Why Climate Justice Needs Tax Sovereignty

This October, climate and tax justice movements will gather in Brazil for A Climate for Change: Towards Just Taxation for Climate Finance. The two-day conference at UNICAMP (13–14 October 2025) comes at a pivotal moment: just weeks before COP30 in Belém and on the road to the next stage of UN tax convention talks in Nairobi. 

The arc from Belém to Nairobi defines the crossroads we face. In Belém, governments will deliberate on how to mobilise trillions for the climate transition. In Nairobi, they will decide who sets the tax rules that determine where that money comes from and who controls it. Linking the two is vital: without tax justice, climate finance will remain unreliable, unequal, and undemocratic. Without climate justice, tax revenues will remain misdirected, inequitable, and detached from the people and priorities that matter most. 

Déjà vu in climate finance 

Climate finance debates can feel like déjà vu. For over a decade, leaders have stood on global stages, pledging billions, announcing shiny new funds, and promising to unlock trillions through markets. Yet too often, those pledges fade quietly into the background. 

The most famous commitment — to mobilise US$100 billion a year by 2020 — was missed for years. When donor countries finally reported it as “achieved” in 2022, watchdogs pointed out that much of the total was made up of loans counted at their full face value, development aid re-labelled as climate finance, and private flows of doubtful additionality. Instead of easing the burden, almost 69% of this finance came as loans, leaving many of the most climate-vulnerable countries paying back more than they received. 

At COP29, governments announced the New Collective Quantified Goal (NCQG): a promise of USD 300 billion annually by 2035, billed as the successor to the failed $100 billion pledge. But rather than restoring trust, the NCQG has already become an emblem of delay, dispute, and deep division over who pays, how much, and who benefits. This cycle repeats itself: promises at one COP, quarrels over delivery at the next, and citizens left waiting for finance that never truly arrives. Meanwhile, climate disasters accelerate — from floods and fires to heatwaves and droughts — and the bill for adaptation, loss and damage, and energy transition keeps growing. 

But here’s the twist: while negotiators scour the world for “innovative” fixes — carbon markets, blended finance, green bonds — the biggest climate fund already exists. It’s hiding in plain sight: in tax havens, fossil fuel subsidies and unfair financial rules, all flowing in the wrong direction. Governments are subsidising crisis, locking economies into fossil fuel dependence, stalling investment in renewables, and delaying diversification. In reality, rich countries could raise up to US$6.6 trillion a year through polluter-pays measures — taxing the super-rich, ending fossil fuel handouts, enforcing minimum corporate tax rates, cancelling unjust debt payments and cutting bloated military budgets. Unlocking those resources doesn’t require invention. It requires political will.  

Leaky pipes of climate finance 

Every year, governments lose nearly US$500 billion to tax abuse by multinationals and the super-rich. At the same time, they spend trillions on fossil fuel subsidies — more than US$600 billion in 2023 on consumer subsidies alone, and close to US$7 trillion globally when you include the wider costs of pollution and climate damage. These are political choices, not inevitabilities, and the imbalance could not be sharper. As of April 2025, the Fund for Responding to Loss and Damage — established under the United Nations Framework Convention on Climate Change (UNFCCC) to support vulnerable countries in rebuilding after climate disasters — has attracted just US$768 million in pledges from 27 contributors, with only part of that delivered. Set against the hundreds of billions needed each year, it is a token sum in the face of a mounting catastrophe. By comparison, ExxonMobil alone made over US$55 billion in profits in 2022, the highest ever for a Western oil company. One corporation’s windfall dwarfed what the entire world offered to frontline communities struggling to rebuild. 

Nowhere is this imbalance felt more sharply than in the Global South, where fiscal systems remain deeply anchored in extractive revenues. Heavy reliance on natural resource rents makes government revenues dangerously volatile: they collapse when commodity prices fall, and when prices rise they deepen dependence on fossil rents instead of building broader, fairer tax bases. With corporate profits and elite wealth slipping offshore, governments are left with few reliable options and often fall back on regressive taxes like VAT — easy to collect, but hardest on ordinary citizens. This dependence on extraction also slows diversification, keeping economies tied to fossil rents instead of investing in renewable energy, green industries, and value-added industrial sectors that could build resilience. At the same time, rising debt service is eating up a growing share of public budgets, leaving governments with little fiscal space for a just energy transition. 

The lesson is clear: the money exists, but it flows the wrong way. Instead of subsidising polluters and enabling tax abuse, governments could reclaim resources to fund resilience, renewables, and care systems. Redirecting even a fraction could transform climate finance overnight. 

Why tax is different — and how it pays back  

Think about climate finance like your home’s water supply. Would you rather wait on rainwater that may or may not come, or draw from a well you can rely on every day? Loans pile up. Donations dry up. But tax is steady, fair, and accountable.

• Predictable: revenues arrive year after year. 

• Fair: those with the biggest profits and wealth contribute most. 

• Democratic: tax decisions answer to citizens, not creditors. 

And just as no home can function without a steady water supply, countries need the right to raise and govern their own revenues. This is the essence of tax sovereignty: deciding who is taxed, on what terms, and in whose interests. Without it, governments remain trapped in manufactured scarcity, bound by debt and external dictates. With it, they can chart climate transitions that reflect their priorities and protect their people. 

Tax justice isn’t only about raising money. It’s about shaping the political economy of the transition itself — deciding whose interests are prioritised, who pays, who benefits, and who is left absorbing the costs on the path to sustainable futures. 

In the Global South, the stakes come into sharpest focus: the reckoning is not only about finance gaps but about climate debt. According to a 2025 report by ActionAid, rich polluting countries owe Africa at least US$36 trillion in climate debt. This is the unpaid bill of historic responsibility — a legal obligation under international agreements and a material debt for the real damages and adaptation costs African countries now face. This debt is far greater than the total foreign debt owed by African countries, and it represents services like healthcare, education, and climate action that are being forgone to repay foreign creditors.  

It is this debt that gives rise to demands for climate reparations. Too often, those demands are brushed aside as impossible, dismissed as utopian. But reparations are not charity — they are accountability: recognising that the climate crisis is the result of deliberate choices that enriched some while pushing those least responsible yet most affected into vulnerability. Unlike loss and damage finance, which covers only present impacts while avoiding liability, reparations demand responsibility for past harms and the moral obligation to repair them.  

Tax justice shows how these demands can be made real. A windfall tax on unearned profits — the billions energy companies pocketed during the global price crisis, not through innovation but from sheer price spikes — would be a start. Windfall taxes in Europe offer an example: when energy providers made “abnormally high” profits during the energy crisis, some governments acted — imposing temporary taxes to redirect surplus profits toward households suffering from sky-high bills and toward stabilising energy systems. These measures show what’s possible when tax systems are used to reclaim money that was never meant to go unchecked.  

Alongside this, taxing extreme wealth and shutting down loopholes that let the richest shift profits offshore would raise the resources needed to recognise historic responsibility and fund just transitions. Far from utopian, these actionable steps show how those most responsible for climate breakdown can — and must — pay their fair share.  

Brazil’s moment to lead 

As host of COP30 and co-leader of the Baku-to-Belém Roadmap, Brazil stands at the centre of a historic turning point. The roadmap’s headline figure — to mobilise US$1.3 trillion a year by 2035 — signals ambition. But the real test will be in the design: will this money come from yet more debt and speculative financial instruments, or will it be anchored in fair taxation, subsidy reform, and new international tax rules that shift power away from polluters and towards people? 

Brazil itself embodies the paradox. On one hand, it is home to the Amazon — a living system vital to stabilising the planet’s climate. On the other, Petrobras — Brazil’s state-controlled oil giant — is central to national plans to raise oil and gas production by about 20% by 2030, accounting for more than half of the increase. This expansion deepens the dependence that drives both climate and fiscal vulnerability, even as the government continues to pour tax breaks and financing into fossil projects while presenting a green development agenda on the global stage. 

That contradiction matters far beyond Brazil’s borders. If the world’s largest tropical forest is treated as collateral for more fossil expansion, the credibility of global climate commitments crumbles. But calling for Brazil to turn away from fossil extraction cannot mean ignoring its developmental needs. The alternative must be tangible and just — harnessing tax revenues to fund just transitions that create real economic pathways for communities, rather than entrenching new structural traps. And if Brazil chooses this path — redirecting subsidies, closing loopholes, and championing international tax cooperation in the UN negotiations in Nairobi — it could turn contradiction into precedent: proving that a country can meet development needs while advancing climate justice, and that finance can be built not on charity or debt, but on justice and sovereignty.  

This is also Brazil’s chance to connect climate leadership with the politics of equity. By linking tax sovereignty to the repayment of climate debt, it could strengthen its moral authority at COP30 and show how domestic reforms — taxing windfalls, phasing out fossil incentives, investing in renewable industries — can reinforce global ones. In doing so, Brazil would turn the abstract numbers of the roadmap into real, durable gains for people and the planet. 

In short: the Amazon will be the backdrop, but tax justice will be the litmus test. Brazil can show that climate finance done right is not about volatile private finance or false solutions that serve as dangerous distractions, but rather about reclaiming resources from the structures that created the crisis in the first place. 

A climate for change 

This October, A Climate for Change: Towards Just Taxation for Climate Finance will bring together policymakers, researchers, and grassroots leaders at UNICAMP in Campinas. Here in Brazil, ahead of COP30, we will break down silos and forge strategies, focusing on how reclaiming tax sovereignty can unlock the trillions needed for a just, people-centred transition. 

Across two days, we will take on three urgent questions at the heart of that struggle: 

• How can tax sovereignty be harnessed to deliver climate justice? 

• What strategies can unite movements into a stronger, common     demand?   

• How can Global South leadership reshape global rules to serve       people, not polluters? 

These questions point to concrete measures — from closing corporate tax loopholes and taxing extreme wealth and fossil fuel windfalls, to ending destructive subsidies and anchoring the Baku-to-Belém roadmap in just taxation rather than new debt. They also demand reimagining power itself: reshaping taxation through feminist, decolonial, and reparatory visions led by those at the nexus of extraction, inequality, and climate breakdown.

Taken together, these steps are not just about closing a finance gap; they form the foundations of tax sovereignty, creating revenues that are steady, fair, and accountable to citizens rather than external lenders. But sovereignty cannot be secured in isolation. It rests on multilateral cooperation — which is why advancing a UN Framework on International Tax Cooperation is so critical. For the first time, all countries — not just the richest — have the chance to rewrite the global rules on a truly democratic footing. What is needed now is not another empty pledge, but tax justice: the lever that can turn climate debt into reparations, redirect obscene fossil fuel profits into renewables, and give nations the fiscal power to plan just transitions on their own terms. 

Join us 

Register now to attend the conference online or in person on 13–14 October 2025. The two-day conference will be held at UNICAMP in Campinas, Brazil and will start at 9:30am local time. More information about the event, speakers and panels is available here. 

The conference is co-hosted by Instituto de Economia, University of Campinas (UNICAMP), Inesc, Observatório Brasileiro do Sistema Tributário, Red de Justicia Fiscal de América Latina y el Caribe, Transforma, and the Tax Justice Network, the two-day conference will take place at the University of Campinas in Brazil on 13-14 October 2025.