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Soros Panel Draft Foresees Bank Tax, CO2 Auctions to Aid Climate
2010-11-05 00:00:01.7 GMT
By Alex Morales and Jim Efstathiou Jr.
Nov. 5 (Bloomberg) -- At least $65 billion could be raised
by taxing foreign-exchange transactions and auctioning pollution
permits, a United Nations panel recommending ways to finance aid
for fighting global warming will conclude today, according to a
draft of its report.
The panel, which includes billionaire George Soros and
Larry Summers, director of President Barack Obama's National
Economic Council, estimated that selling carbon emissions
permits could generate $38 billion and a financial transactions
tax an additional $27 billion, according to the draft dated Oct.
4 and obtained yesterday. The UN will release the study in New
York today.
The findings are intended to guide envoys at UN climate
talks that start this month in Mexico as they seek ways to pay
for $100 billion in climate aid that was pledged to poor nations
by 2020 at last year's summit in Copenhagen. The draft report
found that the goal is "challenging but feasible" to achieve.
"The ball is really now in the court of governments to
move forward on generating these resources," David Waskow,
senior adviser on climate finance for the development charity
Oxfam International, said in a telephone interview from
Washington. "One can raise substantial public finance from
public sources and do it in a way that's not going to place
additional pressure on national budgets and taxpayers."
Appointed by UN
UN Secretary General Ban Ki-moon appointed the panel,
called the High-Level Advisory Group on Climate Change
Financing, in February. It's led by Ethiopian Prime Minister
Meles Zenawi and his Norwegian counterpart Jens Stoltenberg. The
21-member group also includes Soros, Summers and Deutsche Bank
AG Vice Chairman Caio Koch-Weser.
The draft report didn't specify what financial transactions
would be covered by the tax beyond saying the focus would be on
international currency sales. A UN spokesman confirmed the
report was coming and didn't discuss details of its conclusions.
"The report is going to say that it's definitely possible
to put together the $100 billion a year in financing for climate
change," Dan Shepard, a UN spokesman, said in an interview.
"But there are challenges. The report has to be looked at by
governments because they're the ones that would have do it. But
it can be done practically."
The draft was written before the panel's last meeting,
which was on Oct. 12 in the Ethiopian capital, Addis Ababa.
Changes may be made in the version released today.
Tobin Tax
If confirmed today, the findings would add to the weight
behind calls for a tax on financial speculation, sometimes
termed a Tobin tax after James Tobin, the Nobel Prize-winning
U.S. economist who first suggested the idea in 1971.
Former U.K. Prime Minister Gordon Brown, French President
Nicolas Sarkozy and labor groups including the U.K. Trades Union
Congress have supported the idea. President Barack Obama's
administration opposes it. A tax of 0.05 percent on financial
transactions may raise as much as $700 billion a year, according
to WWF, a global environmental activist group.
A financial transactions tax would be "difficult to
implement universally" and therefore "only feasible to
implement among interested countries," the panel said in its
draft report.
Carbon Plan
The panel assumed a carbon price of as much as $25 a ton on
emissions in the levy it suggested. An additional $5 billion
could be gained from a tax on carbon offsets in the UN's Clean
Development Mechanism, which polluters buy to make up for
emissions elsewhere, according to the study. Private offsets
could generate as much as $14 billion.
An additional $12 billion would come from a levy on
shipping and aviation, the draft report showed. Waskow said the
levies on transportation need to be structured so as not to harm
developing nations.
Other sources of finance identified in the report included
direct contributions from government budgets, a measure it said
could generate the full $100 billion while being politically
"challenging."
The panel also looked at a "wires charge" on electricity
generation, which it said could provide $5 billion; the removal
of fossil fuel-subsidies, which could give $8 billion; and a
carbon tax, which would garner $10 billion. Private finance
could provide a net $18 billion, it said.
For Related News and Information:
Climate-change news: NI CLIMATE <GO>
Top environment stories: TOP ENV <GO>
Most-read environmental news: MNI ENV <GO>
Alternative energy monitor: ALTM <GO>
--Editors: Reed Landberg, Larry Liebert
To contact the reporters on this story:
Alex Morales in London at +44-20-7330-7718 or
amorales2@bloomberg.net;
Jim Efstathiou Jr. in New York at +1-212-617-1647 or
jefstathiou@bloomberg.net.
To contact the editors responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net;
Larry Liebert at +1-202-624-1936 or
liebert@bloomberg.net.
