Kenya: Kenya spearheads global effort to raise $2.4 trillion for climate fund

Kenya, has collaborated with France and Barbados, to take the lead in convening the inaugural governmental gathering aimed at securing supplementary funding for climate-focused endeavors.

During COP28, President Ruto, President Macron, and Prime Minister Mottley jointly established the International Tax Taskforce, signaling a concerted effort to garner resources for fostering fair and inclusive climate solutions.

At the recent gathering in Washington DC, the task force unveiled its ambitious objective of generating $2.4 trillion annually (equivalent to approximately Sh312 trillion) through new climate-related levies on private aviation, financial transactions, and maritime fuel, with the aim of mitigating the adverse impacts of climate change.

The members have approved a comprehensive two-year action plan designed to ensure that the most environmentally damaging industries and individuals play a role in financing efforts against climate change.

Among the proposed tax measures is a fossil fuel levy or carbon damages tax, targeted at fossil fuel producers, with the potential to generate approximately $210 billion in annual revenue.

Additionally, consideration is being given to implementing a windfall fossil fuel profits tax, aimed at capturing unexpected profits during periods of significant price increases.

The committee is also exploring the possibility of phasing out fossil fuel subsidies, with the intention of redirecting these funds to a global loss and damage fund. Preliminary estimates suggest this could contribute up to $43.91 billion annually towards bridging the climate funding shortfall.

Other tax measures include a financial transactions tax to either be administered globally or confined to developed economies, which would contribute $418.8 billion annually, and a private air passenger levy aiming to raise about $150 billion.

They also propose a maritime fuel levy for using fossil fuels in shipping estimating this would bring in $80 billion annually.

Ali Mohamed, Climate Change Envoy for Kenya and Sherpa to the task force said that the task force is keen to find practical solutions that raise much-needed financing to tackle climate change while having minimal impact on ordinary people.

“The goal is to develop innovative sources of financing that can be implemented by any country that wants to make a difference”.

Laurence Tubiana, CEO of the European Climate Foundation and the architect of the Paris Climate Agreement, said that finding new ways to raise the billions needed to fight climate change effectively and equitably is a huge, but necessary task.

“We’re inviting nations across the world, as well as stakeholders and experts, to engage with and input into our research”.

The other members of the International Tax Task Force include Antigua & Barbuda, Spain, the Marshall Islands, and Ireland. The European Commission, IMF, and the United Nations are observers.