Robin Hood comes to town

Asad Rehman

15 June 2011

Dressed up as British folklore hero, Robin Hood, youth climate activists were collaring passing delegates on their way in to the Maritim Hotel, playing host to the climate talks in Bonn. As fun as dressing up is, there was a motive behind it: to promote the 'Robin Hood Tax', known as the Financial Transaction Tax (FTT) outside of the UK. The campaign - which Friends of the Earth is part of and has gathered momentum in the UK - tries to invoke its popular namesake, who 'steals from the rich to give to the poor'

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In short, a tiny tax on financial transactions as little as one hundredth of a percent could raise as much as $650 billion per year, helping to fund the just transition to low-carbon economies in developing countries while also helping public services at home. Talking to a lunchtime press conference on the issue, Bob Baugh, from the International Trade Union Congress, said, "The tax is tiny but the annual revenues would be a great leap forward". As well as providing funding, a tax on trade in stocks, currency and derivatives could also curb destabilising financial speculation.

It's one of many options on the table to plug a gap in much needed financing from developed countries. Current pledges ($30 billion until 2012 and an aim of mobilising $100 billion a year by 2020) come nowhere near the sums needed, while most of the money that's been mobilised so far is in fact recycled oversees development aid (ODA) or money that had already been promised for something else. According to Tetteh Hormeku from the Africa Trade Network, "you cannot avoid the impression that it's repackaged aid - none of the fast start finance is new!" And when it comes to long-term financing, i.e. post-2013, the US, Japan and Canada are trying to go back on the promised $100 billion. They're currently proposing a financial 'pledge' system whereby each country decides how much it can mobilise, regardless of the total figure reached. Not only this, but the same three countries are refusing to talk about where the money's coming from. Baugh made it clear: "Finance is the central question on the road to [the next climate conference in] Durban - everyone wants it, but no one wants to talk about how to pay for it. It's time for the financial community to step up".

It's not just the FTT that can provide public finance, other innovative sources are also on the table, such as rich, industrialised countries transferring their IMF-created 'special drawing rights' (like quantitative easing but on an international scale and primarily for developed countries), the redirecting of harmful fossil-fuel subsidies, reduced spending on ballooning military budgets or taxing aviation and shipping (for more info see briefing). And in no way is this list exhaustive.

Yet the lack of available finance to save the planet when we've just spent hundreds of billions bailing out the banks shows the priorities held by our politicians and the current global economic system. It's worrying that even though there are potential solutions in front of us - and many countries are expressing a willingness to discuss them here in Bonn - we're just not getting there. Outside the UNFCCC, members of the G20 have stated their support for the FTT (especially the current President, Nicolas Sarkozy), and the IMF have said it's technically possible.

If Robin Hood and his merry men were here today, they would surely be as equally appalled with the unequal distribution of wealth as today's young activists acting in their name. While the 0.05% FTT may be more like collecting the change from down the back of the sofa if you think of the sums actually traded, along with other innovative sources it's a start in helping to begin to provide the money necessary for some of the poorest people in the world deal with the impacts of climate change - a problem caused primarily by rich, industrialised countries. If we are to ever reach the sums necessary to deal with the impacts of climate change and for poorer countries to be able to develop cleanly come Durban, we as the public can't allow our governments to ignore these innovative means of finance.