On 30 April 2023, ecbi Director Benito Müller made a presentation on innovative sources of financing during the first workshop on addressing loss and damage in Bonn. His presentation was on innovative finance sources, in particular on International Climate Solidarity Levies (ICSLs) for the new Loss and Damage Response Fund. Based on a recent OCP blog post, Müller proposed that such levies could be applied in the aviation and maritime sectors. As a successful precursor, he said the French solidarity levy applied on air travel and earmarked for HIV/AIDS has had no impact on French air traffic or on tourism, and has raised between 162 and 175 million Euros annually.
He looked at the history of such levies in the climate change context, including the International Air Passenger Adaptation Levy proposed by the LDCs in 2008, and highlighted that the International Air Transport Association (IATA) had made it quite clear that airlines and passengers should not have to pay for non-aeronautical-related programmes; and that thus, such a multilateral top-down approach was not viable. He also said a bottom-up approach, such as the Corporate Air Passenger Solidarity programme conceived by OCP targeting voluntary contributions by individuals and corporate entities to increase adaptation funding, was also not successful.
Proposing something in in the middle between (global) top-down and (vountary) bottom-up, Müller referred to ICSLs as “The Goldilocks Solution”, comprised of both air ticket levies (like the French solidarity levy, which has a proven track record) and maritime transport levies (for example, 10 Euro per container) introduced at the national level. He said, together, they would raise 1 billion Euros per year each in the EU alone. He explained that such levies would be simple to collect and administer and sustainable, with a steady flow earmarked for the new loss and damage fund. What is needed, he said, is for a few progressive countries to take the initiative to implement ICSLs.
Photo credit: Christina Chan, Washington DC. To watch the video of the presentation click the photograph.