Paying for the pandemic and a just transition

The Transnational Institute has just published a report setting out ten proposals to mobilise resources to cover the cost of the global COVID-19 pandemic and to pay for the transition away from the fossil fuel economy. As the report points out in its conclusion, the multiple crises facing both the global North and the global South have shifted the Overton window of what is economically feasible. And as the report also makes clear, the means for building back better are readily available provided governments are prepared to take bold measures to, for example, tax wealth and corporate profits, reform fossil fuel subsidies, tax carbon, cancel debt, and achieve the UN sustainable development goals.

On the expenditure side the report identifies six priority areas of what might, in the words of economist Jayati Ghosh, shape “a global multicoloured new deal: red, green and purple.” These expenditures are summarised as follows:

To resource these expenditures TNI identifies ten proposals, most if not all of which will be familiar to readers of this blog, including a global wealth tax; a tax on income from wealth held through offshore structures; an excess profits tax; reforming corporate income tax; a financial transactions tax; removing fossil fuel subsidies, and so on. As the diagram below suggests, the potential revenues from these proposals are more than sufficient to pay for the expenditures identified above:

The core message of this report is that the gravity of the multiple crises facing humanity requires entirely new economic, political and cultural models that place care for humans, and for planetary life, above the pursuit of profit. If we are to meet the challenge of building back better, the resources to achieve this better future are to hand – “so long as the rich and powerful are made to pay”.

You can access the full TNI report here