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The climate finance gap is mind-bogglingly big, and growing by the year as floods, droughts and wildfires deepen their impacts. At UN climate talks COP29, developed countries promised to deliver US$300bn annually by 2035 to support climate action on mitigation and adaptation in developing countries. The COP also called for major collaboration to scale financial flows to $1.3trn a year by 2035 from public and private sources.
Though huge, the figure agreed at COP29 is a drop in the ocean compared with the $6.5trn annual estimated need to 2030 to meet climate targets, rising to $7trn-$8.1trn by 2035. This was calculated by independent economists, led by the Grantham Research Institute on Climate Change and the Environment, tasked by the COP to find solutions to close the gap.
The group has been clear that the role of the private sector will be much more important than in the past, given public funding constraints. Some $1trn per year by 2030 and $1.3trn by 2035 needs to come from sources outside government coffers, including the private sector, it says.
One of the recommendations by the economists is for “innovative solutions”, including international taxation of high-emitting sectors, which it believes could raise up to around $150bn in additional revenues by 2030, alongside other non-traditional sources of funding such as debt swaps and philanthropy.
A dedicated taskforce, co-chaired by the governments of Barbados, Kenya and France, has been considering how to achieve this. The Global Solidarity Levies Task Force is looking at how to introduce levies that are “feasible, scalable and sensible”, and how revenues would be allocated to countries in need. It is co-led by veteran climate diplomat Laurence Tubiana, one of the key architects of the 2015 Paris Agreement, and Ismail Momoniat former acting director-general of South Africa’s National Treasury.
The International Monetary Fund; UN; Organisation for Economic Co-operation and Development (OECD); World Bank; and the G20 group of nations are among a broad group of organisations involved. The taskforce will present its findings in November at COP30 in Brazil. Its plan is to bring together a “coalition of the willing”, ready to implement one or several of the ideas.
So far, 14 countries have signed up as members of the coalition, including Colombia, Denmark, Spain and Zambia. This means they support the idea in principle and will consider introducing the levies proposed by the taskforce domestically, and are willing to redistribute part of the funds collected for international climate action.
In January, the taskforce published draft proposals for 16 ‘strawman’ options, intended to generate discussion. Four of the suggested levies cover aviation, while there are three each on cryptocurrencies and fossil fuels. Financial transactions, shipping, plastic polymers and high-net-worth individuals all have one proposed levy, and carbon pricing has two. The most popular proposal so far is a levy on aviation, including targeting jet fuel, flyers with first and business class tickets or users of private jets.
According to a report summarising responses, there is majority support for this option. Many see it as one of the fairest choices, given that just 1% of the global population is responsible for half of the world’s aviation emissions, and 80% of the world’s population have never flown.
Such a levy is unpopular with the aviation industry, which argues that air transport is already subject to a range of taxes and fees specific to national regulatory environments, and that it could negatively affect tourist-dependent economies.
In June, France, Kenya, Barbados, Spain, Somalia, Benin, Sierra Leone, and Antigua and Barbuda announced that they were forming a coalition backing a levy on premium flyers.
“New levies on premium flyers can raise vital funds for climate and development. In the current context, everybody is pessimistic, saying we cannot do anything. This announcement is proof that we can make progress,” says Tubiana.
A levy on premium flyers could raise €78bn per year, according to research by CE Delft. While the overall aviation sector is responsible for more than 2.5% of carbon dioxide emissions, premium travel has risen sharply in recent years, with a 46% increase in emissions from private aviation between 2019 and 2023
The idea also benefits from public backing, with three out of four people in 13 countries believing that wealthier air travellers should pay more tax, owing to their outsized impact on climate change, according to research by Oxfam and Greenpeace.
Speaking at a Chatham House debate on climate levies in June, Avinash Persaud, special adviser on climate change to the president of the Inter-American Development Bank, said that governments had to act to make up for the shrinking pot of Official Development Assistance finance, which fell by 7% in 2024 compared with the previous year, according to the OECD.
Though some people will say such levies are impossible to introduce, and will be evaded, some countries have already introduced similar taxes – for example, France and Italy have launched financial transactions taxes in the past 10 years, raising almost $20bn.
“That’s $20bn we wouldn’t have had if we’d listened to people saying that it can’t be done,” says Persaud. “Shipping is a big system. Aviation is a big system. Finance is a big system. We need to find small taxes on these big systems and tax them,” he adds.
French climate ambassador Benoît Faraco points to the example of a tax on air tickets introduced in France by former president Jacques Chirac in 2005 to finance campaigns against diseases in Africa – in particular, the fight against HIV/AIDS.
“One of the lessons we learned was that of course you can start with a small group, but at the end of the day, you need to enlarge the base – it’s not sustainable in this complicated world to be front runner forever,” he says. Though the current geopolitical climate is unhelpful in terms of ideas such as solidarity levies, France still wants to have the conversation, Faraco says. “It will take time, but it will be necessary,” he argues.
Creon Butler, director of the global economy and finance programme at Chatham House, fears that countries that do not support the idea of levies could create problems. For example, given US president Donald Trump’s stance on tariffs, among other things, he could decide that levies by other countries discriminate against US interests, and take action against them.
“We’re in a new kind of world where a ‘coalition of the willing’ may not be enough,” he says.
To get public support for solidarity levies, Persaud stresses that it will be vital for countries that introduce them to communicate them clearly. Some of the current pushback on green policies has been caused by electorates feeling that climate transitions involve costs for them, and they have not seen the benefits such as cheaper bills from renewable energy, he says.
“The politics will not work if a country is levying a tax on its people, and all of those resources are going somewhere else. If a significant proportion is kept internally for projects to build resilience, and the rest distributed internationally, that may work,” Persaud argues.
Anna Åberg, research fellow at Chatham House, says that although geopolitics makes a massive breakthrough on levies unlikely in the short term, that does not mean that nothing can be done to progress the agenda.
She points to the debate on creating a fund for loss and damage to help the poorest nations pay for the irreversible impacts of climate change – an agreement on which many people had thought impossible, though it had been discussed for decades.
“Positions and perceptions shifted a lot in just one year – it was quite remarkable to see that play out. Similar things can be said for discussions around net zero, or putting an end date to oil and gas production,” she says.
“In the beginning, it seems like some kind of fantasy, but then it becomes a normalised part of the discussion. You dig into the details and all of a sudden you see these shifts taking place,” she adds.
As Åberg points out, solidarity levies are not new – some 30 countries have a form of tax on financial transactions, and more than 20 implement some kind of levy on aviation. “There are models we can build on and replicate in the short term,” she says. “It would be great if lots of governments did this, but it’s okay to start small because it enables the conversation to be normalised, it raises the profile, and you can build momentum over time.”
Catherine Early is a freelance journalist
