Bridging the Climate Financing Gap: Using Tax Reform as a measure to help Governments Leave Fossil Fuels Underground
Abstract: Combatting global tax evasion has sparked interest in countries to build stronger global policies for taxation. Competing interests of countries in the Organisation for Economic Co-operation and Development (OECD) and the United Nations have been stalling efforts at establishing a global minimum tax policy. On the other hand, with continued global warming and extreme climate events, countries face strong mitigation measures and increased vulnerability, which requires massive state investment. Given that taxes fund public goods, public infrastructure and government initiatives, it is critical to investigate the role of tax havens, tax avoidance and tax evasion, how they perpetuate global vulnerability, and whether novel global tax schemes would be able to facilitate government transitions away from fossil fuels. This research used a mixed-methods approach of policy analysis of institutions, environmental goals, focusing on the relationship between taxes, tax havens, tax avoidance, tax evasion and fossil fuels. This thesis aims to utilise a critical realist and relativist theoretical framework of discourse analysis. Results indicate that there is a complex relationship between fossil fuels, taxation and evasion, and that governments cannot adequately address transitions away from fossil fuels or improve SDGs until tax avoidance through tax havens is addressed. Additional results show, funds recovered through wealth taxes and corporate minimum taxation rates can cover substantial amounts of the costs of leaving fossil fuels underground and SDGs.