(CNSNews.com) – Prompting warnings of a “global governance” push, the United Nations released a report Thursday proposing mechanisms including a global carbon tax, currency transaction tax and a “billionaire’s tax,” to finance development and global needs such as combating climate change.
The U.N. World Economic and Social Survey (WESS) says such taxes could raise more than $400 billion a year, at a time when donor countries are unwilling or unable – “in the midst of difficult financial times” – to maintain the levels of development aid necessary.
“Donor countries have fallen well short of their aid commitments and development assistance declined last year because of budget cuts, increasing the shortfall to $167 billion,” said survey author Rob Vos in a statement.
“Although donors must meet their commitments, it is time to look for other ways to find resources to finance development needs and address growing global challenges, such as combating climate change,” he said.
“We are suggesting various ways to tap resources through international mechanisms, such as coordinated taxes on carbon emissions, air traffic, and financial and currency transactions.”
The WESS is produced each year by the U.N.’s Department of Economic and Social Affairs. Voss is director of the department’s Development Policy and Analysis Division.
The proposed mechanisms in this year’s report, entitled “In Search of New Development Finance,” include:
-- Carbon Tax: A tax of $25 a ton of carbon dioxide (CO2) emitted in developed countries would raise an estimated $25 billion a year. The money could be collected by national authorities, but be earmarked for international cooperation. CO2 is the “greenhouse gas” blamed most often for climate change.
Australia’s Labor government on Sunday launched a controversial carbon tax, charging 500 major companies $23 for every ton of CO2 emitted. The conservative opposition has vowed to scrap the measure if it returns to power at the next general election.
-- Currency Transaction Tax: A tax of 0.005 percent on all trading in four major currencies – the U.S. dollar, the euro, the yen and pound sterling – would yield around $40 billion a year for international initiatives. The decades-old idea of levying a small charge on financial transactions is sometimes called a “Robin Hood tax” since it supposedly taxes rich nations to benefit poor ones.
The European Union’s executive Commission has proposed the introduction of such a tax – 0.1 percent for shares and bonds and 0.01 percent for derivatives – in the 27-member union with effect from January 1, 2014, an initiative expected to raise just over $70 billion a year. The WESS says a portion of that could be earmarked for international cooperation.
-- SDRs: Allocation of International Monetary Fund Special Drawing Rights (SDRs) could yield $100 billion a year to purchase long-term assets that could then be used for development finance. Set up in the 1960s, SDRs are used by governments and some international institutions. It is not itself a currency, but its value is based on a basket of the dollar, euro, pound sterling and yen. Some countries, including Russia, China and Brazil, have been pushing the idea of SDRs replacing the greenback as the world’s reserve currency.
-- Billionaire’s Tax: A tax of around one percent on individual wealth holdings of $1 billion or more, “with the revenue destined to finance internationally agreed global development purposes.” The WESS says this mechanism, which it estimates could raise $50 billion a year, is an option that could be explored but needs further technical elaboration.
“Realizing the potential of these mechanisms will require international agreement and corresponding political will, both to tap sources as well as to ensure allocation of revenues for development,” said Vos.
‘Unaccountable’ taxing authority
Myron Ebell, director of energy and global warming policy at the free-market Competitive Enterprise Institute, warned that the proposals were dangerous and should be opposed by “anyone who believes in our national sovereignty and opposes global governance.”
“The chief ambition of the United Nations for many years has been to increase funding for their vast bureaucracy by creating some sort of new global tax that flows automatically without any control by the U.N.’s member governments,” he said late Thursday.
“Such a taxing authority would thus be totally unaccountable to elected officials in the U. S. (or to officials in any other country for that matter),” Ebell said. “Money is power: hundreds of billions of dollars in additional annual revenue would allow the U.N. to create the institutions of global governance that are contained in several U.N. environmental treaties but that have never been realized due to lack of funding.
“For example, a global tax could be used by the U.N. to fund a global warming agency to enforce restrictions against countries using more than their ‘fair share’ of fossil energy,” Ebell said.
“If the United Nations tries to impose a global carbon tax or a tax on international currency transactions or any other tax that bypasses payments voted by the national legislatures of member countries, that is the day the United States should pull out of the U.N.,” said Phyllis Schlafly, president of the conservative Eagle Forum.
“It’s become clear that the real purpose of the U.N. is to steal the wealth of the United States and transfer it to anti-American dictators all over the world,” she added.
The WESS says climate change is an area where the potential for innovative financial mechanisms is especially high.
It points to the E.U. emission-trading (cap-and-trade) scheme – which controversially was expanded to cover aviation as of January 1 – as potentially generating $20-$35 billion annually in the coming years.
However, partly due to domestic financial pressures, most E.U. members have up to now been unwilling to commit revenue raised by the cap-and-trade system to international programs, the report says.
Germany is an exception, having committed to earmarking 15 percent of revenue raised to “international climate finance.” The WESS says if other E.U. members follow Germany’s lead, Europe’s cap-and-trade could raise $3-$5 billion a year for international purposes.
The report recognizes the political difficulties its proposals are likely to face.
“Politically, tapping revenue from global resources and raising taxes internationally to address global problems are much more difficult than taxing for purely domestic purposes,” it says.
“But like all political decisions taken for the next generation and not just for the next election, this should be assessed carefully against alternative scenarios, including the very dangerous one of continuing polarization, exclusion, confrontation and insecurity in the world.”