Reclaiming tax sovereignty to transform global climate finance

Climate finance is often framed as a search for new money. Our analysis and the climate finance slider released with this report, shows that the real issue is not scarcity but capture. Extreme wealth and undertaxed multinational profits are plentiful; what is missing is countries’ ability and willingness to tax them. This ability, tax sovereignty, has been weakened both by global rules that favour profit shifting and by domestic policies shaped by those who benefit most from the status quo.

We offer a blueprint for a global climate finance pool funded through progressive reforms. This report makes a critical contribution to the fight for fair and sufficient climate finance by:

• Exposing false scarcity: Applying a moderate wealth tax and implementing measures to end cross-border tax abuse across 187 countries could raise sums that dwarf today’s climate finance gap, with money left to spend domestically.
• Laying bare the tax sovereignty gap: Two thirds of countries could become net recipients of this pool while still adding domestic revenue, providing evidence that when governments regain and fairly exercise taxing rights, resources flow in rather than out.
• Showing scale is achievable: The reforms must match or exceed most existing proposals for climate finance funds.