EU

Responding to the publication of the IPCC’s Working Group II report assessing climate change impacts, adaptation and vulnerability, Oxfam’s Climate Policy Lead Nafkote Dabi said:

“This catalogue of pain, loss and suffering must be a wake-up call to everyone. The poorest who have done the least to contribute to climate change are suffering the most and we have a moral responsibility to help those communities adapt.

“Inequality is at the heart of today’s climate crisis —in the little over 100 days since COP26, the richest 1 percent of the world’s population have emitted much more carbon than the population of Africa does in an entire year. The super-rich are racing through the planet’s small remaining carbon budget for limiting global warming to 1.5°C. Clearly the time has come to claw back their outsized wealth, power and consumption through wealth taxes or bans on carbon-hungry luxury goods like private jets and mega yachts.

“People living in the most affected countries do not need this report to tell them that the climate has changed. The highest price is already being paid by the cattle farmer in Somalia whose entire herd has died from thirst. By the mother sheltering in a school gym in the Philippines because her home was swept away just before Christmas.

“Regardless of how quickly governments and corporations cut carbon emissions, some warming is already baked-in from our past behaviour. It’s short sighted —and too late— to focus almost exclusively on mitigation. Billions of people need early warning systems, access to renewable energy and improved crop production now, not after we bring emissions under control.

“Only a fourth of all climate finance to vulnerable countries is for adaptation. The recent agreement at COP26 to double adaptation finance to US$40 billion by 2025 will help, but it’s nowhere near enough. The UN estimates that developing countries need US$70 billion every year to adapt, and those costs are not falling. Rich countries are overwhelmingly responsible for the climate crisis and must do more to support the poorest communities whose citizens struggle to meet their daily needs let alone prepare for the future.

“The other clear message from this report is that we are all in the driving seat. Our foot is on the accelerator and every squeeze produces more harmful gases and higher temperatures. Every ton of carbon we avoid increases the chances of a liveable planet —there is a huge difference between 1.5°C and 1.6°C of heating.

“We must adapt, and we must ensure the planet remains adaptable. Because runaway global heating will only lead to events that we cannot build back from —deaths, submerged homes, unfarmable wastelands, and mass migrations of desperate people.”

Notes:

Since COP26, the world’s richest 1 percent (79 million people) have emitted an estimated 1.7 billion tons in carbon emissions. This is more than the continent of Africa emits in an entire year, home to almost 1.4 billion people. According to the Global Carbon Project, Africa’s consumption emissions for 2019 (latest year available) were 1.03 billion tons (1.03 billion tons divided by 365 x 107 = 294 million tons emitted by Africa in 107 days). Calculations were made using Oxfam and the Stockholm Environment Institute’s Confronting Carbon Inequality report.

Recent data from Oxfam shows that the wealthiest 1 percent of humanity are responsible for twice as many emissions as the poorest 50 percent, and that by 2030, their carbon footprints are in fact set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement.

According to Boat International, the superyacht industry has largely shrugged off the COVID-19 pandemic to record a third year of consistent order book growth. The 2022 Global Order Book records 1,024 projects in build or on order, a rise of 24.7 percent on last year’s 821.

According to the Organization for Economic Cooperation and Development (OECD), developed countries provided only around US$80 billion in climate finance in 2019. While the UN Secretary-General, Oxfam and others have called for half the money to be spent on adaptation, only about a quarter of total climate finance goes to adaptation.

The UN Environment Program (UNEP) estimates that annual adaptation costs in developing countries are expected to reach US$140 to US$300 billion in 2030 and US$280 to US$500 billion in 2050.

The UNFCCC estimates Somalia could need US$48.5 billion to adapt to climate change between now and 2030. Somalia’s GDP is less than US$7 billion (2020).

Today, European ministers updated the EU’s list of tax havens. The update added no countries to the blacklist and 10 countries to the greylist.

In response, Chiara Putaturo, Oxfam EU’s tax expert, said:

“A year ago, Open Lux uncovered the secrets of tax havens existing in Europe. Eight months later, the bombshell of the Pandora Papers made headlines around the world for blowing the lid on how the super-rich use tax havens to escape their tax bills. This week, a historic leak of Swiss banking records revealed how criminals, fraudsters and corrupt politicians used the secretive Swiss banking system to stash over US$8 billion in assets. Yet, none of this made a dent in EU rules on tax havens. The updated list does not challenge the persistent weaknesses of the process which exempts EU tax havens, and leaves secrecy jurisdictions, like Switzerland and the US, and zero tax rate countries, like the Cayman Islands, off the hook. Meanwhile, poorer countries, like Tunisia and Vietnam, are at risk of being blacklisted for not complying with top-down designed standards. 

“Greylisting the Bahamas, Bermuda and the British Virgin Islands means some real tax havens will be put under the magnifying glass. However, as long as the criteria are not reviewed, these countries can continue to operate as tax havens without any repercussions and can easily be completely delisted in the next review.

“How many more tax scandals must happen before the EU commits to a real reform? The current process is full of holes, lacks credibility and fails to put an end to tax avoidance. It is time for the EU to automatically blacklist zero and low tax rate countries, and to hold EU countries up to the same level of scrutiny as non-EU countries. The EU should also not use the blacklist in the future to force poorer countries, like Nigeria and Kenya, to sign up to the unfair OECD tax deal.”

Notes

• Today, European governments published a revised EU tax havens list. The blacklist remained unchanged. The greylist added 10 countries. They are on the greylist as they fail to fulfil at least one of the criteria.
• Read Oxfam’s December 2021 tax briefing for background on why and how the EU should reform their rules on tax havens. It includes what criteria should be on the list and why the EU’s proposal to introduce a criterion requiring countries to sign up to the OECD BEPS2 tax deal is unfair to poorer countries.
• Last December, EU countries failed to agree on the reform of the Code of Conduct for Business Taxation. This failure undermines the ability to make progress in reviewing the definition of harmful tax regimes (Code of Conduct for Business Taxation) and the listing criteria (based on that definition) as put forward by the European Commission’s Communication on tax good governance.
• The current blacklist does not include a single one of the world’s 20 worst corporate tax havens identified by Tax Justice Network in 2021, nor does it include any of the world’s 15 worst corporate tax havens identified by the still relevant 2016 Oxfam analysis. Among the 12 countries in the world with a zero per cent tax rate, none are blacklisted and 6 are now greylisted.
• In previous analyses, Oxfam showed that some EU countries have characteristics of tax havens.
• On Sunday, a journalist investigation, #SuissSecrets, revealed leaked data of Credit Suisse. It shows how the bank has helped problematic customers to hide large sums of money and how this practice is embedded in the Swiss secrecy system.
• In the last year, two tax scandals have shown the weakness of the EU list: OpenLux and the Pandora Papers. OpenLux showed how tax havens exist in the EU, and the need for the EU to get its house in order. The Pandora Papers showed that some US states have become hubs of financial and corporate secrecy. The US is not compliant with the EU’s tax transparency criteria because it has not joined the Common Reporting Standard (CRS) and does not fully exchange information with other countries.
• The EU has listed several low-income countries for failing to comply with international standards. This is despite these countries not being included in the discussions to set these standards or not having the capacity to implement the requirements to avoid being blacklisted.