SDGs and climate action evidently require staggering amounts of external finance. The global community has found it challenging to keep the commitments on development finance. Given overstretched budgets and fiscal constraints, new and innovative sources of financing are needed. International Financial Transactions Tax (IFTT) can be a new and substantial source of revenue for climate action. New estimates made by the authors and reported in this Brief suggest that, even at a very marginal rate, IFTT could yield annual revenues worth US$650 billion, roughly equivalent to three and a half times the annual flows of Official Development Assistance (ODA). Besides resources for climate action, IFTT could also provide another global public good by helping curb the volatility and the disruptive consequences of short-term capital flows. In that context, this policy brief makes a case for reviving IFTT on the G20 Agenda of the current presidency and proposes a way forward.
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