Franziska Mager is senior researcher and advocacy lead for climate and inequalities at the Tax Justice Network.
As the climate crisis accelerates, global fault lines widen. Wealthy nations gut aid budgets while pouring fortunes into their militaries. Their climate finance commitments ring hollow, hidden behind claims that public funds have run dry.
But the money is there – and a bold tax justice agenda can unlock it. Reclaiming tax sovereignty – the power to decide how wealth is taxed and where it goes – can shift resources from billionaires and corporate giants to real climate solutions.
Tax Justice Network analysis shows governments could raise an extra US$2.6 trillion a year by applying a modest wealth tax on the richest 0.5% and ending corporate tax abuse. This would more than cover global climate finance needs and still leave most countries with billions to invest in care, education and green jobs at home.
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The climate crisis is accelerating. Floods, heatwaves and crop failures are pushing more people into precarity. Climate adaptation, mitigation, and loss and damage could cost US$9 trillion a year by 2030. Yet the global community is still scrambling to honour a US$100 billion pledge made over 15 years ago.
As attention turns from the Bonn climate talks to the fourth Financing for Development conference in Seville, climate finance remains a structural void that policy declarations alone cannot fill.
On the road to COP30 in Belém, governments face a critical choice: keep chasing inadequate voluntary climate finance handouts, or finally confront the rigged tax systems that let the super-rich and big polluters amass obscene wealth while the planet burns.
Plugging leaky tax systems
As our research shows, fair taxes on extreme wealth and curbing multinational tax abuse could raise more than double the UN’s US$1.3 trillion annual climate finance goal for 2035. The real issue isn’t where new money comes from, but why governments let public resources leak through a broken tax system.
Applying a modest annual wealth tax of 1.7-3.5% and reclaiming tax from multinationals that underpay could unlock revenue equal to 2.4% of global GDP. This money could be raised today if governments closed loopholes and took action.
Our modelling based on countries’ historic emissions responsibility shows striking results: with a US$300 billion global climate finance fund, 89% of countries could cover their share and still have billions left for public services. Even with a US$1.5 trillion fund, 58% would contribute their fair share and have money to spare.
Take the United States. It could raise enough additional revenue to contribute US$365 billion a year towards climate finance and still be left with US$412 billion to spend at home. China, India, the United Kingdom and Brazil follow the same pattern.
This is the core message of our climate finance slider tool. Taxing extreme wealth and curbing tax abuse does not pit climate justice against development. It enables both. The interactive tool shows how much countries could raise and how much they could contribute if tax rules were rebalanced in favour of people and planet.
Governments lose tax control
So why are countries still acting like climate finance is unaffordable?
The answer lies in decades of eroded tax sovereignty. Governments have signed away their taxing rights through unfair treaties, handed out corporate tax breaks under economic coercion, and let wealth pour into secrecy jurisdictions. In doing so, they’ve stripped themselves of the power – and the will – to tax the richest and biggest polluters driving the climate crisis.
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Today, 61% of countries have an “endangered” level of tax sovereignty or worse — meaning they are failing to collect tax revenue worth at least 5% of what they already raise, largely from their richest households and from multinational corporations that underpay tax.
Nearly a fifth of countries fall into the “negated” category, missing out on the equivalent of 15% or more of their annual tax revenue. These are not natural constraints. They are political outcomes shaped by an unequal global financial system.
Across the Global South, the consequences are especially severe. Governments face impossible tradeoffs between education and adaptation, debt service and disaster response. Climate finance cannot be separated from this wider fiscal injustice.
When forced to borrow for every disaster or rely on aid pledges, governments lose both agency and time. The race to build resilience becomes a race against the clock – one they cannot win without revenue.
Wealth taxes popular with voters
It’s time to reframe the debate. Climate finance can’t rely on broken promises or voluntary pledges. It must come from fair, redistributive tax systems that reflect both capacity to pay and responsibility for emissions.
The upcoming UN Tax Convention is a once in a generation opportunity to rebalance global tax rules. Done right, it could help countries tax their richest residents and corporations fairly, ending tax havens, profit-shifting and billionaire impunity.
Comment: A global wealth tax is needed to help fund a just green transition
But we do not need to wait for negotiations to conclude. Countries can act now by introducing wealth taxes, renegotiating exploitative tax treaties, increasing transparency and aligning fiscal policies with climate goals.
These reforms are not only possible. They are popular. Polling consistently shows widespread support for taxing extreme wealth to fund public goods.
Extreme wealth fuels climate inaction, rising debt and inequality. In a world on fire, refusing to tax those who profit most is no longer neutral – it’s a global risk.
