Title: African Leaders Call for Global Taxes and Financial Reforms at Africa Climate Summit
Subtitle: Nairobi Declaration emphasizes the need for increased funding to combat climate change in Africa
Date: September 6, 2023
Nairobi, Kenya – African leaders concluded the three-day Africa Climate Summit in Kenya with the adoption of the Nairobi Declaration, calling for new global taxes and reforms to international financial institutions as a means to finance climate change action. The declaration will serve as the foundation for their negotiation strategy at the upcoming COP28 summit in November.
Discussions at the summit mainly focused on mobilizing adequate financing to address the escalating impacts of climate change, conserve natural resources, and promote renewable energy. Despite being the continent most severely affected by climate change, Africa currently receives only 12% of the annual financing it requires, which amounts to nearly $300 billion, according to researchers.
While market-based solutions such as carbon credits were initially highlighted as potential tools during the summit, the Nairobi Declaration primarily underscored the need for major polluters and global financial institutions to commit more resources to assist developing nations and facilitate affordable borrowing rates. The declaration urged world leaders to rally behind the proposal for a global carbon taxation regime, including taxation on fossil fuel trade, maritime transport, and aviation. The document further suggested the potential addition of a global financial transaction tax.
Implementing these measures on a global scale would ensure significant financing for climate-related investments and safeguard the issue of tax raises from geopolitical and domestic political pressures.
Although approximately two dozen countries presently impose carbon taxes, the concept of a global carbon tax regime has never gained substantial traction. President William Ruto of Kenya referred to the European Union’s proposal for a financial transaction tax as a possible model, citing the potential of such taxes to fund environmental priorities. While the European Commission’s proposal failed to attain unanimous approval, some member states have enacted their own financial transaction taxes.
The African nations will present the proposals in the Nairobi Declaration at an upcoming U.N. climate conference and the COP28 summit, scheduled to take place in the United Arab Emirates. Joab Bwire Okanda, a senior advisor at Christian Aid, expressed support for the call for a global carbon tax while emphasizing the need to abandon false solutions like carbon credits, which allow polluters to continue emitting without implementing substantial actions to reduce emissions.
During the three-day summit, governments, development banks, private investors, and philanthropists collectively pledged $23 billion towards green projects. However, African leaders acknowledged that these investments only scratch the surface of the continent’s financial requirements and called for more systemic changes. African countries assert that their borrowing costs are significantly higher than those of affluent nations, hindering their ability to respond adequately to climate change. Consequently, the declaration urged multilateral development banks to increase concessional lending to poorer countries and suggested better deployment of the International Monetary Fund’s special drawing rights mechanism.
Other proposals outlined in the declaration included measures to help indebted countries avoid default, such as granting ten-year grace periods and extending sovereign debt tenors. Nevertheless, some analysts expressed concern that the summit did not adequately address how Africans can adapt to extreme weather events.
Nazanine Moshiri, a senior analyst at the International Crisis Group think-tank, noted that many communities, especially those already grappling with floods, droughts, and conflict, were disappointed by the lack of emphasis on ensuring that green investments trickle down to them.
With the Nairobi Declaration now in place, African leaders are hopeful that their proposals will pave the way for greater international cooperation and financial support to combat climate change effectively on the continent.
[End of Article]