Tax justice focus
First Quarter 2020 ■ Volume 11 ■ Issue 2

The climate issue: funding a just transition (Part 1 of 2)

Editorial by James Henry

As the climate crisis comes into ever sharper focus the question of how we pay for a just transition takes on an ever greater urgency. Plenty of voices can be heard telling us that the costs are just too high, or, more soothingly, that the market will provide. But we cannot afford despair or complacency. It is now time to make plans, and act on them.

This collection of essays is the first in a series of TJN initiatives that are intended to bring the global struggles for tax justice, financial transparency, and climate justice closer together, explore common problems and solutions, and help each other to succeed.

Up to now, for the most part these movements have each developed separately. In the last two decades they have all gained momentum and achieved quite a few important victories on their own. But so have our opponents – many of whom have turned out to be our common enemies.

By now, especially in the case of the global climate crisis, the stakes could not possibly be any higher. We are simply running out of time to solve it.

TIME’S UP!

This impending crisis is partly reflected in scientific metrics. It is also reflected in dire warnings from leading scientists, environmental NGOs, activists, and the world’s top climate policy-making bodies. But by far the most persuasive evidence is not summit declarations or data-laden graphs. It is the outcry from nature itself. It has only recently become loud and clear. The impact of climate change is no longer elsewhere: all at once, in every corner of the world, we have recently had record forest fires, air pollution, storms, floods, melting glaciers and permafrost, coral bleaching, desertification, and the accelerated loss of precious species like bees and butterflies.

As we have seen, despite some progress – especially the converging scientific and popular consensus on the existence of a global emergency, and the mobilization of activism among some NGOs and investors – it is clear that the approaches relied on up to now have run into serious limitations, relative to the task at hand.

But the kind of policy analysis and solutions that tax justice and transparency advocates have to offer is precisely what the environmental doctors should have long since ordered – had they not spent so much time under the influence of free-market ideology. With respect, there is just no substitute for the kinds of fiscal, regulatory, and transparency policies that can be only deployed by governments.

In this, the first of a two-part special edition of Tax Justice Focus, we have brought together some key policy proposals that are intended to make what is now urgently necessary possible. Laura Merrill, a renowned expert on fossil fuel subsidies sets out the sheer scale of the ongoing public sector support for an industry that is destroying the conditions of civilized life on earth. She describes how governments are successfully moving away from this ruinous practice and freeing up funds to combat climate change while improving the lives of people in the here and now. Rod Campbell of the Australia Institute unpicks the bankruptcy of the fossil fuel lobby’s rhetoric in a country that has only recently experienced terrible bushfires.

The brilliant economist Professor James K. Boyce, argues that we ought to deploy a brand new form of the carbon tax as soon as possible. His ingenious version has a chance, not only of reducing CO2 emissions, but of being politically popular. Money raised through the sale of carbon permits is redistributed as a kind of universal dividend. Those who use less carbon will receive a net income from the scheme. Eventually the carbon dividends will go away, as the system achieves its purpose of incentivising a conversion to green energy. But in principle this kind of ‘universal property rights’ might be used to reward ordinary people much more fairly for their just share of mineral rights, broadcasting rights, R&D patents, and other forms of commonwealth.

Richard Murphy’s proposals that would shift the risks being created by large corporations where they belong – onto balance sheets, so investors can take a reasoned view of the long-term profitability of companies whose activities are incompatible with human life at scale. Finally, in an interview with the Tax Justice Network, Gail Bradbrook, one of the founders of the Extinction Rebellion, reflects on the efforts of campaigners to increase the pressure on policymakers to act before it is too late, and describes how activism will proceed in the months and years ahead.

Getting these solutions adopted in a timeframe equal to the urgency of the climate crisis will require us to figure out how to tackle and defeat the shared enemies of both the environmental and tax justice movements: the world’s largest, most influential public and private fossil fuels producers, public utilities, oil and LNG shipping companies, pipeline companies, and agri-businesses, as well as the myriad of giant banks, pension funds, hedge funds, corporate investors, law firms, and accounting firms that stand behind them.

And of course all our efforts to achieve worthy objectives like tax justice and financial transparency and reform of the mythological ‘free-market system’ will be pointless unless we can count on having a habitable planet to come home to.

So, as Martin Luther King, Jr. once said, if you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.

James S. Henry is a Senior Advisor to Tax Justice Network, Global Justice Fellow at Yale University and Senior Fellow at the Columbia University’s Institute for Sustainable Investment.

In this issue
EDITORIAL

Financing Climate Justice
James Henry

FEATURES

Fossil Fuel Subsidies and Taxation: Two Sides of the Same Coin
Laura Merrill

Still a Burning Question: Fossil Fuel Subsidies in Australia
Rod Campbell

Carbon Dividends as Tax Justice
James K. Boyce

Who Are the Real Extremists Here?
An Interview with Gail Bradbrook

What’s Your SCORE? The Case for Sustainable Cost Reporting
Richard Murphy

NEWS IN BRIEF

Guest Editor: James Henry
Managing Editor: Dan Hind
Contributing Editors: John Christensen & Nick Shaxson
Design and layout: www.tabd.co.uk
Email: info(at)taxjustice.net
Published by the Tax Justice Network Ltd.
© Tax Justice Network 2020
For free circulation, ISSN 1746-7691