The international community has repeatedly acknowledged the importance of supporting impoverished nations in coping with the consequences of climate change. However, their efforts have fallen short, with only a fraction of pledged funds being raised for this purpose. Nobel laureate Esther Duflo has put forward a solution: implementing a tax on the world’s wealthiest individuals to ensure the survival of the poorest amidst a climate-altered future.
Presented at a recent Group of 20 nations meeting in Washington, D.C., Duflo’s proposal aims to generate public funding to protect the most vulnerable populations from the impacts of climate change-induced disasters. This initiative involves implementing a global 15% minimum tax on multinational corporations’ profits, alongside a 2% income tax on billionaires, as proposed by Brazil.
Duflo argues that the moral obligation to address climate change lies with affluent nations, as they have historically been the largest emitters of greenhouse gases. She estimates this moral debt to be approximately $518 billion annually, based on the disproportionate impact of climate change on low-income countries and the statistical value of human life.
Esther Duflo (Credits: Bloomberg)
Public support for such measures is significant, with a majority in the U.S. and Europe backing the idea of taxing millionaires globally. Duflo’s proposal suggests that these taxes could generate approximately $400 billion each year, primarily directed toward mitigating climate change-induced disasters in impoverished nations.
While the global minimum tax on corporations has already been approved by the G20, the proposed income tax on billionaires awaits further negotiation. Figures like Warren Buffet have voiced support for such measures, emphasizing the need for proportional taxation regardless of wealth.
Duflo advocates for direct cash transfers to individuals and local authorities as the primary means of utilizing these funds, citing their effectiveness in alleviating poverty and providing resources during climate-related crises. Additionally, advancements in technology could facilitate the automation of these transfers to vulnerable populations.
Duflo’s proposal represents one of the most substantial climate relief funding packages on a global scale. The next steps involve further discussions within the G20, which holds considerable influence over the global economy and population.
