New research by Oil Change International, titled We Can Pay For It, calculates that Global North countries could raise US$6.6 trillion annually in public funds if they taxed extreme wealth, phased out fossil fuel subsidies, and reformed global financial rules. That figure is up almost a quarter from last year’s estimate of US$5.3 trillion.
The Washington-headquartered advocacy group’s findings land as many Asian nations are struggling to finance the energy transition, with an annual climate finance shortfall of more than US$800 billion in developing Asia, according to the International Monetary Fund.
“The Global South is demanding trillions, not billions, in climate finance. This research shows it is possible – if rich countries choose to act,” the report said.
The report found that the most impactful way for the Global North to raise climate funds is through a progressive wealth tax, which could generate US$3.5 trillion a year – more than half the total calculated in the report. The next best way is to end fossil fuel subsidies and tax oil and gas exploration, which could raise US$1.1 trillion.
Cutting military budgets, which have ballooned in Europe since Russia’s invasion of Ukraine, was also cited as a way to raise climate finance, although the potential revenue was much lower, at about US$280 billion.
Measures for Global North countries to raise public funds for climate finance obligations as well as other domestic and international public interest priorities (US$). Source: Oil Change International
Oil Change International argues that these measures would begin to reverse a “massive transfer of wealth” to billionaires, fossil fuel majors and defence contractors – whom have collectively gained an estimated US$40 trillion in new wealth over the last decade. The richest 1 per cent of people accrued at least US$42 trillion in new wealth from 2015 to 2025 while fossil fuel companies posted record returns.
Bronwen Tucker, global public finance lead at Oil Change International, said the data “exposes the lie perpetuated by fossil fuel CEOs, billionaires, and war hawks that we cannot afford to pay for climate action.”
She added that countries such as Canada, Australia and the United Kingdom should also back Global South proposals for a United Nations-led reform of debt and tax governance, which will be on the agenda at this year’s UN General Assembly.
Cancelling public debt payments to lower and middle income countries could free up US$142 billion a year, the report finds.
“This agenda will free up trillions in public money each year for urgent needs like renewable energy, affordable housing, universal healthcare, and addressing climate disasters,” said Tucker. “The barrier is not money – it is political will.”
Poorer Asian countries, which are among the world’s most climate-vulnerable, are in dire need of climate finance, which has fallen well short of what was promised by rich countries in a pledge made at COP28 to fund a “fair transition” away from fossil fuels. The US’ retreat from foreign aid has put more pressure on climate funds earmarked for developing Asia.
The region is home to some of the largest recipients of multilateral climate finance, and also some of the biggest fossil fuel subsidy regimes. Indonesia, India and China together spent more than US$250 billion subsidising fossil fuels in 2023, according to the International Energy Agency. Singapore, meanwhile, has faced criticism for its carbon tax that grants major emitters hefty rebates.
