 690 billion annually, incorporating additional levies on fossil fuel extraction and financial operations. Proposed taxes on cryptocurrency transactions, ranging from 0.1% to 20%, could yield between USD 15.8 billion and USD 323 billion annually. The International Monetary Fund (IMF) noted that a specific tax on Bitcoin mining could add another USD 5.2 billion since it is a high electricity-consuming activity. Furthermore, the Task Force suggested a levy of 5% to 7% on the final price of plastic products, estimating an annual collection between USD 25 billion and USD 35 billion. This approach aims to encourage a transition from virgin to recycled or biobased plastics, thereby fostering more sustainable production methods. The discussions will extend to the Global Plastics Treaty (INC5) in late November and December 2024, with hopes to include taxation measures in the broader climate change conversation. Another element presented is a global minimum 2% tax on billionaire wealth, with a portion proposed to be directed towards climate finance. Overall, the Task Force advocates for a shift from voluntary contributions to systematic, equitable funding mechanisms to combat climate change.
The shifting landscape of climate finance underscores the urgent need for innovative funding mechanisms to support the most vulnerable nations grappling with the repercussions of climate change. The Global Solidarity Levies Task Force, which proposed new taxes, aims to channel funds from high-polluting sectors like cryptocurrencies and plastics to bolster climate resilience. With leaders from countries already bearing the brunt of climate impacts advocating for change, these proposed levies represent a critical step toward a more equitable financial approach in climate initiatives. The discussions at COP29 reflect a growing recognition of the interconnections between various economic sectors and their environmental impacts, particularly in developing regions.
In conclusion, the proposals put forth at COP29 highlight the potential for significant revenue generation through targeted taxation of high-polluting industries such as cryptocurrencies and plastics. By adopting these solidarity levies, governments can enhance funding for climate aid, particularly benefiting nations in the Global South that are disproportionately affected by climate change. This approach not only addresses urgent financial needs but also encourages shifts toward sustainability in industrial practices, ultimately contributing to global climate action efforts.
Original Source: www.ipsnews.net
