As world leaders gather this week for the G20 Summit in Cannes, France, activists around the world are calling for a Robin Hood Tax to make Wall Street pay for their role in the economic meltdown. The tax would raise much needed support to create jobs, protect public services, and fight poverty and climate change.

On Sat Oct 29, the “Occupy” movement took to the streets to support the tax, and tomorrow unions like National Nurses United, the AFL-CIO, and the United Steelworkers are taking to the streets with a related message. Their call will be focused on the position of the Obama administration, particularly Treasury Secretary Timothy Geithner, who has repeatedly objected to European efforts to put such a tax in place, even amongst a “coalition of willing” European countries.

This obstructionist position could backfire. A negligible levy on the financial sector has shown great potential to address growing inequities in the financial system and could help prevent financial crises in the future. It could even encourage some countries to move forward with the tax in spite of the administration’s position

Today, more than 34 environmental, development, and other NGOs sent a letter to the President calling on his administration to “take a bold stand against Wall Street greed and negligence and stand for accountability and economic justice by supporting European leaders’ action on a financial transaction tax.” Unions and activists in support of financial reform have been flooding the President with petitions and emails in the lead up to the G20. The chorus is rising.

If you’re in the DC area tomorrow, head out to Lafayette Square (outside the Treasury Department) at 11:30am to lend your support and join the nurses and others in their rally to Make Wall Street pay.

This blog post was written by Porter McConnell, Oxfam America policy and advocacy manager for Aid Effectiveness. It was originally posted on DevEx and has also been reposted on the Oxfam blog.

Last year in Seoul, G20 leaders made an ambitious commitment to the “Seoul Development Consensus for Shared Growth.” This week in Cannes, the global financial meltdown and Eurozone crisis are likely to dominate.

Oxfam's pre-G20 summit stunt reminded G20 leaders that the decisions they make at Cannes this week will affect people living in poverty around the world. Photo: Delphine Bedel/Oxfam France

G20 leaders estimate that 64 million more people are now living in extreme poverty as a result of the financial crisis. Meanwhile, the Organization for Economic Cooperation and Development has predicted a sharp slowdown of aid levels in the next three years.

It’s no surprise, then, that the French G20 presidency has prioritized finding “innovative sources of finance” to meet the G20’s development commitments. Earlier in the year, French President Nicolas Sarkozy asked business magnate Bill Gates to identify the most promising sources of new finance. Gates’s report will be formally presented to G20 leaders this week, but the substance was shared with G20 finance and development ministers in September.

Gates is expected to identify a financial transactions tax (FTT) as one way to make up cash, estimating an additional $50 billion raised for global development if G20 countries adopted an FTT. Sarkozy has championed the FTT, and the European Commission recently drafted legislation for a European FTT. However, U.S. Treasury Secretary Tim Geithner has taken a strong stand against a European FTT, voicing his disapproval at a September meeting of European finance ministers. Geithner’s intervention may backfire at Cannes once he realizes how much the French love getting lectured by America.

Gates will also propose to G20 leaders a surcharge on shipping emissions, so-called “bunker” fuels, as another credible and feasible option, estimating an additional $25 billion raised if the charge was adopted by G20 countries. A measure is on the table at Cannes, but the United States again appears to be playing a blocking role.

In a measure that’s getting less attention, Gates will also call on the G20 to tap into the long-term power of domestic resources for tackling poverty. Gates will ask G20 leaders to share the experience of strengthening their tax and budget systems with developing countries, supporting governments to collect in a transparent manner the revenues they need to finance investment in the health and welfare of their citizens.

The bigger question on the table in Cannes will be whether the G20 will graduate from perpetual crisis mode to taking more proactive steps to promote broad-based growth. G20 nations are facing increased pressure at home, as more than half of the world’s poor live in G20 countries, and income inequality has worsened in most G20 countries since the 1990s. The success of the Cannes summit will depend largely on the willingness of G20 leaders, including the United States, to accept Gates’s challenge and adapt to a changing world.

Victoria Marzilli is leading Oxfam International digital communications at the G20 Summit. She is Oxfam America’s New Media Specialist and will be blogging and tweeting at the G20 in Cannes November 3-4.

The G20 countries represent around 90% of global gross national product, 80% of world trade, and two thirds of the world population. Isn’t it their responsibility to make real progress during the 2-day summit in Cannes?

The big issue on this year’s agenda is the current financial crisis, which has put 64 million people into poverty. G20 members have the mandate and the means to not only resolve this problem now, but to make sustainable solutions that will help us achieve global stability and resilience. So, in the lead up to the Summit, we are putting the pressure on the G20 to make changes to our global economy that will free up new resources so that people can escape from poverty.

Join us and make your voice heard. Send a message on Twitter using #tweetG20 and let them know what they need to do! We’ll bring the 10 most creative tweets to the mass demonstration in Nice on November 1st. We’ve provided some samples below to get you inspired, but feel free to customize your message, the more creative the better!

• #TweetG20: an #FTT within #G20 countries alone could raise $50 billion/yr for development. It’s time for #FTT now!

• #TweetG20: The cost of the financial crisis can’t be the lives of people in the world’s poorest countries. #FTT #G20

• The #G20 has the power to turn a global crisis into a global opportunity! #TweetG20

Our collective voice needs to be loud and clear: it’s time for the G20 to take action!

Read more

Oxfam at the G20.

President Obama has found a new voice in recent weeks around the economy and taxes. Presumably, he’s made a new political calculation that negotiation and compromise–speaking softly–won’t deliver results. So, he’s come out with much stronger rhetoric, saying “tax the rich” and pass the jobs bill “right away.”

But, the Obama administration has always been a bit wobbly when it comes to delivering justice to the banks and financial industry. You will recall taxpayers had to bail them out the tune of $550 billion, give or take. And, you will recall, it was irresponsible risk-taking and unregulated financial confabulation by the banks and finance industry that were a central cause of the financial and economic crisis that we are still suffering under.

In his financial reform proposal, President Obama included a modest fee on “systemically important” financial entities to help cover the potential costs of future bailouts. It wasn’t very big–only about $19b, which is chicken feed in the bank bailout business. But even that little thing was stripped out of the final Dodd-Frank financial reform bill.

So today, in the midst of a slow-moving crisis with a sickly economy, high unemployment, and home foreclosures, banks and investment funds are back to their old ways–issuing massive bonuses and flogging “innovative” financial products. The banks and Wall Street are contributing nothing more to the public or to the taxpayers: “thanks for the bailout, good luck balancing the budget”.

The Robin Hood Tax can raise billions to reduce poverty around the world. Photo by Ami Vitale/Oxfam.

For months, a movement has been growing to call on the financial industry to contribute more. Variously called a Robin Hood Tax, or a financial transactions tax, it started as an idea pushed by a few activists and economist and has become a serious policy proposal. On Wednesday, European Commission President Jose Manuel Barroso proposed a new Europe-wide financial transactions tax to help cover fiscal deficits and ensure support for core needs, saying “it’s a question of fairness, it is time for the financial sector to make a contribution back to society.”

So what has President Obama had to say on this? Well, nothing really. There’s a hint that he actually likes the idea–or so it was reported in Ron Susskind’s new book on the inside of Obama administration in the financial crisis. But, all the president’s men hate the idea and have been trying to suppress it. Economic advisor Lawrence Summers is said to have quashed it within the Administration. And Treasury Secretary Tim Geithner has taken it upon himself to fly to Europe and rail against it to European finance ministers. The latter was viewed as a bit impolite.

Now there’s a sit-in protest, occupying Wall Street. The Tea Party and MoveOn are united by thinking taxpayers have been too generous with the banks and Wall Street. Why doesn’t President Obama grab a pitchfork and get in front of this mob?

See also: C’est raisonnable.

Representatives from the World Bank and IMF presented their findings from a draft report on sources of climate finance to G20 finance and development ministers on Friday. The report responds to the request of G20 Finance Ministers in exploring scaled up finance for climate change adaptation and mitigation actions in developing countries. Its recommendations significantly move the debate forward on innovative sources of climate finance and come weeks before Bill Gates is expected to deliver similar findings to the G20 leaders on sources of development finance.

The WB/IMF recommendations support the key findings of a report released by Oxfam and WWF earlier this month calling for a global carbon price in the international shipping sector. A global carbon price for shipping would raise billions of dollars for tackling climate change in developing countries. The sector transports 90 percent of world trade and contributes about three percent of the world’s greenhouse gas emissions.

A global carbon price for shipping would raise billions of dollars for tackling climate change in developing countries. Photo by Luis Galdámez/Oxfam America.

Here are a few key points made in Oxfam/WWF’s report that are generally supported in the WB/IMF recommendations to G20 leaders:

• There is a double-dividend from carbon pricing international transport – reducing emissions and raising finance. A $25/ton price on carbon will raise approximately $25 billion from shipping, reducing emissions 5-10% from the sector.

• The overall impact of a carbon price for shipping will be small. A moderate carbon price for shipping means that import costs are likely to rise by approximately 0.2-0.3%. A surcharge at that level would add 0.2% to shipping costs, or $2 on every $1,000 traded.

• Developing countries should be compensated from the revenues generated by the carbon price and revenues should support adaptation and mitigation actions. Because shipping emissions cannot practically be attributed to individual countries, a carbon price for ships must be universal. But to ensure that a scheme does not unfairly penalize developing countries, it must guarantee that there are no net costs for developing countries. Of the $25bn raised from the scheme, Oxfam/WWF recommends that approximately 40% of the revenue is used to compensate developing countries for their losses; remaining funds should finance adaptation and mitigation actions through the Green Climate Fund.

A global price on shipping emissions is technically and economically feasible and is gaining political momentum. G20 finance ministers should reach a political agreement that substantial climate finance be raised through a carbon price for international shipping, with no net costs for developing countries. This should happen in advance of the G20 summit in Cannes, France at the beginning of November and COP17 in Durban, South Africa in November/December 2011.

The G8 is in decline. After years of serving as one of the premier international platforms for international negotiation and agenda-setting, it is increasingly overshadowed by the G20, which now includes the emerging powers like China, India, and Brazil.

But the G8 has been the forum in which great leaders made great promises – at least in the development sector. The biggest example was the 2005 Gleneagles summit hosted by Tony Blair. Back then G8 leaders promised to significantly increase their foreign aid levels – with a special focus on increasing assistance to Africa. Bono approved.

Photo by Victoria Marzilli/Oxfam

Yesterday, the G8 released an “accountability report”, which attempts to show how the G8 members fared in keeping their aid promises. Not surprisingly, the report shows they did a pretty good job. Of the $50b promised in increased aid, the G8 came up with $48b, according to the report. That’s pretty good.

But….

There’s a little trick: price to ignore inflation.

It’s pretty standard to include inflation in any multi-year analysis of economics or finance. No one would want to get paid the same as they were paid in 2005. If you did, you’d be making a lot less in real (inflation-adjusted) dollars.

But the G8 has ignored standard economic analysis conventions and counted their aid delivery in nominal dollars rather than inflation-adjusted dollars. If they’d used inflation-adjusted dollars, as do other analysts of foreign aid, then the G8 aid increase would come in at $31 billion. Simply put, the G8 invents $17 billion in foreign aid out of thin air by pretending price inflation doesn’t exist.

Sad.

In the scheme of things, $17b is just 6 days of G8 military spending and less than 0.06% of their combined national income. For the money promised, every one of the 67 million children that still don’t attend primary of school could be getting an education. They also could have paid the salaries of 800,000 midwives in Africa and provided 1 million life-saving bed nets.

If the G8 want to continue to be seen as a credible voice on development, then next week at Deauville they must fulfill their existing aid commitments. The G8’s reputation is at stake – and maybe their legacy.

How the G7 have really performed since their 2005 Gleneagles commitment

Robin Hood is striking all over the world.  Campaigners are pushing for a new levy, called a financial transactions tax, to provide funding for critical development and humanitarian programs.  The campaign likens this levy to Robin Hood’s career, taking from the rich and giving to the poor.  The revenues could help donor countries avoid cutting aid programs, which seems like an inevitability given the hard economy and yawning public budget deficits.  New revenue could also help countries keep their promise to provide $100b in new funding for climate change prevention and response programs in poor countries.

Issuf Sangare, 26, loads organic fertilizer into a cart he received from his growers' cooperative in Faragouran, Mali. The Robin Hood Tax would provide new funding for development programs worldwide. Photo by Chris Hufstader/Oxfam America

French President Nicolas Sarkozy has announced his support and, as host of the G8 and the G20 this year, is pushing other countries to embrace the idea: 

« In the case of France, we believe that a very small tax on financial transactions would be fair, useful and effective…. Is it not fair, is it not understandable, is it not reasonable, reasonable to consider that those who contributed so much to a crisis of such scale should contribute a little to the development of the poor countries that were the hardest hit by the crisis? Is it totally unreasonable to say that? Personally, I believe it is reasonable. »

The FTT seems to be making some headway in Germany.  But, in the US, conventional wisdom says it’s dead-on-arrival, not least because US Treasury Secretary Tim Geithner keeps mumbling that the US won’t support it.  Of course, Sec. Geithner and President Obama did support a different levy on banks as part of the financial overhaul.  So they are not categorically opposed to taxing the financial sector more.

The bigger problem for enacting an FTT is getting it through the US Congress.   A bill has been introduced, but the votes aren’t there.  At least, not yet.

But it’s hard to see why imposing a very small tax on financial transactions should be objectionable.  Gross malfeasance in the US financial sector led the world into a deep economic crisis, obliterated as much as $50 trillion in wealth across the globe – as much as the global GDP for a year.  American households lost $14 trillion, more than a year’s worth of total income.  Yet, at the end of all of this, while we face a decade and digging out and rebuilding, the financial sector will contribute nothing more and nothing new to the recovery. The levy that Geithner and Obama proposed was stripped from the financial reform bill that passed Congress last summer.

But finding new revenue may be a necessity given the stark alternatives political leaders are facing, including cutting core government services and critical functions.  A tax set at $0.005 on financial transactions, like buying or selling stocks or options, would have a tiny impact on most citizens, unless they manage hedge funds or are high-velocity market traders.   At the same time, an FTT could raise significant new funds – perhaps more than $100b annually to offset disastrous cuts to both domestic and international programs.

As the grim reality of budget cuts begins to set in across the developed world, Sarkozy may have more luck convincing other leaders that the FTT, “c’est raisonnable.”