Like the World Climate Conference (COP26) ends in Glasgow, on Independent Commission for the Reform of International Business Taxation (ICRICT) issued a statement that securing a global commitment to net zero greenhouse gas emissions by 2050 will not be possible without putting the entire tax system at the service of climate transition.
In a statement sent to PREMIUM TIMES on Thursday, the commission said there was a need to design an ambitious and comprehensive fiscal action plan to reduce carbon emissions, but the burden should not be borne by average citizens while that multinationals and the wealthiest in society are not paying their fair share.
According to the statement, the richest 10% of the world’s population emit nearly 48% of global emissions, with the richest 1% producing 17% of the total, while the poorest half of the world’s population emits 12% of global emissions. emissions global emissions. The global map of carbon pollution merges perfectly with the map of economic inequalities, both within and between countries.
Leonce Ndikumana, professor at the University of Massachusetts, Amherst, said that with only 4% of global emissions coming from Africa, the continent has contributed very little to global warming but is already suffering the most from its consequences.
âBeyond Africa, developing countries are the first victims of the consequences of climate change. Rich countries must honor their climate debt, by financing developing countries to adapt to climate disasters and to make the transition to less polluting energy sources â.
Experts said that although the decision to tax multinationals is a step in the right direction, the global minimum corporate tax of 15% is grossly insufficient, especially as the world needs to pay attention to redistribution. income between rich and less rich countries.
Thomas Piketty, professor at the Paris School of Economics and member of ICRICT, said “at least part of the income of the most successful economic players on the planet – multinationals and billionaires must be shared with countries from the South, not as aid, but on the basis of rights. It is the only way to face the climate challenge “.
The commission said funding decarbonization in rich countries and helping developing countries to do the same requires funding commitments.
âThe global tax agreement signed in early October by 136 countries could have made an important contribution to this objective. But by opting for a global minimum corporate tax rate of just 15% and by making rich countries the main beneficiaries of the additional tax resources that will be generated, the world has deprived itself of a valuable source of finance for the transition. ecological.
The reform could have generated more than $ 250 billion in increased tax revenue around the world with a global minimum tax rate of 21% – and that income could rise to $ 500 billion with a rate of 25%, but will only bring in $ 150 billion with a 15% tax. rate, with the lion’s share of this additional income to be received by a small group of wealthy countries in the North.
12 years and the $ 100 billion a year is still a joke
The commission questions the sincerity of developed economies on the broken promise to mobilize funds for developing countries to adapt to the effects of climate change.
Twelve years ago, at a United Nations climate summit in Copenhagen, rich countries pledged to channel $ 100 billion a year to less wealthy countries by 2020, to help them adapt. climate change and mitigate further increases in temperature. This promise has been broken.
âEven in 2020, that goal was out of reach. A more ambitious global tax deal could have provided the resources to meet and even double that commitment. But the richest countries in the world should have sided not with multinationals and tax havens, but with citizens of North and South. “
For JosÃ© Antonio Ocampo, professor at Columbia University, while responding to the G20 agreement to set a global minimum tax rate, the agreement will do little to help the poorest countries.
âBy setting the rate low, 15%, the deal is like throwing a glass of water on a burning house. It is crucial to launch a more inclusive round of negotiations to reach a new global tax deal for the world, so that it has the necessary resources to face the climate emergency â.
There is still an opportunity
Former MEP and ICRICT member Eva Joly said there is still a window of opportunity to avoid the worst, but that window is closing.
âWe urgently and radically need to decarbonize our economies, reduce our energy consumption and massively develop renewable energies. However, implementing the revolution comes at a cost. The money exists, so we have to go find it where it is: in the accounts of multimillionaires hidden in tax havens, and especially those of multinationals who, for decades, have not paid their fair share of taxes.
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