By Ed King
Oxfam is leading calls for funds from a newly agreed EU financial transactions tax to be directed towards climate initiatives.
Earlier today 11 countries voted to adopt the measure, which involves a 0.1% tax rate for transactions in all types of financial instruments except derivatives (0.01% rate).
Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia all supported the motion – although one of the bloc’s largest economies the UK did not.
Together they make up 90% of Eurozone GDP, and 66% of EU GDP. Oxfam estimate the tax can raise €37 billion a year.
€37bn a year represents €101 million a day, €4.2m an hour; €70,000 a minute and €1,173 a second (Oxfam)
Reacting to the vote Nicolas Mombrial, Oxfam’s EU policy adviser called on those involved to ensure the tax lives up to its ‘Robin Hood’ moniker and helps fund climate and other development projects.
“This historic vote sends a clear message Europe’s biggest economies are ready to make the financial sector pay to clear up the mess it helped to cause. It is an example the rest of Europe and the world should follow,” he said.
“It will only be a Robin Hood Tax if a big chunk of the estimated €37 billion annual revenue is used to help poor people at home and abroad who have been hit hardest by the economic crisis and climate change.”
Oxfam are calling for a quarter of this sum to be allocated to the Green Climate Fund (GCF), which could guarantee an annual predictable replenishment of almost €10 billion.
The GCF’s aim is to help fund low-emission and climate-resilient development, particularly in poorer countries, which are more vulnerable to extreme weather events.
To put this in context, Accenture released a report yesterday saying that $700 billion needs to be invested annually to 2030 to avoid the world warming above 2°C, a level scientists say could be catastrophic.
Speaking at today’s press conference, Algirdas Šemeta, Commissioner responsible for Taxation and Customs Union, Audit and Anti-fraud said the EU Commission would now work on ‘substantive’ issues in the next few weeks, and determine where the funds would be used.
“I will present the substantive proposal on the FTT within the next few weeks – drawing largely on our original proposal, as has been requested of us. It will then be for these 11 Member States to take the reins, and discuss and agree this FTT they want to implement,” he said.
“The considerable new revenues it will generate can be used for growth-friendly investment, and to support wider policy commitments such as development.”
The USA argued against the imposition of a transaction tax at the recent UN talks in Doha, arguing that it was “almost impossible to impose globally” and could drive “activity to offshore havens”.
The Philippines also raised objections, claiming it would be an “unpredictable” source of climate finance as not all of the revenues would be directed towards the GCF.
RELATED VIDEO: Tim Gore, Policy Advisor for Oxfam International explains how a financial transaction tax and a tax on emissions from international aviation and shipping are vital to generate funds to tackle climate change