A way to fill the Green Climate Fund
The EU's financial-transaction tax could unlock financing to be used to limit and cope with climate change.
By Natalia Alonso,	Tony Long and	Jorgo Riss
A year of extreme, record-breaking weather has served as a timely reminder of the need to invest now to prevent catastrophic climate change.
Recent reports by the World Bank, the United Nations Environment Programme and the European Environment Agency make it blatantly clear that the world is wasting precious time that should be used to reduce carbon emissions and to help the poor adapt to the devastating effects of climate change.
Yet, there is a real danger that financing to fight climate change will be scaled down in 2013.
Some may say that the economic crisis is sapping the European Union's ability to lead on climate action. We believe the economic crisis is no excuse for the EU to abdicate climate leadership. Indeed, in addition to fresh obstacles, the crisis offers opportunities to fight poverty and climate change. For instance, if European leaders were to agree to allocate a significant portion of revenues from a planned financial-transactions tax to climate action, they could raise money even in these cash-strapped times.
At the 2009 climate talks in Copenhagen, industrialised countries committed themselves to help developing countries reduce their carbon emissions and to protect their people from the worst effects of climate change, such as rising sea levels and droughts, storms and other extreme weather events, by mobilising $100 billion (€76.5bn) a year by 2020 and establishing an international climate finance fund, the Green Climate Fund.
Yet the Green Climate Fund remains empty – poor countries may be left to deal with the impact of climate change alone, as developed countries have so far failed to give concrete assurances that they will not turn their back on them in the run-up to 2020. If the current round of United Nations-led climate negotiations – in Doha – is to make progress, it is vital that the EU and other rich countries set out a credible plan to deliver on their promises.
A recent study by the German Institute for Economic Research (DIW) estimated that the proposed European financial-transaction tax would bring in €40bn a year from the 12 EU member states that have so far agreed to go ahead with the tax.
If EU leaders were to allocate just a quarter of this sum to the Green Climate Fund, they could guarantee about €10bn annually to meet the needs of developing countries for climate finance.
The financial-transaction tax is recognised as a promising source of new revenue to address the climate crisis, healthcare, education, and other public goods. France's President François Hollande echoed this vision when he recently allocated a portion of France's new unilateral financial-transactions tax to development and the Green Climate Fund.
So far, EU governments are failing to show leadership at Doha. Now is the time for them to raise the EU's emission target and to make a clear statement that a sizeable proportion of the revenue from any future financial-transaction tax should be used to provide additional EU climate finance needed to meet the commitments to the poorest and most vulnerable.
Natalia Alonso is the head of Oxfam International's EU office. Tony Long is the director of WWF's European policy office. Jorgo Riss is the director of the EU unit of Greenpeace.
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