1 week Ago By Nick O'Malley
World leaders gathered at United Nations climate talks in Azerbaijan have been urged to consider taxing business class air travel, large stock and cryptocurrency trades and plastics as negotiations over finance grind on. These talks, focused on raising a vast sum of finance from the developed world for the developing world to cope with adaptation to climate change and pay for the transition to cleaner economies were always going to be contentious, but the thumping election victory of Donald Trump has added to pressure on negotiators. The oil industry still dominates Baku, host to the COP29 United Nations climate talks.
Credit: AP Negotiators have to agree on not only how much moneyper year for the task, but also which nations should be donors and which ones recipients. When the world agreed on the process as part of the Paris accord under the UN climate treaty, nations such as China and Saudi Arabia were considered still to be developing. Now they have grown in wealth, some developed nations want to see them join the ranks of the donors.
Then there are negotiations over the form that the finance should take. How much would take the form of public grants and donations? How much would be delivered via the private sector? How could development banks like the World Bank be reformed to ensure developing nations could access finance at reasonable rates? The sum being negotiated is staggering. The finance is set to replace an existing fund which expires in 2025 and provides US$100 billion per year.
UN finance leaders now believe that developing nations will need US$1.3 trillion a year by the 2030s, a figure backed by one of the largest UN groupings of nations, the G77. If the United States pulls out of the agreement, as expected when Trump takes office early next year, it will not contribute.
The rise of the populist right is already being felt at the talks in Baku, with the delegation of Argentina’s new far-right government already pulling out. On Saturday, Australian Climate Change and Energy Minister Chris Bowen will land in Baku with the task of driving the bogged-down finance negotiations to a conclusion, along with his Egyptian counterpart Yasmin Fouad. It is a formidable task.
One observer has already likened the current negotiating statement to World War I. “It is a difficult job, but it is a crucial job,” says Dr Wesley Morgan, climate diplomacy specialist at the University of New South Wales. “It is the grand bargain of the global climate negations.
The wealthy nations that put most of the emissions into the atmosphere historically are helping to pay for the developing world to take a cleaner path in future. It is the only hope we have of stabilising the climate.” Fortescue executive chairman Andrew Forrest at COP29 in Baku.
Credit: Bloomberg He said Bowen’s appointment to co-chair the finance negotiation demonstrated Australia’s growing stature within the UN climate process. This is perhaps why there is such interest in developing new methods of raising large sums of money. Mining boss Andrew Forrest, a regular at COP talks, made a speech calling for the adoption of “real zero” rather than “net zero”, a measure he said would allow companies to measure the savings they made by converting to clean energy and then raise finance against those savings.
One group, backed by United Nations Secretary General António Guterres, the Global Solidarity Levies taskforce, led by France, Kenya and Barbados, whose former prime minister Mia Mottely has become a driving force at COP climate talks, called on polluting industries to contribute more to the cost of stabilising the climate. “One solution is international taxation of high-emitting sectors, which has the potential to raise significant amounts of revenue that could be used to fill the climate financing gap,” says the group’s report. Their report estimated that cryptocurrencies added 1 per cent to global energy demand last year, and that charging $US0.
045 per kWh for the energy would produce $US5bn. A global levy on trading stocks and bonds could raise up to $US418 billion a year. A levy on fossil fuel extraction of $5 per tonne of CO2 could raise $US210 billion a year, while levies on international shipping and aviation could raise up to $US200 billion a year in revenues by 2035.
It suggested aviation levies could be applied to fuel, the length of flights, the number of flights individuals took, with rates progressively increasing, or targeted towards luxury travel, such as business, first class or private flights. Setting a levy on the production of new plastic polymers rather than recycled plastics could yield about $US25 billion to $35US billion a year if set at $60 to $90 a tonne, said the report. “The ‘polluter pays’ principle has guided us thus far,” said Mottley.
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