(Commonwealth_UK) At the UN climate conference (COP29) in Baku, Azerbaijan, the pressure on wealthy countries to fulfill their commitments to provide financial support for developing nations in the fight against climate change has intensified. The Paris Agreement outlines the expectation that these wealthy nations will contribute substantial sums, amounting to trillions of dollars, to assist vulnerable countries in addressing the immediate and long-term impacts of climate change. These financial needs, while staggering, are not arbitrary; they reflect the severe damage already caused by climate change and the urgent need for adaptation and mitigation efforts in the Global South.
Despite the enormity of the task, one report by Christian Aid has offered a practical roadmap for how the UK, as one of the wealthier nations responsible for a significant portion of historical emissions, could meet its fair share of climate finance. First published last year, the report primarily focuses on how the UK could raise the necessary £12.6 billion to contribute to the Loss and Damage Fund, a critical component of the global climate finance architecture, operationalized at COP28 in Dubai. The purpose of this fund is to provide assistance to the most vulnerable nations already facing the devastating impacts of climate change, such as catastrophic floods, droughts, and storms that are destroying lives, economies, and infrastructure.
While the £12.6 billion loss and damage contribution is a crucial step, it represents only a part of the broader financial obligations being negotiated at COP29, where discussions are focused on the New Collective Quantified Goal (NCQG) for climate finance. This goal aims to set a global target for financing climate action, and it is clear that rich countries, including the UK, will need to contribute much more than just the amount earmarked for loss and damage.
Christian Aid’s report suggests several innovative yet feasible measures to raise the necessary funds without burdening ordinary citizens. The principle underlying these proposals is that the financial responsibility should fall on the biggest polluters, those most responsible for the climate crisis. The UK government, for instance, could implement a tax on the excess profits of fossil fuel companies, which have seen record profits in recent years. The proposal suggests a 95 percent tax rate on these excessive profits, which could generate an estimated £13 billion. This would be a direct way of holding the fossil fuel industry accountable for its role in driving climate change.
In addition to the polluter producers’ tax, another significant revenue source could come from a national Net Wealth Tax. The Wealth Tax Commission has outlined a proposal for a 0.5 percent tax on the wealthiest individuals, which could raise around £15 billion. The advantage of this approach is that it targets the wealthiest members of society—who are often also the most significant contributors to carbon emissions through their high-consumption lifestyles and investments. This kind of wealth tax would ensure that those with the greatest financial capacity contribute more to addressing the impacts of a crisis they are disproportionately responsible for.
Furthermore, the report highlights the potential of several smaller, targeted taxes that could further contribute to the UK’s climate finance obligations. These include the existing International Air Passenger Levy, which raises around £3.5 billion annually, as well as the Emissions Trading Scheme, which contributes an additional £6 billion. Other options include an expanded Financial Transactions Tax, which could raise an estimated £6.5 billion, and the Energy Profits Levy, which generates approximately £5 billion per year. Despite their smaller scale, combining these taxes could create a more comprehensive financial strategy that focuses on those most responsible for climate damage, not the general population.
Sophie Powell, Christian Aid’s Chief of UK Advocacy, emphasized that these policy measures illustrate how rich countries like the UK can mobilize significant climate finance without resorting to regressive taxes that disproportionately affect working people. Instead, the approach is based on the “polluter pays” principle, ensuring that the financial burden of addressing the climate crisis falls on those who have made the most contributions. According to Powell, these policies could serve as a model for other wealthy nations, many of which have similarly high emissions and economic resources.
The need for climate finance in developing countries has never been more urgent. The impacts of climate change are already devastating vulnerable populations, especially in low-income nations that are least responsible for greenhouse gas emissions. Renowned economist Lord Stern and other experts released a report on Thursday, revealing that the financial needs of developing countries could surpass the billions initially discussed in previous climate negotiations, potentially reaching trillions of dollars. These countries are grappling with the effects of climate-related disasters, which are sweeping away homes, destroying infrastructure, and undermining livelihoods—often in places where the resources to rebuild are simply unavailable.
In this context, the idea that wealthy nations can contribute only partial amounts to the global climate finance effort—essentially treating their obligations as voluntary or optional—is simply unacceptable. Powell uses a stark analogy: if a reckless driver crashes into your house, they cannot afford to cover only a small portion of the repair costs or provide a loan. They are legally and morally obligated to pay for the full extent of the damage. In the same way, wealthy, polluting nations must be held accountable for the damage they have caused to the planet and must fully meet their financial obligations to help vulnerable countries recover and adapt.
The UK, under its current Labour government, has pledged to rebuild relationships with Global South governments and demonstrate a commitment to addressing the inequalities exacerbated by climate change. Powell emphasizes that action, not just words, must demonstrate this commitment. The UK, along with other developed nations, must meet their moral duty to provide climate finance—not as charity or loans that exacerbate debt burdens in developing countries, but as a vital, non-negotiable contribution to the global effort to fight climate change.
Lastly, the report stresses that private finance, while important in certain areas like renewable energy development, is not an adequate solution for addressing the loss and damage caused by climate change. Expecting returns, private investors will always have a limited role in addressing climate impacts such as adaptation, loss, and damage. Only governments can provide the necessary scale of grants, not loans or profit-seeking investments, in these areas. The proposed measures outlined in the Christian Aid report offer a viable blueprint for the UK and other wealthy nations to begin meeting these urgent climate finance needs.
While the sums involved in addressing climate change may seem overwhelming, the solutions are within reach. The UK and other developed nations can provide the financial support necessary to help vulnerable countries cope with the devastating impacts of climate change by implementing targeted, progressive measures that hold the biggest polluters accountable.
