Proposing critical mineral tariffs as an alternative funding for green development: a Global South perspective
Author: Kanetasya Sabilla
As the presidency of the 30th Conference of the Parties (COP), Brazil used the term “Global Mutirão” to welcome participants of the latest UNFCCC (United Nations Framework Convention on Climate Change) conference held in November 2025. Global Mutirão refers to the collective efforts that every country must take to reduce the risks posed by climate change, as we share the same planet. However, addressing the global climate crisis requires not only collective action but also just and equitable action.
In the global arena, the players are not on a level playing field. Historically, developed countries, also known as the Global North or high-income countries, are the planet's most significant polluters. The 1850-2022 greenhouse gas emission data showed 43% of its biggest polluters were the high-income countries, such as the United States and the European Union (EU) (Our World in Data, 2024). This was also supported by the greenhouse gas emissions per capita in the high-income countries, which were 12.4 t CO2e/hd, higher than the greenhouse gas emissions per capita in the developing countries, which were 5.8 t CO2e/hd (Beynon & Wickstead, 2024).
Yet the Global South, comprising developing countries, is the most vulnerable to climate change, especially those in the categories of low-income countries. They heavily rely on the agricultural sector as the main economic sector. However, this sector will be highly affected by climate change. Climate change poses a threat to food security, loss of farmland, hunger or extreme hunger, undernourishment, and less income, which is related to the loss of productivity in the agricultural sector (Adom, 2024).
Developing countries are negotiating their vulnerability at the global level, such as the COP. One of the most crucial issues in climate change negotiations at a critical forum like COP is climate funding, as the initiative to address climate change will not lead to action without it. However, the Global South is also more vulnerable in terms of financing green development. Financially, the Global North is more secure than the Global South. The share of Gross Domestic Products of 38 member countries of the Organisation for Economic Co-operation and Development (OECD), which mostly consist of high-income countries, in the global economy is 46% in 2021 (OECD, 2024), showing their dominance in the global economy.
This inequality between developed and developing countries has been an issue since the earlier COP. It still took a long way to achieving quantitative commitments in funding until the COP15 of the UNFCCC in Copenhagen in 2009, when developed nations pledged to collectively mobilize USD 100 billion annually by 2020 for climate initiatives in developing countries, contingent upon significant mitigation efforts and transparency in execution. The objective was established at COP16 in Cancun and reaffirmed and extended to 2025 at COP21 in Paris.
However, the inequality between developed and developing countries persists. The majority of advanced countries are failing to fulfill their fair contribution to the USD 100 billion target. In 2018, three large economies, the United States, Australia, and Canada, contributed less than fifty percent of their proportional financial commitment, as determined by objective metrics including the magnitude of their economies and their greenhouse gas emissions. Over a dozen developed countries were failing to meet their commitments (Bos et al., 2021).
Therefore, the Global South needs to take its own collective action to find a funding mechanism to support green development. The risk of climate change has raised the green transition initiative, which means more environmental consideration in economic activities. The Global North is in the lead in implementing the green transition by producing green technology, such as electric vehicle batteries, renewable power, and grid electrification. However, the critical mineral resources of this new technology are from the Global South countries. For example, lithium is from China, Argentina, Bolivia, and Chile; nickel is from Indonesia, the Philippines, and Russia; while cobalt is from Indonesia, Russia, and Cuba.
To avoid the risk of irresponsible extraction and collect alternative funding for green development, the Global South may propose an import tariff mechanism for these critical minerals. Hence, any country importing the critical minerals for the green transition shall pay an additional tariff. This essay aims to discuss why the proposal of an import tariff for critical minerals is a possible solution for alternative funding in the Global South for green development.
An import tariff for critical minerals from the Global South
The natural resources in Asia, Africa, and the Americas attracted European countries to conquer the area in the colonial period. Some scholars believe it as the origin of global inequality and why the lack of development persists in different parts of the world (Acemoglu & Robinson, 2012). The extraction of natural resources still happens in many developing countries as the key economic sector.
In recent years, the ongoing energy transformation in the Global North is strongly linked to the rising demand for specific critical raw resources. The Global South's position is essential, as countries have critical minerals for developing the green industry, such as lithium, nickel, and cobalt. However, the crucial technology to develop the green industry is owned by the Global North, and the technological transfer for green development is still unreachable for the Global South countries. This leads to another inequality between the Global North and South. Hence, the Global South countries need to finance the green technology through alternative funding, as the Global North is in control of both important finance and technology for green development.
At the same time, the Global South policymakers are increasingly utilising environmental reasons to justify extractive practices, especially in relation to global decarbonization targets. Studies indicate that lithium mining is no longer depicted as consistent with climate change; rather, it is positioned as essential for mitigating it (Dorn, 2022). Hence, the extractive critical minerals activity is labelled as green extractivism or even green colonialism to illustrate the power relation between the Global North and South in the green development.
The Global South needs to bargain for its position in the global green development agenda. Though there is still a lack of technological transfer and essential funding for green development, the Global South’s critical minerals can become a power to negotiate with the Global North countries. The Global South needs to highlight the importance of these critical minerals. As a result, the Global North shall compensate the owners with a higher value, such as an import tariff, to collectively rebuild a more environmentally responsible development. Hence, the Global North will get the critical minerals for the green industry, while the Global South will obtain the funding for the green policies, such as climate change adaptation and mitigation, or develop the green industry.
This initiative is supported by the trend of global protectionism that is occurring in international trade. The US and Chinese tariff war persists, and the US has implemented tariffs on many trading partners to avoid a deficit. Amid rising global trade tariffs, the non-tariff barriers in international trade through the technical quality standard and complex trade procedure also worsened the globalisation condition. This also happens in the Global North and South relations when the Global North imposes trade barriers for high-carbon commodities from the Global South. For example, the dispute between the EU and Indonesia regarding palm oil-based biodiesel as the commodity is considered not to meet environmental standards in the EU. This example is also deemed a form of inequality between the North and the South.
Therefore, imposing tariffs on critical minerals owned by the Global South can be an initiative to support green policies and mitigate the threat of climate change amid the global protectionism tendency. This initiative can address the mismatch in financing from Global North countries and the needs of the Global South. Ahumada & Chang (2025), in their recent study, have highlighted the importance of green asymmetric protectionism at the global level to adjust the difference between Global North and South countries. Although their original ideas are the tariff exemption for high-carbon products from the Global South, tariff imposition from the Global South for their critical minerals can also create the condition for climate justice.
To implement this initiative, the strengthening of South-South cooperation is a crucial step. Some official cooperations are already been established in recent years that reflects the willingness of Global South to cooperate, for instance, BRICS (Brazil, Russia, India, China, South Africa), ASEAN (Association of Southeast Asian Nations), SAARC (South Asian Association for Regional Cooperation), African Union, Mercosur (Mercado Común del Sur/Common Market of the South), and others. Although the initial cooperation is mainly for economic and geopolitical purposes, it shall also address environmental issues, especially since the Global South countries are in a vulnerable position in the climate issue.
As an alternative to funding from the Global North, the Global South needs to raise its own funds through a pooled funding mechanism from the import tariffs from the Global North countries. The fund will be available for climate change adaptation and mitigation policies for the developing countries. The fund can also be utilised for research and development of green technology in the Global South. However, the Global South needs to agree on the management and utilisation of the fund.
Hence, the cooperation needs to be strengthened through the official coordination body. The model of OPEC (Organization of the Petroleum Exporting Countries) can be implemented. OPEC is an organization comprising major oil-producing countries, acting as a supply-management mechanism and a price-maker in the global petroleum market. This body will be crucial to determine the import tariff mechanism, including the magnitude of the tariffs, production and supply management, and determine the beneficiaries of the pooled fund.
Conclusion
The inequality between the Global North and South persists in many issues, even in the global common problem of climate change. The lack of funding is one of the most crucial problems for the Global South, believed as the most vulnerable in the climate crisis. However, negotiations with the Global North to finance the green development are ineffective and inadequate.
The initiative for the green industrial development that is mainly happening in the Global North can be an opportunity to propose alternative funding for green development in the Global South. Since the Global South owns the critical minerals for the green industry, the Global South is in a better bargaining position to negotiate with the Global North. The Global South can impose an import tariff for the critical minerals, and the funding will be pooled to finance green development in the Global South. This scheme may be applicable in the current global protectionism trend. Moreover, the experience of OPEC in determining the global trade of critical minerals can be implemented by the Global South cooperation.
There are also some drawbacks to this policy. For example, the World Trade Organization (WTO) may disapprove of the idea. However, the backup reasons for financing green policies in the Global South can be compelling since the initial funding plan from the Global North failed to meet the target. Furthermore, the Global North could also respond with retaliatory measures. However, because the Global North’s accelerating green industrial transition relies heavily on critical minerals, it has little option but to continue sourcing them from the Global South.
