World leaders and finance bosses attend the closing session of the New Global Financial Pact Summit, in Paris, on June 23.Lewis JOLY/The Associated Press
Participants at the Paris summit on finance and climate stopped short of a deal to create a tax on greenhouse gas emissions produced from international shipping.
The two-day gathering of world leaders and finance bosses, aimed at tackling climate change and poverty, ended without a major announcement Friday. French President Emmanuel Macron, who hosted the summit, said upcoming reforms of the international finance system would be assessed within the next two years.
The idea of a global tax on the greenhouse gas emissions produced from international shipping has been gaining traction and could potentially be adopted at a July meeting of the International Maritime Organization, the United Nations’ agency regulating shipping.
Some experts believe that a tax on shipping alone could raise $100-billion a year, and a strong endorsement of it in Paris would have provided Macron with a symbolic win.
“This is tax-free sector. And there’s no reason why it’s not taxed,” Macron said.
But the French president suggested that China and the U.S were not supporting the idea.
“If China and the U.S. and several key European countries are not on board, then you would put a tax in place that would not have any impact,” he added.
The money raised through taxation would be directed toward developing countries to help them deal with the challenges of climate change.
U.S. Treasury Secretary Janet Yellen called the tax “a very constructive suggestion.”
“I think I would agree with President Macron’s description of the logic of why it would be appropriate, and it’s something that the United States will look at,” she added.
It was unclear which countries attending the summit supported the proposal, which could be an important step toward getting a heavily-emitting industry to pitch in to the cost of fighting climate change.
Shipping accounts for almost 3 per cent of greenhouse gas emissions, according to the International Maritime Organization. A European Parliament report has warned that share could increase dramatically by 2050.
The gathering wrapping up in Paris had no mandate to make formal decisions, but Macron had pledged to deliver a to-do list that would be accompanied by a progress-tracking tool. Such document has not been released yet.
Several activists and non-governmental organizations had urged the summit participants to ensure that rich countries commit to debt relief for poor nations, including the cancellation of loans. A debt suspension clause for countries hit by extreme climatic events was also discussed.
To bring in more money, activists are also pushing for a tax on the fossil fuel industry and another one on financial transactions – but those two proposals appear to have little support from wealthier nations.
In terms of concrete announcements in Paris, the International Monetary Fund has made $100-billion worth of assets – called Special Drawing Rights – available to certain vulnerable countries. The French presidency then said France would share 40 per cent of its own assets from the COVID-19 pandemic.
The summit’s first day included announcements of a pair of deals. French officials said debt-burdened Zambia reached a deal with several creditors including China to restructure $6.3-billion in loans. And Senegal reached a deal with the European Union and western allies to support its efforts to improve its access to energy and increase its share of renewable energy to 40 per cent by 2030.
Many officials from poor and climate-vulnerable nations attended, with only two top leaders from the Group of Seven most developed countries – Macron and German Chancellor Olaf Scholz – in the audience.
The U.S. was represented by Yellen and climate envoy John Kerry. Other attendees included China’s Prime Minister Li Qiang, Brazil’s President Luiz Inacio Lula da Silva, European Commission President Ursula von der Leyen, World Bank head Ajay Banga and IMF President Kristalina Georgieva.
Yellen said during Friday’s closing ceremony she was pleased that the U.S. and China were able to collaborate on the fight against climate change, with Qiang also attending.
“As the world’s two largest economies, we have a responsibility to work together on global issues,” she said. “It’s something we can do and something the world expects of us.”
Her remarks came after U.S. President Joe Biden defended his harsh public remarks on China, in which he called President Xi Jinping a dictator. Biden said his words would have no negative impact on U.S.-China relations and that he still expects to meet with Xi sometime soon.
Climate activists gathered in central Paris on Friday to make polluters pay for climate damage.
“There will be no climate justice without making the polluters pay,” said Patience Nabukala, part of the Fridays for Futures Uganda activist group. “People from countries like mine, we cannot afford to lose more lives, we cannot afford to lose more properties.”