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“The $2 Trillion opportunity”

… ActionAid says harnessing Tax Justice for a Sustainable Future will help to combat climate-related crisis in developing countries

By Francis Maingaila

Lusaka, Zambia24 (11-06-2024) – ActionAid’s report, “Finding the Finance: Tax Justice and the Climate Crisis,” reveals that fair taxation could generate over $2 trillion annually, providing vital support to countries battling climate-related crises. The report urges financial institutions and governments to adopt ambitious, fair, gender-responsive, and climate-sensitive tax policies to mobilize resources to combat the climate crisis effectively.

With heatwaves and floods increasingly common, the report highlights the need for equitable financial mechanisms to support adaptation and transition efforts.

A mere four-percentage-point increase in tax-to-GDP ratios in developed countries could unlock over $2 trillion annually towards international climate finance goals.

Teresa Anderson, ActionAid International’s Global Lead on Climate Justice, emphasizes the urgency of this approach, stating, “We must find a way to cover the costs of climate action to ensure a safe future.”

The report also welcomes the UN General Assembly’s decision to establish a new UN Framework Convention on Tax, which could facilitate increased domestic revenue generation for climate action in developing countries.

David Archer, Head of Programmes and Influencing at ActionAid International, stresses the need for progressive, gender-responsive tax policies in both developed and developing nations.

However, the report highlights the challenges faced by developing countries in raising sufficient revenue due to coercive economic advice and unfair global tax rules perpetuated by wealthy nations.

Implementing fair tax systems targeting the wealthiest individuals and companies could raise over $300 billion annually for the most climate-vulnerable countries.

Faides Temba, ActionAid Zambia Country Director, and Chikumbutso Ngosi, ActionAid’s International Project Manager for the Young Urban Women project in Malawi, echo the urgency of action to address the intertwined challenges of climate change and debt distress.

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