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COP 29 leaders demand over a $1 trillion a year in climate reparations from ‘wealthy’ nations. They don’t deserve a nickel.

Published

4 months ago

12 minute read

From Energy Talking Points

The injustice of climate reparations

COP 29 is calling for over $1 trillion in annual climate reparations

  • A major theme of COP 29 is that the world should set a “New Collective Quantified Goal” wherein successful nations pay poor nations over $1 trillion a year to 1) make up for climate-related harm and 2) build them new “green energy” economies. In other words, climate reparations.¹
  • What would $1 trillion a year in climate reparations mean for you and your family?Assuming the money was paid equally by households considered high income (>$50 per day), your household would have to pay more than $5,000 a year in climate reparations taxes!²
  • Climate reparations are based on two false assumptions:1. Free, wealthy countries, through their fossil fuel use, have made the world worse for poor countries.

    2. The poor world’s main problem is dealing with climate change, which wealth transfers will help them with.

But free, fossil-fueled countries have made life better for poor countries

  • Free, wealthy countries, through their fossil fuel use, have not made the world worse for poor countries—they have made it far, far better.Observe what has happened to global life expectancies and income as fossil fuel use has risen. Life has gotten much better for everyone.³
  • The wealthy world’s fossil fuel use has improved life worldwide because by using fossil fuel energy to be incredibly productive, we have 1) made all kinds of goods cheaper and 2) been able to engage in life-saving aid, particularly in the realms of food, medicine, and sanitation.
  • Without the historic use of fossil fuels by the wealthy world, there would be no super-productive agriculture to feed 8 billion humans, no satellite-based weather warning systems, etc. Most of the individuals in poor countries would not even be alive today.

Free, fossil-fueled countries have made the poor safer from climate

  • The wealthy world’s fossil fuel use has been particularly beneficial in the realm of climate.Over the last 100 years, the death rate from climate-related disasters plummeted by 98% globally.

    A big reason is millions of lives saved from drought via fossil-fueled crop transport.⁴
  • The “climate reparations” movement ignores the fact that the wealthy world’s fossil fuel use has made life better, including safer from climate, in the poor world.This allows it to pretend that the poor world’s main problem is dealing with rising CO2 levels.

The poor world’s problem is poverty, not rising CO2 levels

  • The poor world’s main problem is not rising CO2 levels, it is poverty—which is caused by lack of freedom, including the crucial freedom to use fossil fuels.Poverty makes everything worse, including the world’s massive natural climate danger and any danger from more CO2.
  • While it’s not true that the wealthy world has increased climate danger in the poor world—we have reduced it—it is true that the poor world is more endangered by climate than the wealthy world is.The solution is for the poor to get rich. Which requires freedom and fossil fuels.⁵

Escaping poverty requires freedom and fossil fuels

  • Every nation that has risen out of poverty has done so via pro-freedom policies—specifically, economic freedom. 

    That’s how resource-poor places like Singapore and Taiwan became prosperous. Resource-rich places like Congo have struggled due to lack of economic freedom.

  • Even China, which is unfree in many ways (including insufficient protections against pollution) dramatically increased its standard of living via economic freedom—particularly in the realm of industrial development where it is now in many ways much freer than the US and Europe.
  • A crucial freedom involved in rising prosperity has been the freedom to use fossil fuels.Fossil fuels are a uniquely cost-effective source of energy, providing energy that’s low-cost, reliable, versatile, and scalable to billions of people in thousands of places.⁶
  • Time and again nations have increased their prosperity, including their safety from climate, via economic freedom and fossil fuels.Observe the 7X increase in fossil fuel use in China and India over the past 4 decades, which enabled them to industrialize and prosper.⁷
  • For the world’s poorest people to be more prosperous and safer from climate, they need more freedom and more fossil fuels.The “climate reparations” movement seeks to deny them both.
  • The wealthy world should communicate to the poor world that economic freedom is the path to prosperity, and encourage the poor world to reform its cultural and political institutions to embrace economic freedom—including fossil fuel freedom.Our leaders are doing the opposite.

Climate reparations pay off dictators to take away fossil fuel freedom

  • Instead of promoting economic freedom, including fossil fuel freedom, wealthy climate reparations advocates like Antonio Guterres are offering to entrench anti-freedom regimes by paying off their dictators and bureaucrats to eliminate fossil fuel freedom.This is disgusting.⁸
  • The biggest victim of “climate reparations” will be the world’s poorest countries, whose dictators will be paid off to prevent the fossil fuel freedom that has allowed not just the US and Europe but also China and India to dramatically increase their prosperity.
  • The biggest beneficiary of “climate reparations” will be China, which is already emitting more CO2 than the US and Europe combined. (Though less per capita.)While we flagellate and cripple ourselves, China will use fossil fuels in its quest to become the world’s superpower.⁹
  • The second biggest beneficiary of “climate reparations” will be corrupt do-gooders who get to add anti-fossil-fuel strings to “reparations” dollars and dictate how it’s spent—which will surely include lots of dollars for unreliable solar panels and wind turbines made in China.

Leaders must reject reparations and champion fossil fuel freedom

  • We need leaders in the US and Europe who proudly:1. Champion the free world’s use of fossil fuels as an enormous good for the world, including its climate safety.

    2. Encourage the poor world to embrace economic freedom and fossil fuels.

    Tell your Representative to do both.

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1  Scientific American – COP27 Summit Yields ‘Historic Win’ for Climate Reparations but Falls Short on Emissions Reductions
2  Global population was about 8.02 billion in 2023.

World Bank data

About 7% of world population are considered high income, which translates into about 562 million individuals. Considering 3 people per average household in high income households, this translates into about 187 million households.
Pew Research – Are you in the global middle class? Find out with our income calculator

$1 trillion per annum paid by 187 million households means the average household would pay about $5,300 per year.

3  Maddison Database 2010 at the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen
4  UC San Diego – The Keeling Curve

For every million people on earth, annual deaths from climate-related causes (extreme temperature, drought, flood, storms, wildfires) declined 98%–from an average of 247 per year during the 1920s to 2.5 in per year during the 2010s.

Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).

Population estimates for the 1920s from the Maddison Database 2010, the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, population is assumed to have grown at a steady rate.

Population estimates for the 2010s come from World Bank Data.

5  UC San Diego – The Keeling Curve

Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).

Population estimates come from World Bank Data.

6  Our World in Data – Energy Production and Consumption
7  BP – Statistical Review of World Energy
8  UN News – ‘Pay up or humanity will pay the price’, Guterres warns at COP29 climate summit
9  Our World in Data – Annual CO₂ emissions from fossil fuels, by world region
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Published on March 28, 2025

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From Larson’s Political Economy

Sven R Larson

The Trump administration’s new tariffs are working:

The European Union will delay tariffs on U.S. exports into the trading bloc in response to the imposition of tariffs on European aluminum and steal, a measure announced in February by the White House as a part of an overhaul of the U.S. trade policies.

Instead of taking effect March 12, these tariffs will not apply until “mid-April”, according to a European official interviewed by The Hill.

This is not the first time the EU has responded this way to U.S. tariff measures. It happened already last time Trump was in office. One of the reasons why Brussels is so accommodative is that the European Parliament emphasized negotiations already back in February. Furthermore, as Forbes notes,

The U.S. economy is the largest in the world, and many countries rely on American consumers to buy their goods. By import tariffs, the U.S. can pressure trading partners into more favorable deals and protect domestic industries from unfair competition.

More on unfair competition in a moment. First, it is important to note that Trump did not start this trade skirmish. Please note what IndustryWeek reported back in 2018:

Trump points to U.S. auto exports to Europe, saying they are taxed at a higher rate than European exports to the United States. Here, facts do offer Trump some support: U.S. autos face duties of 10% while European cars are subject to dugies of only 2.5% in the United States.

They also noted some nuances, e.g., that the United States applies a higher tariff on light trucks, presumably to defend the most profitable vehicles rolling out of U.S. based manufacturing plants. Nevertheless, the story that most media outlets do not tell is that Europe has a history of putting tariffs on U.S. exports to a greater extent than tariffs are applied in the opposite direction.

Larson’s Political Economy is a reader-supported publication.

To receive new posts and support my work, consider becoming a free or paid subscriber.

Facts notwithstanding, this trade war has caught media attention and is reaching ridiculous proportions. According to CNBC,

Auto stocks are digesting President Donald Trump’s annoncement that he would place 25% tariffs on “all cars that are not made in the United Sates,” as well as certain automobile parts. … Shares of the “Detroit Three” all fell.

They also explain that GM took a particularly hard beating, and that Ferrari is going to use the tariffs as a reason to raise prices by ten percent. This sounds dramatic, but keep in mind that stocks fly up and down with impressive amplitude; what was lost yesterday can come back with a bonus tomorrow. As for Ferrari, a ten-percent price hike is basically meaningless since these cars are often sold in highly customized, individual negotiations before they are even produced.

Despite the media hype, these tariffs will not last the year. One reason is the retaliatory nature in President Trump’s tariffs, which—again—has already caught the attention of the Europeans and brought them to the negotiation table. We can debate whether or not his tactics are the best in order to create more fair trade terms between the United States and our trading partners, but there is no question that Trump’s methods have caught the attention of the powers that be (which include Mexico and Canada).

There is another reason why I do not see this tariffs tit-for-tat continuing for much longer. The European economy is in bad shape, especially compared to the U.S. economy. With European corporations already signaling increased direct investment in the U.S. economy, Europe is holding the short end of this stick.

But the bad news for the Europeans does not stop there. They are at an intrinsic disadvantage going into a tariffs-based trade war. The EU has a “tariff” of sorts that we do not have, namely the value-added tax, VAT. Shiphub.co has a succinct summary of how the VAT affects trade:

When importing (into the European Union), VAT should be taken into account. … VAT is calculated based on the customs value (the good’s value and transport costs … ) plus the due duty amount.

The term “duty” here, of course, refers to trade tariffs. This means that when tariffs go up, the VAT surcharge goes up as well. Aside from creating a tax-on-tax problem, this also means that the inflationary effect from U.S. imports is significantly stronger than it is on EU imports to the United States—even when tariffs are equal.

If the U.S. government wanted to, they could include the tax-on-tax effect of the VAT when assessing the effective EU tariffs on imports from the United States. This would quickly expand the tit-for-tat tariff war, with Europe at an escalating disadvantage.

For these reasons, I do not see how this “trade war” will continue beyond the summer, but even that is a pessimistic outlook.

Before I close this tariff topic and declare it a weekend, let me also mention that the use of tariffs in trade war is neither a new nor an unusual tactic. Check out this little brochure from the Directorate-General for Trade under the European Commission’:

Trade defence instruments, such as anti-dumping or anti-subsidy duties, are ways of protecting European production against international trade distortions.

What they refer to as “defence instruments” are primarily tariffs on imports. In a separate report the Directorate lists no fewer than 63 trade-war cases where the EU imposes tariffs to punish a country for unfair trade tactics.

Trade what, and what countries, you wonder? Sweet corn from Thailand, fused alumina from China, biodiesel from Argentina and Indonesia, malleable tube fittings from China and Thailand, epoxy resins from China, South Korea, Taiwan, and Thailand… and lots and lots of tableware from China.

Like most people, I would prefer a world without taxes and tariffs, and the closer we can get to zero on either of those, the better. But until we get there, we should take a deep breath in the face of the media hype and trust our president on this one.

Larson’s Political Economy is a reader-supported publication.

To receive new posts and support my work, consider becoming a free or paid subscriber.

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Trump Reportedly Shuts Off Flow Of Taxpayer Dollars Into World Trade Organization

Published on March 27, 2025

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From the Daily Caller News Foundation

By Thomas English

The Trump administration has reportedly suspended financial contributions to the World Trade Organization (WTO) as of Thursday.

The decision comes as part of a broader shift by President Donald Trump to distance the U.S. from international institutions perceived to undermine American sovereignty or misallocate taxpayer dollars. U.S. funding for both 2024 and 2025 has been halted, amounting to roughly 11% of the WTO’s annual operating budget, with the organization’s total 2024 budget amounting to roughly $232 million, according to Reuters.

“Why is it that China, for decades, and with a population much bigger than ours, is paying a tiny fraction of [dollars] to The World Health Organization, The United Nations and, worst of all, The World Trade Organization, where they are considered a so-called ‘developing country’ and are therefore given massive advantages over The United States, and everyone else?” Trump wrote in May 2020.

The president has long criticized the WTO for what he sees as judicial overreach and systemic bias against the U.S. in trade disputes. Trump previously paralyzed the organization’s top appeals body in 2019 by blocking judicial appointments, rendering the WTO’s core dispute resolution mechanism largely inoperative.

But a major sticking point continues to be China’s continued classification as a “developing country” at the WTO — a designation that entitles Beijing to a host of special trade and financial privileges. Despite being the world’s second-largest economy, China receives extended compliance timelines, reduced dues and billions in World Bank loans usually reserved for poorer nations.

The Wilson Center, an international affairs-oriented think tank, previously slammed the status as an outdated loophole benefitting an economic superpower at the expense of developed democracies. The Trump administration echoed this criticism behind closed doors during WTO budget meetings in early March, according to Reuters.

The U.S. is reportedly not withdrawing from the WTO outright, but the funding freeze is likely to trigger diplomatic and economic groaning. WTO rules allow for punitive measures against non-paying member states, though the body’s weakened legal apparatus may limit enforcement capacity.

Trump has already withdrawn from the World Health Organization, slashed funds to the United Nations and signaled a potential exit from other global bodies he deems “unfair” to U.S. interests.

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