GLOBAL: ‘With a wealth tax on the biggest fortunes, extreme poverty can be eradicated’

CIVICUS speaks about climate change, global inequality and the need for redistribution with Adrien Fabre, a France-based climate economist and founder of Global Redistribution Advocates (GRA).

GRA is a civil society organisation (CSO) that promotes public debate about three global redistribution policies that enjoy wide public opinion support worldwide – a global wealth tax, a global climate plan and a global climate assembly – and advocates towards political parties in several countries to incorporate these into their agendas and programmes.

What inspired you to become a climate economist and found GRA?

I started my PhD in economics with the goal of understanding humanity’s problems and proposing solutions. I always wanted to give voice to every human, so I naturally specialised in running surveys. Then, in the context of the Yellow Vests protests that began in 2018, I surveyed French people about their attitudes towards climate policies. This sparked interest at the Organisation for Economic Co-operation and Development (OECD), which called on me to conduct a similar survey in other countries. I seized the opportunity to ask people questions they had never been asked before, such as whether they supported a global tax on millionaires to finance low-income countries. I was amazed by the levels of support: more than 70 per cent in every country!

I ran complementary surveys in Europe and the USA. I tried asking questions differently and tested policies in which the respondents would lose money, but the results were the same: people in western countries were willing to lose a few dozen euros per month to end climate change and global poverty. Furthermore, the support is sincere: you can read this scientific article or my Twitter thread for details.

Now, if there is such strong support for global redistribution, why doesn’t anyone propose it or defend it in public debate? To advocate for global redistributive policies to transfer resources or power from high to low-income countries I launched GRA in April 2023.

What are your proposals?

We have three main proposals to promote wealth redistribution, environmental sustainability and global cooperation to address pressing global challenges. The first is a global wealth tax on individual wealth exceeding US$5 million, with half of the tax proceeds distributed to lower-income countries.

This tax would spare 99.9 per cent of the world’s population, who have wealth below US$5 million. And if the tax were just two per cent, it would collect one per cent of the world’s GDP, which is more than the GDP of all low-income countries, home to 700 million people, combined. Our proposed tax schedule is moderate: two per cent for fortunes above US$5 million, six per cent for those above US$100 million and 10 per cent for those above US$1 billion. A tax of two per cent is far lower than the interests, rents and dividends such a fortune generates.

Our second proposal is a global climate plan aimed at combatting climate change through a worldwide carbon emissions cap, implemented by a system of global emissions trading, and financing a global basic income.

This plan would enter into force as soon as signatory countries cover 60 per cent of global carbon emissions. Participating countries would enforce a cap on carbon emissions, decreasing each year and down to net zero emissions after three decades, in line with the temperature target. Each year, emissions permits would be auctioned to firms that extract fossil fuels or import them from non-participating countries, making polluters pay. To cover the cost of emissions permits, firms would increase fossil fuel prices, which would in turn encourage individuals and businesses to change their equipment or adjust their habits, eventually reducing carbon emissions. The revenues from carbon pricing would fund a global basic income estimated at US$50 per month for each person over 15.

This plan would bring a massive redistribution from countries with a carbon footprint higher than the global average – like OECD countries – to those with a lower-than-average carbon footprint, including most of Africa, South and Southeast Asia and Latin America. It includes mechanisms to encourage participation by all countries, such as a tariff on goods imported from non-participating countries in proportion to their carbon content, a provision allowing middle-income countries such as China to opt out from the mutualisation of revenues to guarantee that it would not lose from the plan while ensuring that it decarbonises with the same carbon price, and a provision facilitating the participation of subnational entities like California or the state of New York even if the federal level does not participate.

The wealth tax and the climate plan would each redistribute one per cent of the world’s GDP from high to low-income countries every year. Extreme poverty can be eradicated. The average income in a country like the Democratic Republic of the Congo would double following the transfers.

Our third proposition is that of a global climate assembly, comprised of representatives elected through proportional representation in participating nations, tasked with drafting a comprehensive treaty to address climate change globally. Before even the beginning of that experiment in democratic governance at the global scale, the assembly would bring a radical change, as the election campaign would foster a global public debate on climate justice.

Please check our website for details: each policy has its own advocacy campaign, with a fully-fledged policy proposal, a petition and a video.

Who are you targeting these proposals at, and how are you working to get the message across?

We are targeting our campaigns at policymakers, scholars, civil society and lay people. Many scholars have endorsed our proposals. GRA is a member of civil society networks in each of our policy domains, and we are hoping that key CSOs will endorse our proposals. We have already met with cabinet members of various governments, including Brazil, Colombia, France, Germany and South Africa, as well as many European Union (EU) politicians. And we are sending dozens of emails every day to get more meetings. Once we get a book on our climate plan and the scientific article finished and published, we will reach out to the public. We will publish an open letter in widely read newspapers, calling on world leaders to discuss global redistributive policies at the United Nations (UN), the G20 and climate summits.

Hopefully, we will get media attention and the movement will grow. It will help if well-known personalities, including celebrities, endorse our proposals. But it will take a social movement to make change happen, perhaps a global demonstration. Our hope is that a large coalition of political parties, CSOs and labour unions throughout the world endorse some common policies towards a sustainable and fair future – ours, or similar ones. This will likely strengthen the parties of the coalition and help them win elections. Our research shows that progressive candidates would gain votes if they endorsed global redistributive policies.

What are the prospects of these proposals being implemented in the near future?

Our proposals are getting more and more endorsements every day. The African Union just called for a global carbon price and will defend this idea in international negotiations.

But our proposal that receives the largest support is the global wealth tax. The next European Parliament elections will be held in June 2024, and left-wing parties will campaign on a European wealth tax. We have proposed that one-third of this European wealth tax would be allocated to lower-income countries outside Europe, and there are good chances that some parties will take this forward. A petition in favour of a wealth tax has recently been signed by 130 members of the European Parliament, and politicians from all parties on the left and centre endorse our proposal. However, a majority in the European Parliament would not suffice, as this proposal would require unanimity at the Council of the EU, that is, the approval of each EU government.

However, three things can help. First, Brazil will chair the G20 in 2024, and we hope that President Lula, along with other leaders, will put pressure on global north states for global redistribution. Second, it would help if US President Joe Biden included wealth taxes on the agenda of his re-election campaign. Third, the campaign for the 2024 European Parliament elections could create momentum for some countries to move forward, even if the EU does not.

I am optimistic that wealth taxes will be implemented – perhaps not in 2024, but within the next decade. However, I fear negotiations might end up being overseen by the OECD, resulting in a disappointing agreement, as happened on international corporate taxation. Negotiations on international taxation must be hosted by the UN, not the OECD. And regarding the content of the negotiations, we should be vigilant of three elements: the exemption threshold, which should not exceed US$5 million; the tax rates, which should be progressive and not too low; and the distribution of revenues, a substantial part of which must go to low-income countries.

Civil society mobilisation will be key to promoting the global wealth tax, making it a central campaign issue and turning it into effective international policy. You can help by signing our petitions, donating, or volunteering for GRA. GRA is also hiring, so feel free to contact us!

What are your hopes and expectations regarding the upcoming COP28 climate summit?

COPs sometimes bring good surprises. Last year, high-income countries finally accepted the principle of a fund to compensate vulnerable countries for the loss and damage from climate change, after 30 years of demands from the developing world.

But I don’t expect any good news this year, as the upcoming COP28 in Dubai is chaired by the CEO of the United Arab Emirates’ state oil company. More generally, I do not expect much from COPs because its decisions are made by consensus, so countries like Saudi Arabia can block any meaningful proposal. This is what led to the current system of nationally determined contributions: while all countries supposedly share the common goal of limiting global warming to ‘well below 2°C’, there are no binding commitments, no harmonised policies, no agreement on burden-sharing, and the sum of countries’ voluntary pledges is inconsistent with the common goal.

To break the deadlock, states with ambitious climate goals should start negotiations in parallel with the UN framework. I think the EU and China should start bilateral negotiations. If they put forward something like the global climate plan that we propose, countries that would benefit from it would surely accept it, and more than 60 per cent of global emissions would be covered. This would put enormous pressure on other countries to join, and particularly other OECD countries such as the USA.

Get in touch with Global Redistribution Advocates through its website or its Facebook page, and follow @GlobalRedistrib and @adrien_fabre on Twitter.