Proposals to slap a wealth tax on the world’s super-rich could yield $250bn (£200bn) a year to tackle the climate crisis and address poverty and inequality, but would affect only a small number of billionaire families, Brazil’s climate chief has said.
Ministers from the G20 group of the world’s biggest developed and emerging economies are meeting in Rio de Janeiro this weekend, where Brazil’s proposal for a 2% wealth tax on those with assets worth more than $1bn is near the top of the agenda.
No government was speaking out against the tax, said Ana Toni, who is national secretary for climate change in the government of President Luiz Inácio Lula da Silva.
“Our feeling is that, morally, nobody’s against,” she told the Observer in an interview. “But the level of support from some countries is bigger than others.”
However, the lack of overt opposition does not mean the tax proposal is likely to be approved. Many governments are privately sceptical but unwilling to publicly criticise a plan that would shave a tiny amount from the rapidly accumulating wealth of the planet’s richest few, and raise money to address the pressing global climate emergency.
Janet Yellen, the US Treasury secretary, told journalists in Rio that the US “did not see the need” for a global initiative.
“People are not keen on global taxes,” Toni admitted. “And there is a question over how you implement global taxes.” But she said levying and raising a tax globally was possible, as had been shown by G7 finance ministers’ agreement to levy a minimum 15% corporate tax.
“It should be at a global level, because otherwise, obviously, rich people will move from one country to another,” she said.
Only about 100 families around the world would be affected by the proposed 2% levy, she added. The world’s richest 1% have added $42tn to their wealth in the past decade, roughly 36 times more than the bottom half of the world’s population did.
The question of how funds raised by such taxation should be spent had also not been settled, noted Toni.
Some economists have argued that the idea was more likely to be accepted if the proceeds were devoted to solving the climate crisis than if they were used to address global inequality. Other experts say at least some of the money should be used for poverty alleviation.
Toni was in London last Friday for a meeting convened by energy secretary Ed Miliband of the hosts of the next two UN climate summits, Brazil and Azerbaijan. Brazil will host the Cop30 conference in the Amazonian city of Belém next year, while Cop29 will run for two weeks this November in Baku, the capital of Azerbaijan.
Miliband met Toni and Mukhtar Babayev, president of Cop29, in Lancaster House in London, along with Alok Sharma, the former Tory minister who chaired the Cop26 conference in Glasgow in 2021. Afterwards, they joined King Charles for a reception of climate and business leaders at Clarence House.
Miliband confirmed at the meeting that the UK’s climate aid contribution of £11.6bn to the developing world by 2026 would stand; the previous government had considered reneging on it. Civil society groups in the global south welcomed his announcement But Toni said the UK should go further and present a new and tougher plan for cutting emissions.
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All countries are required under the 2015 Paris agreement to present new carbon-cutting plans, known as nationally determined contributions (NDCs), early next year, well in advance of Cop30.
Toni pointed to the last Cop, in Dubai last December, when countries agreed to “transition away” from fossil fuels, in order to limit global temperature rises to 1.5C above pre-industrial levels. She praised Labour’s plans to stop licensing new oil and gas fields in the North Sea.
“We all decided together about transitioning away from fossil fuels,” she said, “and now is the time to implement what we said. Developed countries need to lead the way. Stopping financing oil and gas extraction is the first step.”
Brazil is expanding its oil and gas production and Toni argued that poorer countries should be allowed to continue to produce and use fossil fuels for some time longer while developed countries curbed theirs.
“All income for some developing countries is too vital for development,” she said. “For some economies, this is the only income they have. So we need to think of how that transition would happen.”
The UK could help through its expertise in finance: “We need to get all our creative minds on this – the UK is especially creative on finance.” she said. “We are looking forward to working with the UK government on a new financial mechanism to tackle climate, but also preserve nature.”