Brazil proposes taxes on oil and the ultra-wealthy, and cannot be accused of staying quiet. It responds with a new document just hours before COP31 to boost climate finance: the $840 billion annual gap is no small figure and highlights the insufficiency of current commitments.
Brazil ‘strikes back’
Brazil’s plan envisions taxes on oil and billionaires while funding for climate action and the broader fight against warming remains far from meeting the needs of the Global South. The contradiction is devastating: international “good words” coexist with the “great lie” of $840 billion a year.
The Brazilian presidency of COP26 presented on November 8 a proposal to mobilize at least $1.3 trillion annually by 2035. Its ambition deserves support; meeting it will require far more than diplomatic applause.
The plan points to six funding channels and opens a decisive debate: how much should wealthy countries contribute, what responsibility falls on polluters, and who will bear the risks of attracting private capital.
Brazil proposes taxes on oil and billionaires: the time to share responsibilities
Brazil’s proposal includes taxes on large fortunes, fossil fuels, financial transactions, and aviation, among other activities. This initiative could raise up to $129 billion annually. These are potential revenues: the taxes are still years away from becoming actual receipts.
The approach challenges the current, deeply unfair allocation: vulnerable economies have to finance their protection while those who accumulate wealth or engage in polluting activities dodge adequate contribution. Climate accountability loses all credibility when it disappears from public budgets.
Even with these additional measures, the report projects flows of about $461 billion annually by 2035. Against the target of $1.3 trillion, the enormous funding gap hovers around $840 billion. This distance clearly demonstrates the inadequacy of the current course.
Public guarantees for investors: money must justify every risk
Private capital would need to multiply more than ninefold to reach $882 billion annually. To attract it, Brazil’s document proposes guarantees, insurance, and protection against exchange-rate fluctuations.
Red lines: if governments take on risks, they must demand verifiable environmental outcomes and fully transparent conditions. Mobilizing funds cannot become an excuse to push losses onto ordinary taxpayers while the profits of the big oil companies stay protected.
Public international and multilateral financing could reach up to $384 billion annually. Other solutions include carbon markets, South-South cooperation, and the reallocation of IMF Special Drawing Rights. These estimates should be interpreted within the report’s current context, avoiding the summing of maximums as if they were independently guaranteed revenues.
A compass to monitor promises that aren’t money yet
Brazil proposes taxes on oil and billionaires within a rather indicative roadmap. Unfortunately the document does not, on its own, create fiscal obligations or guarantee disbursements: it shows paths that governments will have to implement.
The proposal for a Climate Finance Action Compass aims to track the destination and use of the funds. Its usefulness will depend on not conflating commitments, disbursements, loans, and grants. Counting announcements as effective aid would be another way to gloss over failure.
The IMF estimates that explicit subsidies to fossil fuels reached a staggering figure of about $730 billion in 2024, roughly 56% of the annual climate target of $1.3 trillion.
They are different magnitudes, but they reveal that budget priorities are heading in another direction and show no sign of changing. Countries maintaining such supports must explain why sustaining fossil-fuel dependence has resources while protecting the vulnerable remains contingent on new and fleeting promises.
