Financing Resilience and a Just Transition through Solidarity Levies and Taxation

As climate impacts intensify, countries face a growing gap between resilience needs and available finance. At the same time, governments are exploring how to accelerate the energy transition and mobilise greater investment towards it. This has been a prominent theme in discussions on roadmaps to transition away from fossil fuels, including at the First International Conference on Transitioning Away from Fossil Fuels in Santa Marta.

In this context, taxes in sectors of the economy that are polluting, or making excessive profits that drive inequality, are gaining political traction as a fair and effective means of raising new revenues for critical investments. The Global Solidarity Levies Task Force, and initiatives such as the Premium Flyers Solidarity Coalition, have been breakthroughs in maturing this agenda.

At the same time, fossil fuels remain massively subsidised and kept artificially competitive, both in terms of production and consumption. But fossil fuel exporters and importers face different traps: exporters face a dependency problem where revenues and state budgets are structurally tied to production, whereas importers are challenged by consumer subsidies that are fiscally costly but socially and politically entrenched.

For the fossil fuel transition, taxation – and wider reforms to fiscal policy including fossil fuel subsidy reform – are essential to incentivise and generate revenues for the shift to clean energy. For climate resilience, solidarity levies are a promising mechanism for unlocking new sources of debt-free finance for developing countries. Moreover, as highlighted by the Global Justice Report, effective and progressive taxation is essential for addressing the inequalities that sit at the heart of climate change. On the subsidy front, reforming fossil fuel subsidies can unlock fiscal space to dedicate resources to financing climate resilience and mitigation, among other pressing development priorities.

This event will bring together two 30-minute panels to examine these issues further. This coincides with the launch of the Global Solidarity Levies Task Force’s annual flagship report, which will set out progress and next steps for advancing taxation as a means of raising revenues for climate action and development.

Panel 1: High-Level Dialogue (30 minutes)
Moderated by Prof. Laurence Tubiana, CEO of the European Climate Foundation and Lead of the Global Solidarity Levies Task Force

This session brings together high-level representatives from a diverse group of governments that are exploring and implementing subsidy reform and taxes for financing resilience, fossil fuel transition and wider climate and development objectives.

The session will examine opportunities for regional cooperation and leadership, showcase practical implementation experiences, and discuss how solidarity levies and fossil fuel subsidy reform can unlock new and predictable sources of finance, strengthen international cooperation, and support a more resilient and equitable global financial system. It will offer a platform to share different perspectives from fossil fuel importer and exporter countries, and to explore the opportunity of domestic taxation linked to the transition away from fossil fuels.

Panel 2: Expert Panel (30 minutes)
Moderated by Luca Bergamaschi, Co-Founding Executive Director of ECCO the Italian Climate Change Think Tank

This panel will convene civil society leaders, academics and high level experts across issues of finance, subsidy reform and taxation to discuss emerging breakthroughs in the design and implementation of solidarity levies and wider reforms to fiscal policy including fossil fuel subsidy reform. It will examine how we design fiscal policies in ways that are politically viable, aligned with climate goals, and capable of surviving changes in government and public attitudes.

Drawing on the findings of the Global Solidarity Levies Task Force’s flagship report, launched at COP31, as well as insights from the Global Justice Report, the discussion will also open dialogue on the way forward for this agenda and explore how political momentum is translating into policy action. It will bring together insights from initiatives such as the Santa Marta process and the Premium Flyers Solidarity Coalition.

As climate impacts intensify, countries face a growing gap between resilience needs and available finance. At the same time, governments are exploring how to accelerate the energy transition and mobilise greater investment towards it; this has been a prominent theme in discussions on roadmaps to transition away from fossil fuels, including at the First International Conference on the Phase Out of Fossil Fuels in Santa Marta.

In this context, taxes in sectors of the economy that are polluting, or making excessive profits that drive inequality, are gaining political traction as a fair and effective means of raising new revenues for critical investments. The Global Solidarity Levies Task Force, and initiatives such as the Premium Flyers Solidarity Coalition, have been breakthroughs in maturing this agenda.

For the fossil fuel transition, taxation – and wider reforms to fiscal policy – are essential to incentivise and generate revenues for the shift to clean energy. For climate resilience, solidarity levies are a promising mechanism for unlocking new sources of debt-free finance for developing countries.

Moreover, as highlighted by the Global Justice Report, effective and progressive taxation is essential for addressing the inequalities that sit at the heart of climate change.

This event will bring together two panels to examine these issues further.