What’s going on here?
Spain, Brazil, Chile and South Africa have launched a global coalition to advocate for an end to tax loopholes for the ultra-rich. They highlight the stark financing gap between taxpayers in delivering the Sustainable Development Goals (SDGs), and emphasise that the richest individuals currently contribute the least, due to lower effective tax rates and legal loopholes.
The four governments called for others to join their mission to drive a fairer, more progressive tax system at the UN’s 4th International Conference on Financing for Development in Seville last week.
What does this mean?
The UN Conference in Seville convened world leaders, finance ministers and negotiators from 192 countries, aiming to close the $4trn annual financing gap necessary for meeting the SDGs, targeting 2030. The resulting ‘Sevilla Commitment’ confirmed the world is “falling short” of the sustainable development agenda, particularly regarding climate financing for mitigation, adaptation and loss and damage.
It was agreed at COP29 that developed countries should triple climate financing to low and middle-income countries. This will provide $300bn a year of much-needed climate finance by 2035, but it’s not clear how it will be achieved.
Whilst the Sevilla Commitment called for a scaling up of climate financing, Spain, Brazil, Chile and South Africa have gone further, advocating for tax reform targeting the super-rich.
Why should we care?
The wealthiest 10% are responsible for two thirds of climate change, so tackling climate injustice is a necessary step to rebalance climate financing and deliver the SDGs. Billionaires globally are taxed at an average around 0.3% of their wealth, far less than what ordinary taxpayers pay. Promoting fairer taxation of these wealthy individuals could unlock trillions for climate action.
As 2030 rapidly approaches, we need urgent action and deeper-rooted systemic change if we are to meet looming climate targets. The proposed tax reform will add a powerful lever to climate finance. By taxing the wealthiest, national governments are spared of levying further public debt and increasing everyday taxes – two major inhibitors of leveraging climate finance – whilst maintaining their commitment to funding climate action.
Be Curious!
- Read more about Spain’s position on increasing taxation of billionaires.
- In other news, France, Spain and others have recently pledged to tax premium-class flying and private jets in a bid to raise funds for climate action and sustainable development.
- Follow the lead up to COP30 taking place in November 2025, here.
- And read Curious Earth’s feature piece on COP29 – the finance COP – here!
Featured image by Eyestextix Studio via Unsplash
