OK, I am a G20 news geek. And this week is especially chock full of firsts. At least rhetorically, taxing the super rich has just gained the status of a viable global policy, with G20 finance ministers and central bankers agreeing to work on the idea, as well as on how to cooperate to stop tax avoidance. A tax on wealth appears to be seen as the low hanging fruit to help bridge the multiple gaps and holes in funding climate and poverty alleviation initiatives.
I’ll leave the math of whether this would actually help to the number lovers out there, but from the ethical side of things, it is hard to dispute the concept of paying more if you have more. (And I naively want to believe that everyone, rich or poor, would prefer to live in cities and nations where street lights work, police and teachers have livable wages, waste management works, etc — those things the ever so maligned taxes pay for. )
This week’s G20 myriad events also include the unprecedented meeting of social and finance track practitioners. Central bankers and finance ministry’ deputies listening to civil society — from women’s issues to favela dwellers and business leaders — taking notes on recommendations coming not from economics and finance books, but from people dealing directly with domestic violence, flooded homes, impacted by drought or lack of sanitation, dealing with regulatory and tax norms, as well as those used to getting a “no” from lenders.
One thread connected the multiple meetings happening in Rio de Janeiro: the climate crisis. If taxing the rich is seen as a potential short-term windfall, reforming the multilateral lending system is being hailed as the best available tool to get us out of the hole we dug for ourselves when it comes to the environment. While successful nature based solutions at a local level happen despite lack of funds, a concerted, global effort to move away from fossil fuels, water-repelling pavements, retrofit factories and buildings, monocultures and predatory land use, just to name a few necessary initiatives — is not cheap. There is profit in the status quo, and change goes in the expense column.
Multilateral Development Banks catalyze private money and can help it find profit in nature-friendly projects. For U.S. Treasury Secretary Janet Yellen, some extra $200 billion could surface by tweaking that system. How to get there is not for lay people: “callable capital, SDRs, hybrid capital, and guarantee provisions” are some of the ingredients listed in this recipe, that also calls for debt relief. To be fair, the recommendations aren’t just pie in the sky suggestions. The G20 finance track is proposing a road map, a specific sequence of reforms to get there, including operational changes towards more collaboration among MDBs, improving evaluation processes as well as mapping actions with specific measures such as gender participation.
Also during this week, Brazil and U.S. agreed to work together on efforts to mitigate the impact of climate change. Then there was a joint declaration by engagement groups, the agreement around creating a Global Alliance Against Hunger and Poverty, a meeting between UAE, Azerbaijan and Brazil, the three COP hosts (28, 29 and 30) to align priorities. A smorgasbord of intentions and talks.
I only wish the G20 could yield enforceable commitments. But hey, setting targets is better than not.
Cecilia Tornaghi 