The two-day gathering of world leaders and finance bosses in France, aimed at tackling climate change and poverty, ended, but without a major announcement, on Friday, June 23, 2023.
Participants at the Paris summit on finance and climate failed to reach an agreement to create a tax on greenhouse gas emissions produced from international shipping.
French President Emmanuel Macron, who hosted the summit, said that upcoming reforms of the international finance system would be examined within the next two years.
The notion of a global tax on the greenhouse gas emissions produced from international shipping has been garnering support and could potentially be adopted at a July meeting of the International Maritime Organization.
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 given Macron a symbolic win.
“This is tax-free sector. And there’s no reason why it’s not taxed,” Macron said. However, he 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.
“A Very Constructive Suggestion”
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 not apparent as to which countries attending the summit supported the proposal, which could be an important step toward getting a heavily emitting industry to contribute to fighting climate change.
According to the International Maritime Organization, shipping is responsible for almost 3% of greenhouse gas emissions. A European Parliament report has warned that the percentage could increase dramatically by 2050.
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. However, those two proposals appear to have little support from wealthier nations.
Concrete Announcement Made During The Summit
In terms of tangible announcements made during the summit, the International Monetary Fund has made $100 billion worth of assets, namely Special Drawing Rights, available to certain vulnerable countries. The French presidency then announced that France would share 40% of its own assets from the COVID-19 pandemic.
A pair of deals were announced on the first day of the summit. French officials disclosed that Zambia reached a deal with several creditors such as China to restructure $6.3 billion in loans. Senegal also 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% 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.
Meanwhile, 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, a member 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,” she added.
