The urgency and scale of the climate transition makes it vital that we collectively propose and enact taxes that are capable both of generating significant revenues and of being rapidly and effectively implemented. These criteria must be supplemented by a shared set of principles of good taxation for climate finance, to ensure that the proposals pursued are able to deliver fully (and that potentially counterproductive options are avoided). This note presents a preliminary draft for discussion, towards a common basis for assessing and shaping proposals in the crucial decision phase on climate finance currently unfolding. The same principles will have important application in the negotiation of the UNFCITC. As such, these are not simply notional, nice-to-haves; rather, they could form critical elements of international policy decisions upon which our collective future may depend.
The proposal combines lessons from three areas: the foundation of reparative climate finance (loss and damage); the basis of sound taxation; and the core components of equitable international decision-making processes, including relevant human rights instruments. We set these out briefly and identify seven principles that emerge from this combined perspective.