The paper proposes introducing globally harmonized taxes, such as wealth taxes for ultra-high net worth individuals, and a carbon tax.
The recommendations aim to help fill the US$400 billion per year SDG financing gap for the world’s 59 low-income developing countries.
The paper was prepared by the SDSN Costing and Financing Team, with inputs from the Working Group on SDG Costing and Financing, which is convened by SDSN and co-chaired with the IMF, the World Bank and the OECD.
24 September 2019: The Sustainable Development Solutions Network (SDSN) has issued the results of a study on costing and financing the SDGs in the world’s 59 low-income developing countries. It highlights a SDG financing gap of USD400 billion per year for these countries, and notes that LIDC governments will require a substantial increase in fiscal revenues far beyond what they can achieve through their own fiscal reforms.
The SDSN paper, issued on 23 September 2019, was prepared by the SDSN Costing and Financing Team with inputs from the Working Group on SDG Costing and Financing (SDG Costing Group). The SDG Costing Group is convened by SDSN and co-chaired with the International Monetary Fund (IMF), the World Bank and the Organisation for Economic Co-operation and Development (OECD).
The paper points to the importance of international cooperation to enable the LIDCs to meet the Goals. It outlines measures to help fill their financing gap including:
- mobilizing private investments in blended financing (USD50 billion);
- mobilizing increased revenues earmarked for SDG-related expenditures by closing international tax loopholes (USD50 billion);
- introducing globally harmonized taxes, such as wealth taxes for ultra-high net worth individuals (USD100 billion), financial transactions taxes (USD50 billion), and carbon taxes (USD50 billion);
- increasing and better targeting official development assistance (USD100 billion); and
- expanding private philanthropy through the Giving Pledge (USD30 billion).
The paper further proposes a policy roadmap for 2020. The roadmap calls for, inter alia: a UN General Assembly (UNGA) resolution asking UN Member States to undertake the actions needed to close the SDG financing gap; multilateral agencies such as the IMF, the World Bank, and the UN to prioritize the mobilization of additional SDG financing; supporting country-level SDG planning, budgeting and implementation; multilateral international institutions, member countries and other relevant officials and stakeholders to focus on compiling more accurate fiscal profiles of countries and assessments to meet the SDGs; and expanding the role of global funds, while ensuring that global funds are well-resourced and well-designed.
Per the paper, the ad hoc SDG Costing Group seeks to build a community of practice that can support country-level and global SDG costing and financial planning. The group – composed of approximately 60 members from various organizations – also works to mobilize best costing practices and costing tools to support lower-income countries with the preparation of budgetary frameworks, revenue strategies and development assistance strategies to achieve the SDGs. The findings of the group are expected to facilitate the work of national governments, among other actors, and inform the UNGA on matters related to the Addis Ababa Action Agenda on financing for development (FfD). It should further inform the OECD-Development Assistance Committee (DAC) on its advice to donor governments on supporting the SDGs.
The paper’s conclusions were presented during an event on ‘The Cost of Success: Identifying SDG Financing Needs and Pathways for Low-Income Countries’ that took place on 24 September 2019, at the Permanent Mission of Denmark, during the UN General Assembly’s (UNGA) high-level week. [Publication: SDG Costing & Financing for Low-Income Developing Countries]