Onome Amuge

Global tax reform and climate finance are converging in a high-stakes week of diplomacy that could reshape the world’s fiscal architecture and determine how climate action is paid for in the decade ahead.

Negotiators meeting in Nairobi under the auspices of the United Nations are finalising a draft framework for a UN tax convention that could establish new global rules on taxing multinationals and the ultra-wealthy. The agreement, framed around the principle of a fair allocation of taxing rights, has the potential of unlocking trillions of dollars in public revenue, redirecting funds from tax havens towards development and climate resilience.

The talks come a few days before COP30 in Brazil, where governments will debate how to close the widening climate finance gap that has hampered progress since the 2015 Paris Agreement. The connection between the two tracks; tax justice and climate finance, has become increasingly explicit, with negotiators and campaigners arguing that without fair taxation, global climate commitments will remain underfunded and politically fragile.

“Governments claim there isn’t enough money for climate action, but as this report clearly shows, there is — it’s just in the wrong hands. The UN tax convention is a historic chance to make the richest polluters pay their fair share,” said Nina Stros, global senior policy expert at Greenpeace International. 

$500 billion lost each year

According to research compiled by the Tax Justice Network and the Global Alliance for Tax Justice, countries collectively lose nearly $500 billion a year to tax avoidance and evasion by multinationals and high-net-worth individuals. Reformers argue that stronger international tax rules could raise as much as $2.6 trillion annually; money that could be channelled into clean energy, care systems, education, and climate adaptation projects.

The proposed UN framework aims to replace the decades-old system dominated by the OECD, where advanced economies have largely set the agenda for corporate tax reform. Under the UN process, developing countries are pushing for a more equitable distribution of taxing rights, a shift that could see global profits taxed closer to where economic activity and resource extraction actually occur, rather than in corporate headquarters or low-tax jurisdictions.

“The world is at a fork in the road. One path leads to tax subjugation under Trump and US multinationals; the other leads to a collective defence of tax sovereignty at the UN. Democracy started as a fight for tax rights — no taxation without representation,” said Alex Cobham, Chief Executive of the Tax Justice Network.