Children & Youth Major Group
A lot has been said about different financing strategies. We strongly support many of
these points specifically related to the illicit flow of funds and tax avoidance & havens. In
order to add content to the discussion we would make the following points:
The current pricing and costing regime systematically excludes the economic cost of
environmental degradation caused by human action. A report titled “Natural Capital at
Risk- Top 100 Externalities” which was compiled by multiple stakeholders including the
UN, NGOs and the private sector; estimates this cost to be $7.3 trillion. This is 13% of
global economic output of 2009. No one is paying for this, specially the polluters.
The direct cost is borne by marginalized communities, which in tern creates an
environment where no sector can flourish in the long term. Business cannot succeed in a
society that fails. These costs need to be internalized and transferred to Sustainable
development activities.
Some may raise the question of such a step making progressive firms less competitive. In
such a case we need to introduce barriers against socially and environmentally
irresponsible practices.
This conversation also carries into the domain of tax reform. Ecological tax reform-
Shift the tax base from value added (labor and capital) to “that to which value is added,”
namely resource extraction and depletion, along with pollution. Such a tax shift prices the
scarce but previously un-priced contribution of nature. Value added to natural resources
by labor and capital is something we want to encourage, so stop taxing it. Depletion and
pollution are things we want to discourage, so tax them. Ecological tax reform can be an
alternative or a supplement to cap-auction-trade systems.
Such a reframing will in it self will encourage practices that promote SD, rather than the
contrary. This we believe also translates to the larger issue of viewing the economy as a
subset of the environment rather than the other way around
Lastly we welcome the E-RISC (Ecological Risk Integration to Sovereign Credit)
initiative lead by UNEP, which integrates a country’s ecological footprint into its
sovereign credit rating. The same should be extended to specific, projects and private
players.
these points specifically related to the illicit flow of funds and tax avoidance & havens. In
order to add content to the discussion we would make the following points:
The current pricing and costing regime systematically excludes the economic cost of
environmental degradation caused by human action. A report titled “Natural Capital at
Risk- Top 100 Externalities” which was compiled by multiple stakeholders including the
UN, NGOs and the private sector; estimates this cost to be $7.3 trillion. This is 13% of
global economic output of 2009. No one is paying for this, specially the polluters.
The direct cost is borne by marginalized communities, which in tern creates an
environment where no sector can flourish in the long term. Business cannot succeed in a
society that fails. These costs need to be internalized and transferred to Sustainable
development activities.
Some may raise the question of such a step making progressive firms less competitive. In
such a case we need to introduce barriers against socially and environmentally
irresponsible practices.
This conversation also carries into the domain of tax reform. Ecological tax reform-
Shift the tax base from value added (labor and capital) to “that to which value is added,”
namely resource extraction and depletion, along with pollution. Such a tax shift prices the
scarce but previously un-priced contribution of nature. Value added to natural resources
by labor and capital is something we want to encourage, so stop taxing it. Depletion and
pollution are things we want to discourage, so tax them. Ecological tax reform can be an
alternative or a supplement to cap-auction-trade systems.
Such a reframing will in it self will encourage practices that promote SD, rather than the
contrary. This we believe also translates to the larger issue of viewing the economy as a
subset of the environment rather than the other way around
Lastly we welcome the E-RISC (Ecological Risk Integration to Sovereign Credit)
initiative lead by UNEP, which integrates a country’s ecological footprint into its
sovereign credit rating. The same should be extended to specific, projects and private
players.