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A Small Tax on Finance, A Giant Leap Forward for the Climate Fund

June 16, 2011 ·

Climate activists turned up the heat on government officials attending the UN climate talks, calling for a tiny tax on financial speculation to help pay for the fight against global warming.

This week in the German city of Bonn, climate activists turned up the heat on government officials attending the UN climate talks, calling for a tiny tax on financial speculation to help pay for the fight against global warming.

The action in the streets outside the talks, in which youth sporting green Robin Hood caps asked negotiators on their way into the meeting to put money falling from the pockets of high-rolling financiers into the Green Climate Fund, mirrored demands being made inside the summit for a financial transaction tax (FTT), also called a financial speculation tax or Robin Hood Tax. These actions are part of a growing international campaign. In a press conference during the first week of climate talks, Bolivian ambassador Pablo Solon called on countries to adopt an FTT to “generate real funds immediately.” The money is desperately needed in developing countries to adapt to a warming world and for poor-but-growing nations to reduce their own carbon emissions by investing in clean energy.

The UN pegs the price tag for developing country adaptation and greenhouse gas mitigation at around $500 to $600 billion each year in the coming decades. Failure to cut carbon pollution quickly will push costs even higher.

At a press conference in Bonn that brought together labor, youth, environment and development groups from around the world Tetteh Hormeku of the Africa Trade Network called for an FTT, a tax that economists estimate could raise up to $600 billion per annum for the just transition to sustainable economies. “In short,” Hormeku said, “we have to raise the scale of our ambition… of our finances to match the reality of the challenge that we face.”

“We are here today to urge the governments of the world to do the right thing; to impose a financial transactions tax and make the appropriate investments in a greener, cleaner economy,” added Bob Baugh, Chair of the AFL-CIO energy and environment task force and executive director of the AFL-CIO Industrial Union Council. “It is time that the financial institutions, whose reckless actions brought the economic crisis that much of the world is in today, step up and do their part; and make a positive contribution to a cleaner planet and good jobs.”

Meanwhile, the French national assembly passed a resolution supporting a Europe-wide financial transaction tax by a margin of 477 to 2. Statements made by parliamentarians and French president Nicolas Sarkozy called for some of the revenue raised to go to climate change programs.

Sarkozy has promised to make FTTs a centerpiece of the G20 meeting in France in November. On June 15, the Brazilian parliament unanimously adopted a similar resolution calling for the Brazilian government to support a broad-based FTT. In the Bundestag, German lawmakers recently held a debate on the form and function of an FTT, and all of that country’s political parties expressed their support for the idea to the EU tax commissioner.

A global day of action has been called for June 22nd to demonstrate the breadth and depth of global public support for a tax on financial speculation and to build pressure on France, Germany and other European countries to move forward in implementing an FTT. In the United States, National Nurses United and other labor allies will descend on Wall Street demanding high-rolling financiers pay their fair share for the public goods and services that are on the chopping block due to budget short falls.

The Obama administration has not supported a tax on speculation (although several bills have been introduced in Congress), and could do severe damage to the momentum for an FTT in Europe if it sends discouraging signals. Already the U.S. has repeated several times in the Bonn round of climate negotiations that it doesn’t want to talk about innovative sources of climate finance like the FTT.

Climate activists have a message for Obama and his band of merry men at the State and Treasury Departments – If you can’t lead, at least stay out of the way!