Sept. 28 (Bloomberg) -- Friends of the Earth and Greenpeace joined 61 other charities, unions and campaign groups to urge U.S. Secretary of State Hillary Clinton to support a financial transaction tax to help fund the fight against climate change.
A transaction levy, or “Robin Hood Tax,” could help fund $100 billion of climate change aid that developed countries have pledged by 2020, and extend to health care and education as well, the 63 groups said in a letter yesterday to Clinton that was e-mailed today by Friends of the Earth.
“It is past time for the financial sector to pay its fair share,” the groups wrote to Clinton. “We urge you to support efforts to enact a financial transaction tax to pay for international public goods at climate change negotiations, the G20 and other important international venues.”
The groups are reviving a proposal put forward in November 2010 by a United Nations-appointed panel that included billionaire investor George Soros and Larry Summers, then director of U.S. President Barack Obama’s National Economic Council. Bolivia is among nations to support a transaction tax to generate climate funds.
The UN panel in its 2010 report said an international financial transactions tax could generate $27 billion a year, while auctions of pollution permits could raise $38 billion. Taxes on shipping and aviation, a charge on electricity and the removal of fossil fuel subsidies were other measures suggested.
Groups that signed yesterday’s letter include National Nurses United, the largest U.S. nursing union, the development charity Oxfam, Rainforest Action Network, an environmental campaign group based in San Francisco, and Raging Grannies, a protest group of older women with its origins in Vancouver, Canada.
Former U.K. Prime Minister Gordon Brown, former French President Nicolas Sarkozy and labor groups including the U.K. Trades Union have all supported the concept of a charge on international flows of money, sometimes termed a Tobin tax after James Tobin, the Nobel Prize-winning U.S. economist who first suggested the idea in 1971.
In the letter, the groups asked Clinton to use an Oct. 1 to 3 UN meeting in Cape Town on long-term climate finance to address three “misleading claims” they said have been made about the Robin Hood Tax.
Those assertions are that it would be impossible to impose globally, that it would drive financial activity offshore as people would find ways to avoid such a charge, and that the source of climate finance should be linked to carbon emissions.
“It is the exception, rather than the norm, for revenue from a tax to be directly linked to the source of taxation,” the groups wrote. “No one, for example, demands a direct link between state sales taxes and the use of that revenue.”
Financial Transaction taxes have been implemented both temporarily and permanently in more than 40 countries, including the U.S. from 1914 to 1966, according to the letter. The groups also cited the International Monetary Fund as saying the measures “do not automatically drive out financial activity to an unacceptable extent.”
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