Globally, there is an increasing recognition of the urgency to address climate change and its far-reaching impacts. Estimates suggest that around $125 trillion will be needed by 2050 to achieve global net-zero objectives. The European Union (EU) and its Member States have been at the forefront of climate finance, contributing significantly as the world's largest provider. However, given the enormous financial requirements to support the global transition to a greener future, it becomes imperative to explore and evaluate new sources for climate finance. The EU's role can be pivotal in this regard, not only in terms of financial contribution, but also in leading and guiding multilateral initiatives and global efforts towards sustainable climate financing.
This study aims to provide actionable recommendations to the European Commission for how to make progress on selected international climate finance instruments. The study will focus on how public authorities, through taxation, levies or comparable policy instruments, can mobilise climate finance including from private entities. The potential to generate substantial revenue is one central criterion for the selection and assessment of instruments. This study looks into the following instruments:
- Fossil Fuel Extraction Levy
- Levy on Windfall Fossil Fuel Profits
- Levy on Plastic Polymers/Hydrocarbon Plastics
- Jet Fuel Levy, Kerosene Duty