Global solidarity levies to finance the low-carbon transition – introducing a new negotiation simulator tool
By targeting high-emission, international activities such as shipping and aviation, introducing global solidarity levies would align environmental integrity with fiscal innovation and help close the gap in climate financing for developing countries. This commentary sets out the case and presents a new revenue simulator that assesses the real-world potential of such levies.
The question of how to finance the low-carbon transition in developing countries remains one of the defining challenges of international climate policy. Despite decades of negotiations and commitments under the UN Framework Convention on Climate Change (UNFCCC), the flow of finance from developed to developing economies continues to fall short of what is needed to meet global climate objectives. At the 2024 COP29 in Baku, governments agreed that developing economies – excluding China – require US$1.3 trillion annually by 2035 in external climate finance to meet their mitigation needs. How to close this gap will be one of the dominant issues on the agenda of COP30 in Belém (10 –21 November 2025).
Traditional mechanisms for mobilising climate finance – such as global carbon pricing, the reallocation of fossil-fuel subsidies, and official development assistance (ODA) – are proving insufficient to meet this target at the necessary scale and speed. Several structural and political economy factors limit their potential, such as weakened multilateralism, high public debt levels in high-income countries (leading them to prioritise domestic issues over international aid), and domestic political constraints on carbon taxation. Consequently, the global community increasingly recognises that innovative sources of climate finance will be essential to close the gap between ambition and delivery. Against this backdrop, we have explored one particularly promising mechanism: global solidarity levies (GSLs).
Suitability of GSLs for aviation and shipping
GSLs are internationally coordinated but nationally administered taxes earmarked for financing global public goods such as climate change mitigation and adaptation, especially in vulnerable developing countries. Unlike a single global tax, GSLs operate through coalitions of the willing, allowing national governments to collect revenues domestically while committing them to shared international objectives. Historical precedents already exist: for example, France’s airline-ticket solidarity levy introduced in 2006 to fund global health initiatives.
Interest in this concept has grown rapidly. In 2024, COP29 witnessed the creation of a Coalition for Solidarity Levies, a group of 14 countries[1] committed to “support solidarity levies as part of the solution to close the climate and development finance gap”. A Global Solidarity Levies Task Force has been examining for the Coalition a range of potential levies – e.g. on fossil-fuel extraction, aviation and maritime transport, luxury goods, digital activities, financial transactions and high-net-worth wealth.
Our analysis suggests that international aviation and maritime shipping are particularly suitable for GSLs aimed at supporting climate action (see Figure 1). This is because these sectors combine three features: (i) a clearly international character, which makes them easier to tax than domestic activities (e.g. domestic tobacco consumption or plastic production); (ii) a relatively immobile tax base (the fiscal residence of firms in these sectors is easier to identify than other activities such as international financial transactions); and (iii) high CO2 emissions intensity, which makes it more justifiable politically to spend the revenues raised on climate action rather than other causes (e.g. education or health).
Figure 1. Indicative placement of various tax bases on axes of international production and mobility (Source: Pereira da Silva et al., 2025; Note: the activities highlighted in a darker tone correspond to those where we consider that a GSL for environmental purposes is more justified; simulations for these are presented below)
A simulator to support future climate negotiations around global solidarity levies
To help policymakers and negotiators assess the real-world potential of such levies, we have developed a revenue simulator. Drawing on publicly available data, academic and grey-literature sources, and precedents from existing tax regimes, the simulator estimates the revenues that could be generated from three technically and politically feasible GSLs: a levy on maritime-shipping fuel use; a levy on aviation fuel use; and a levy on international air-passenger tickets. Users can adjust parameters such as the set of participating countries, tax rates and demand responses (i.e. how activity levels might decline in reaction to higher prices caused by the levy).
Our own simulation results show that, if implemented worldwide, GSLs on maritime shipping and aviation could raise US$100–150 billion annually under conservative assumptions and up to US$400 billion under more ambitious scenarios (see Figure 2). These amounts represent between 10 and 30 per cent of the total external climate finance needed by developing countries each year. The maritime-shipping levy alone, at a medium rate of US$100 per ton CO₂, could generate around US$104 billion under central assumptions; under more optimistic scenarios, revenues could exceed US$300 billion. Meanwhile, aviation levies – on both fuel and tickets – would together contribute a similar order of magnitude, depending on the rates applied and the elasticity of demand.
Figure 2. Combined revenues from aviation and shipping levies with ‘medium’ tax rates under various demand response scenarios (Source: Pereira da Silva et al., 2025)
Recognising today’s fractured geopolitical context, we also explore coalitions of the willing as an alternative to universal implementation. For example, if only EU member states were to adopt these levies, the resulting revenues would still be substantial: between US$41 billion (under moderate assumptions) and US$140 billion (under ambitious ones). Even this narrower coalition could therefore mobilise more than 10 per cent of the annual climate-finance goal, demonstrating that progress does not depend solely on global consensus.
The case for supporting global solidarity levies in climate negotiations
Beyond their direct fiscal potential, GSLs have significant political, economic and environmental advantages. First, in contrast to traditional climate finance and particularly in a context of geoeconomic fragmentation, they could serve as both a financing mechanism and a diplomatic bridge, aligning climate ambition with the realities of national sovereignty and domestic fiscal systems. Second, if revenues were deployed strategically – such as through multilateral funds like the Green Climate Fund – GSLs could leverage additional private investment, for example by being used as junior tranches or first-loss guarantees in blended-finance structures. Third, while the purpose is to raise revenues, well-designed GSLs may also encourage behavioural change and provide incentives for decarbonisation.
Implementing GSLs will nevertheless require careful design. Lessons from previous experience – ranging from successful cases like France’s airline levy to more difficult ones, such as the recent collapse of negotiations on a shipping levy at the International Maritime Organization (IMO) – highlight the need for international coordination to minimise avoidance and competitive disadvantage.
In sum, Global Solidarity Levies represent a concrete, technically feasible, and politically realistic tool to mobilise large-scale resources for the low-carbon transition in developing economies. By targeting high-emission, international activities such as shipping and aviation, GSLs align environmental integrity with fiscal innovation. If adopted by a growing coalition of willing countries, they could provide a stable source of climate finance amounting to hundreds of billions of dollars annually, enough to close a meaningful share of the US$1.3 trillion target needed annually by developing countries (excluding China) by 2035.
In this context, our simulator becomes not only a technical tool but also a negotiation instrument: it quantifies who contributes, who benefits and by how much, thereby enhancing transparency and coalition-building in climate-finance discussions.
Read about this topic in more detail in a new policy brief, Global solidarity levies to finance the low-carbon transition: from theory to a practical negotiation tool, published by IEP@BU.
The simulator can be accessed at: https://solidaritylevies.org/simulator/ and a more detailed version here.
The views in this commentary are those of the authors and do not necessarily represent those of CETEx senior management or its funders. Any errors or omissions remain those of the authors.
[1] These are: Barbados, France, Kenya, Antigua and Barbuda, Colombia, Denmark, Djibouti, Fiji, Marshall Islands, Senegal, Sierra Leone, Somalia, Spain and Zambia.