Session of the United Nations climate negotiations October 2 in Panama City. Source: International Institute for Sustainable Development
Panama is only a short hop from the Caribbean islands now home to Worldwatch Institute’s Low-Carbon Energy Roadmaps project. But, it’s a big leap from the national renewable energy strategies being developed in the Caribbean to the tense efforts just wrapping up in Panama City to agree on global climate change reduction goals.
The Panama meetings from October 1-7 marked the final preparatory negotiation before the next United Nations climate change summit convenes in Durban, South Africa from November 28-December 10. With many issues on the negotiating table, countries made surprising progress on providing funding for climate change solutions, especially in developing countries. Countries also pushed big issues like a new global climate agreement and the next stage of the Kyoto Protocol onto an already overflowing agenda for Durban.
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A financial levy similar to that proposed in the Investing in Our Future Act, called the Robin Hood Tax, is gaining support in the United Kingdom.
It’s been called The Robin Hood Tax, the Tobin Tax, and the less sexy Financial Transactions Tax or Currency Transaction Levy. According to Congressman Pete Stark (D-CA13), who introduced a bill on July 20 to create a version of it in the United States, the proper name is the even less thrilling Investing in Our Future Act of 2010 (which is at least better than calling it by its bill number, House Resolution 5783). But what is it, and what does it have to do with climate change?
Whatever the name, the concept is relatively straightforward: deduct a very small percentage (Stark’s bill suggests 0.005 percent, or five-thousandths of one percent) from the transfer of large amounts of money between people and/or companies, especially the exchange of one currency into another. The rationales for this charge are many. While the fee makes the value of a single transfer of money almost unnoticeably less (just 5 pennies off for a tourist converting 1,000 U.S. dollars to Euros), it makes the shuttling of money thousands of times between different bank accounts or currencies much costlier. That kind of back-and-forth trading happens routinely in currency speculations that, according to many commentators, contributed decisively to the recent financial crisis. Most versions of the charge would exempt small amounts of money ($10,000 each year per company or per person in the Stark bill), keeping the burden off vacationers and small-time traders while discouraging risky repetitive maneuvers by banks and hedge funds.
Just how much money could this fee raise, and where would the funds go?
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