France, Africa want to tax banks to finance climate

France, Nicolas Sarkozy

France and Ethiopia, representing Africa, have called for a global tax on financial transactions to help finance climate mitigation and adaptation measures in poor countries beyond 2012. They also want taxes on sea freight and air transport.

The tax on financial transactions, also known as the Tobin tax, is one of several proposals – some old, some new – in a joint statement made by France and Ethiopia on Tuesday. The call was immediately backed by UK prime minister Gordon Brown.

French president Nicolas Sarkozy, Barack Obama, Angela Merkel and Gordon Brown had a joint telephone conversation on Tuesday to discuss divisive issues such as climate financing. "If we don't have this [Tobin] tax, who is going to pay?" asked Mr Sarkozy at a press conference in Paris.

Europe and Africa agree on the amount of funds needed to tackle climate change in developing countries, Mr Sarkozy said. The US must contribute to the proposed €7.2bn in "fast start" financing for 2010-12, and the annual €100bn needed by 2020, he stressed.

The French and Ethiopian leaders said 40% of fast start funds should go to Africa, and that 20% should be dedicated to measures for reducing emissions from deforestation and forest degradation, known as REDD, a proposal made by Mr Sarkozy earlier this year.

The two leaders also called for an "ambitious reform of global governance" as part of the UN climate talks. They want Copenhagen to "launch a process leading to the establishment of a World Environment Organisation", an idea France has pushed for several years.

Follow Up:

French-Ethiopian position on climate change. See also Mr Brown's comments on the tax on financial transactions.