“Taxing financial transactions or trade in arms, tobacco and fuel might help” green the planet.
University of Wyoming professor Edward Barbier writes in Nature:
In June, the United Nations Conference on Sustainable Development, ‘Rio+20’, will aim to green the world economy and, at the same time, eradicate poverty. But progress at Rio+20 is likely to falter over a familiar stumbling block: financing.
Negotiations at conferences such as these are often focused on setting targets for action or making financial commitments, without negotiating the mechanisms by which those funds will be raised.
This has resulted in large gaps between intended actions and actual funds, on the order of hundreds of billions of dollars.
Three revenue-raising mechanisms are often proposed: funds, global markets for carbon and ecosystem services, and revenues from global trade. The first two don’t seem to hold much promise for generating the hundreds of billions of dollars needed. For example, the Green Climate Fund, agreed at the 2010 Cancun climate talks, promises up to US$100 billion a year by 2020 to help devel- oping countries to adjust to global warming; yet present international commitments to all climate funding total less than $2.5 billion. Other funds face similar gaps…
Levying taxes on those things that societies find unsalutary, from alcohol to gambling, is a long-established practice. It makes sense to extend the taxation of ‘societal ills’ to activities that have made a select few so rich and caused so much of the recent financial havoc.
A financial transaction tax (FTT) is one such possible funding source. A small FTT collected on the sale of financial assets, such as stock, bonds or futures, would have a neg- ligible effect on trade, but could raise sub- stantial funds: a tax of 0.1% on equities and 0.02% on bonds could bring in about $48 billion from G20 member states…
Other taxes hold lucrative promise. A 10% tax on global arms exports, for example, could raise up to $5 billion annually5. Additional tobacco-sales taxes in G20 and other Euro- pean Union (EU) countries could generate an extra $10.8 billion; global aviation-fuel taxes $27 billion; and shipping-fuel taxes $37 billion…
Despite such obstacles, these methods have the best chance of raising the money needed to make a sustainable planet. It is time that such creative funding mechanisms were discussed more seriously at meetings — such as Rio+20 — at which action is proposed.