140+ economists and experts call on Paris Summit leaders to redirect trillions in public money

Today, ahead of the June 22-23 “Summit for a New Global Financial Pact” in Paris, 140+ economists and policy experts including Jason Hickel, Jwala Rambarran, Alyssa Battistoni, and Yanis Varoufakis sent an open letter calling on Global North leaders to ensure real global financial system transformation is on the Summit’s agenda, starting by redirecting trillions each year from fossil fuels, unfair colonial debts, and the super rich.

The Summit’s stated goal is “building a new contract between the countries of the North and the South to address climate change and the global crisis.” In light of reporting that the Summit is off track to deliver, signatories argue Global North governments who hold both an outsized say in the global financial architecture and an outsized historic responsibility for climate change must come to the Summit ready to pay their fair share.

Tax on extreme wealth would yield about $2.5 trillion a year. Combined with two other key measures — canceling public external debts in lower income countries and ending fossil fuel handouts and instead making companies pay for their damages — Global North leaders can slow global crises while raising $3.3 trillion a year to address them.

Oil Change International experts and letter signatories provided the following statements:

Bronwen Tucker, Global Public Finance co-lead at Oil Change International: “Governments must stop propping up fossil fuels and make polluters pay their fair share of damages. While low income households around the world have been pushed further into poverty over the last two years, oil and gas companies made record profits and wealthy countries continued to heavily subsidize them. There is no room – or credibility – for further “we can’t pay for it” excuses. At the Paris Summit, Global North leaders have the opportunity and the historic responsibility to redistribute these profits to power a fair transition for a livable future.”

Jason Hickel, Professor, ICTA-UAB: “Stopping climate breakdown is not rocket science. Governments need to stop subsidizing fossil fuel companies; international banks need to cancel the external debts of global South countries; and we need to tax extreme wealth. These steps would liberate trillions of dollars for public investment to achieve democratically ratified social and ecological objectives. Recent research shows that millionaires alone are on track to burn 72% of the remaining carbon budget for 1.5 degrees. This is an egregious assault on humanity and the living world, and none of us should tolerate it. We need to understand that it is dangerous to continue supporting an over-consuming elite in the middle of a climate emergency.”

Jwala Rambarran, Caribbean Policy Development Centre (CPDC): “While the Paris Summit signals a welcome willingness of the Global North to collaborate and cooperate with the Global South on international economic issues, we caution that lofty rhetoric and good intentions will not be enough to create a truly inclusive, resilient and sustainable global financial system fit for purpose in the twenty-first century. For that, we are of the firm belief that deep, systemic reform is needed, not tinkering on the edges of markets and multilateral institutions, as has been the usual practice.”

Maxime Combes, Economiste à l’Aitec: For years, economists have been calling for “shifting the trillions” to finance climate policies, both in terms of mitigation and adaptation: even today, in 2023, despite so many promises over the past 30 years, the trillions are still financing the deluge rather than hope. It’s high time for a shift.

Nezir Sinani, Recourse: “Defunding fossils, debt cancellation, and taxing the rich alone would raise at least $3 trillion a year. But a handful of wealthy governments hold most of the levers to make this happen. The Paris Summit won’t work unless they come ready to pull them, and to hand over the controls to build a democratic and transformative financial system fit for the crises we face.”

Richard Heede, Climate Accountability Institute & Climate Reparations Initiative: “As we see the escalation of climate harms around the world it is high time for the wealthy states to make good on their 1992 UNFCCC commitment to “protect the climate system for the benefit of present and future generations.” In addition, the wealthy fossil fuel companies that have acted in concert to delay action and perpetuate the carbon economy should also contribute substantially to an Atmospheric Trust to aid the nations and peoples who have contributed little to the climate emergency.”

Pedro Alarcón, JLU Giessen: “The energy transition underway is triggering enhanced mineral extraction in the Global South for the sake of ‘green’ technologies, and is paradoxically causing boosted fossil fuel extraction to cope with the current energy crisis in flat contradiction of the Paris Agreement. The Global North is hence provoking “reloaded extractivism”. A global just energy transition requires international solidarity alongside the recognition that as demand for raw material by the Global North continues to increase, so will extractivism and nature devastation in the Global South.”

Ogutu Keroboto B. Za’Ngoti, Dedan Kimathi University of Technology: “As time flies, more people than ever are struggling to afford basic needs and global warming disasters intensify. People power has pushed climate reparations firmly onto the international political agenda. But the Paris Summit being held is not enough — we need rich nations to put real public money and financial system transformation on the table. In fact, in tackling the global warming scourge, we should put more emphasis on the human dimension — for the beauty of humanity never dies — than on technology.”

Alex Lenferna, Nelson Mandela University, Climate Justice Coalition: “Countries in the global south are drowning in debt, which is driving austerity and undermining our ability to respond to the climate crisis. Climate finance cannot be in the form of more loans, deepening debt, and devastating austerity for the global south. We need much more public money to drive a truly just transition. The global north must pay their climate debt, and not use climate finance as a wolf in sheep’s clothing that advances their interests through green structural adjustment.”

Mark Paul, Rutgers University: “Global North leaders saying they ‘can’t afford’ to address global crises is the oldest excuse in the book, and simply put, a lie. Indeed, what’s truly unaffordable is the status quo. We can’t afford to let austerity politics infect the Paris Summit or the other multilateral negotiations on climate reparations to come. The truth is there is no shortage of public money that can be dedicated to the cause; there’s only a lack of political will at the moment—but that must change if we are to meet the moment.

Philippe Delacote, INRAE and Climate Economics Chair: “In order to effectively address climate change, it is imperative that the financial system ceases to support fossil fuel extractions. Simultaneously, substantial funding is necessary to ensure equitable and effective climate change adaptation, safeguarding the most vulnerable individuals and ecosystems. To promote efficiency and fairness, a critical shift must occur from the highly funded and polluting sectors and individuals, redirecting resources towards sectors and populations that need it the most.”

Michael Iveson, ODI Fellow and Research Fellow at Lakshman Kadirgamar Institute of International Relations and Strategic Studies: “Debt service payments out of developing countries dwarf aid and loan payments going in the other direction. Capital is flowing uphill and is draining resources from developing countries. If Global North governments are serious about empowering the Global South to join in the fight against climate change, they must commit to reforming the global financial architecture.”

Sohanur Rahman, Executive Coordinator, YouthNet for Climate Justice. Youth Delegate to Paris Summit from Bangladesh: “More people than ever are struggling to afford basic needs and climate disasters intensify and people power has pushed climate reparations firmly onto the international political agenda. But the Paris Summit being held is not enough — we need rich nations to put real public money and financial system transformation on the table.”

Dr. Ioannis Tsipouridis, MUST University, Meru Kenya: “The Global South has always been vulnerable to extreme weather events, simply because it never had the means to build infrastructures and create emergency and support services, as it has always been in heavy debt. The climate crisis has exacerbated an already bad situation and is getting worse by the hour devastating the lives of poor innocent people.”