A Global Tax to Save the Climate? The Idea That Could Change Everything

In the face of the climate emergency, promises are no longer enough. Every year, the reality is the same: the ambition to preserve our planet hits a financial wall. While the impacts of climate change accelerate, funding tragically lags behind. The 2023 report from the United Nations Environment Programme (UNEP) estimates that the adaptation finance gap for developing countries is between $194 billion and $366 billion per year [1]. This is a gaping chasm, nearly eighteen times greater than current public financial flows [1].

But what if the solution lies at the very heart of the global financial system? A simple and powerful idea is re-emerging: a global Financial Transaction Tax (FTT).

The concept? To levy a tiny, almost painless, share on every financial transaction. A rate of 0.1% on the purchase of a stock, for example [2]. Individually, it's a small amount. But applied to the trillions of dollars traded every day on the markets, the potential is colossal. We are talking about hundreds of billions of dollars per year [3], enough to finally bridge the gap between our climate goals and our means.

This tax would have a dual benefit: not only would it generate stable and predictable revenue for environmental action, but it could also help stabilize financial markets that have become overly speculative [4]. It is a visionary yet pragmatic proposal to realign finance with the planet's needs.

Strengthening the Pillars of UN Climate Action

The UN already has an ecosystem of expert agencies ready to act. But their effectiveness is undermined by precarious funding, dependent on the goodwill of donor states. A global FTT could change the game by giving them the resources to match their ambitions.

United Nations Environment Programme (UNEP)

UNEP is the UN's strategic "brain" for the environment. It provides the science that informs policy decisions and sets the global environmental agenda [5].

• The Problem: Its funding model is extremely fragile. Over 95% of its funding depends on voluntary contributions [6], forcing it into a perpetual quest for funds. This precariousness prevents it from planning for the long term and tackling the root causes of environmental crises. It is in the paradoxical position of having to warn the world about a financial gap that it itself lacks the means to fill [1].

• The FTT Solution: Stable and predictable funding would free UNEP from this constraint. It could focus on its core mission: guiding the world with reliable data, strengthening environmental governance, and leading ambitious programs like the UN Decade on Ecosystem Restoration [7]. It would shift from the role of a diagnostician to that of an architect of the ecological transition.

United Nations Development Programme (UNDP)

UNDP is the UN's "boots on the ground." Present in 170 countries, it helps nations translate climate goals into concrete actions to eradicate poverty and reduce inequality [8].

• The Problem: Its position is even more precarious, as it is 100% funded by voluntary contributions [9]. This total dependence makes long-term planning almost impossible. The gap to achieve the Sustainable Development Goals (SDGs) is estimated by UNDP itself at $4.2 trillion per year [10].

• The FTT Solution: Predictable funds would allow UNDP to directly finance large-scale projects: building local capacity, accelerating the energy transition, and adapting to climate change. This would transform its ambition to provide access to clean energy for 500 million people from a distant goal into an achievable action plan [11].

Food and Agriculture Organization (FAO)

The FAO works to ensure food security in a world where climate change directly threatens harvests and agricultural systems [12].

• The Problem: Its emergency humanitarian appeals, often triggered by climate-related disasters, are chronically underfunded. In 2024, midway through the year, only 22% of the required $1.9 billion had been received, leaving millions of people without life-saving assistance [13]. This situation forces the FAO into a reactive stance, intervening after disaster strikes.

• The FTT Solution: The tax could not only fully fund these appeals but, more importantly, enable a shift to preventive action. By acting before a drought or flood is announced, the FAO could help communities protect their livelihoods, build resilience, and prevent famine—a far more dignified and cost-effective approach [14].

World Meteorological Organization (WMO)

The WMO is the guardian of global climate data. Without its observations, there are no reliable weather forecasts, no climate modeling, and no reports from the IPCC, which it co-founded [15].

• The Problem: There are critical "blind spots" in the global observation network, particularly in Africa and Small Island Developing States [16]. These gaps degrade the quality of climate models for everyone. Furthermore, its vital "Early Warnings for All" initiative, which aims to protect every human being by 2027, requires an investment of $3.1 billion that is struggling to be mobilized [17].

• The FTT Solution: Dedicated funds would fill these gaps, improving the accuracy of climate science for all. They would ensure the deployment of life-saving warning systems. Investing in WMO's infrastructure is investing in the foundations of all climate action.

United Nations Framework Convention on Climate Change (UNFCCC)

The UNFCCC is the architect of global climate negotiations, such as the COPs. It provides the framework for developing the Paris Agreement and monitoring countries' commitments [18].

• The Problem: The secretariat is in a financial crisis. Its chief, Simon Stiell, raised the alarm in March 2024, revealing that the core budget was less than 50% funded [19]. This deficit threatens the organization of the negotiations themselves and, critically, the equitable participation of delegates from the poorest countries, whose voices are essential [19].

• The FTT Solution: Stable funding would guarantee the integrity, neutrality, and effectiveness of the process. It would ensure that the voices of the most vulnerable nations are heard—a non-negotiable principle for climate justice. It would also strengthen transparency mechanisms, which are crucial for ensuring that promises are kept [20].

Conclusion: A Paradigm Shift for a Sustainable Future

The idea of a Financial Transaction Tax is not just a simple patch on a failing system. It is a proposal for transformation. It aims to create an autonomous and powerful financial engine dedicated to the common good, by having a sector that has largely benefited from globalization contribute.

By mobilizing a fraction of global financial flows, we can move from a model where UN agencies are "fundraisers" to one where they become "strategic allocators" of resources. It is a bold vision, but one that matches the scale of the challenge: that of a financial system finally realigned with sustainability goals, to build a more just and resilient future for all.

Sources

[1] UNEP (2023). Adaptation Gap Report 2023: Underfinanced. Underprepared. United Nations Environment Programme. Nairobi. https://www.unep.org/resources/adaptation-gap-report-2023

[2] CBO (2018). Budgetary and Economic Effects of a Financial Transaction Tax. Congressional Budget Office. https://www.cbo.gov/publication/54823

[3] Oxfam (2023). Time to tax financial transactions. Oxfam International. https://www.oxfam.org/en/research/time-tax-financial-transactions

[4] Schmidt, R. (2013). The Financial Transaction Tax: A European Perspective. Bruegel. https://www.bruegel.org/policy-brief/financial-transaction-tax-european-perspective

[5] UNEP. About UN Environment Programme. https://www.unep.org/about-un-environment-programme

[6] UNEP. Funding and partnerships. https://www.unep.org/about-unep/funding-and-partnerships/environment-fund

[7] UN Decade on Ecosystem Restoration. About the UN Decade. https://www.decadeonrestoration.org/

[8] UNDP. About us. https://www.undp.org/about-us

[9] UNDP. Our funding model. https://www.undp.org/funding/our-funding-model

[10] UNDP (2024). SDG Investment Trends 2024. United Nations Development Programme. https://www.undp.org/publications/sdg-investment-trends-2024

[11] UNDP. UNDP Strategic Plan 2022-2025. https://strategicplan.undp.org/

[12] FAO. About FAO. https://www.fao.org/about/en/

[13] FAO (2024). FAO seeks USD 1.9 billion to reach 48 million people with life-saving agricultural assistance. https://www.fao.org/newsroom/detail/fao-seeks-usd-1.9-billion-to-reach-48-million-people-with-life-saving-agricultural-assistance/en

[14] FAO. Anticipatory Action. https://www.fao.org/anticipatory-action/en/

[15] WMO. Who we are. https://wmo.int/about-us/who-we-are

[16] WMO (2023). Mind the gaps in data-sparse regions. https://wmo.int/news/media-centre/mind-gaps-data-sparse-regions

[17] WMO. Early Warnings for All. https://wmo.int/initiatives/early-warnings-for-all

[18] UNFCCC. About the UNFCCC Secretariat. https://unfccc.int/about-us/about-the-unfccc-secretariat

[19] UNFCCC (2024). UN Climate Change Executive Secretary calls for urgent financial support for core budget. https://unfccc.int/news/un-climate-change-executive-secretary-calls-for-urgent-financial-support-for-core-budget

[20] UNFCCC. The Enhanced Transparency Framework under the Paris Agreement. https://unfccc.int/enhanced-transparency-framework