Why Tax Justice is Crucial to Achieving Climate Goals

By Mary Ongore – Legal Manager (Sustainable Finance)

Photo by Hermes Caruzo/COP30

In November, as the world gathered in Belém for the 30^th meeting of the Conference of the Parties to the UN Framework Convention on Climate Change (COP 30), attention centred on accelerating climate ambition, responding to intensifying climate impacts, and rebuilding trust between developed and developing countries. At the same time, over ten thousand kilometres away in Nairobi, negotiations were underway on the United Nations Framework Convention on International Tax Cooperation (UNFCITC). Although these two processes appeared unrelated, they were linked by a shared challenge: achieving a fair, well-financed transition to a low-carbon future depends not only on political commitments but on the resources, equity, and accountability that underpin them.

Given that ILP’s mission is to advance environmental and economic justice, we have been closely monitoring both developments in order to assist and advise our partners and identify the linkages between them both.

Global South Leading Governance?

The choice of Belém as the host of COP 30 was highly symbolic. Situated on the edge of the Amazon Basin, one of the planet’s most important carbon sinks, the city embodied what many called the “Forest COP”. The location of the venue also highlighted questions of justice. Millions of Indigenous peoples live in the Amazon, and their central role in protecting forests and sustaining climate stability was brought into the conversation.

Simultaneously, holding the UNFCITC negotiations in Nairobi was poignant as it signalled a break from decades of global tax governance dominated by the OECD and G20. For the first time, developing countries that have been long excluded from shaping rules that determine their ability to raise revenue were at the centre of the discussions. The proposed UNFCITC promises to institutionalise a more inclusive and transparent system of international tax cooperation, offering all countries an equal seat at the table. This evolution is not merely technical; it has the potential to have far-reaching implications for sustainable development and climate justice.

The fact that both processes were hosted in the Global South marked an important shift in global governance. It demonstrated that the voices of these countries can no longer be marginalised and that the needs and rights of their citizens must be treated with equal seriousness in international negotiations.

Areas of Convergence between COP 30 and UNFCITC

Links between COP 30 and the UNFCITC become clear when considering the persistent gap in climate finance. Developing countries continue to face major barriers in accessing predictable funding for mitigation, adaptation, and loss and damage. Furthermore, harmful tax practices, opaque financial structures, illicit financial flows, and aggressive profit shifting drain billions from public budgets every year.

Efforts to reform international tax rules are therefore efforts to expand fiscal space. Countries cannot invest in renewable energy, resilient infrastructure, or ecosystem protection if their tax bases are continually undermined. Fair taxation of multinational companies and high-net-worth individuals could unlock significant new resources for climate action. The outcomes of the UNFCITC negotiations can therefore have a direct impact on achieving the goals and commitments set out in COP 30 by ensuring that countries, particularly those in the Global South, have the financial capacity to implement necessary climate change prevention and adaptation measures.

While climate action and international tax justice are intertwined, they are still too often treated in isolation. Effective climate solutions cannot flourish where countries lack the revenue to enact them. Likewise, ambitious tax reforms must recognise the immense fiscal pressures created by climate change, particularly for those countries already facing its most devastating consequences. The emergence of the UNFCITC reflects a broader rebalancing of global governance: just as the climate regime has increasingly embraced principles of equity and common but differentiated responsibilities, tax cooperation is beginning to incorporate similar values.

The overlapping timelines of COP 30 and the UNFCITC negotiations offered a rare chance to build coherence between the two processes. That opportunity, however, was missed. COP 30 concluded with a political package lacking real commitments, while the framework convention discussions failed to link climate goals with the financing required to achieve them. The draft Convention’s references to sustainable development, especially in relation to environmental protection, were largely aspirational and not backed by any practical measures. It included neither binding environmental tax commitments nor clear duties to tax polluters, and it provided no systems for monitoring or enforcing such provisions.

Crucial issues remain unresolved including the planned phase-down of fossil fuels and the economic consequences this will have for Global South countries dependent on fossil fuel exports. Redirecting fossil fuel subsidies could free vast sums for climate action, and closing international tax loopholes would help countries reclaim revenue lost to avoidance and evasion.

The convergence of COP 30 and the UNFCITC should have underscored the fundamental truth that climate justice and economic justice are inseparable. Only by aligning global climate ambition with fairer, more inclusive systems of international taxation can the world mobilise the resources needed to secure a liveable, equitable future.

Advocacy on climate finance must now continue until there is a tangible shift. At ILP, we support our partners to fight for economic and environmental justice, providing pro bono access to justice through our network of pro bono lawyers. For more information on ILP’s work on sustainable finance and how we can help, please contact us at contact@internationallawyersproject.org.