Fiscal reforms and regulations
Fiscal reforms and regulations play a crucial role in optimizing public spending on climate-related projects while creating enabling regulations and incentives for the private sector to adopt sustainable practices.
2030 Goals
Fiscal reforms are in place to mobilize domestic resources, incentivize sustainable practices, and ensure that financial systems support climate objectives. These could include, tax incentives, carbon prices, carbon taxes, and targeted subsidies.
StatusModerate progress
Moderate progress
- Given limited public finance capacity, fiscal and tax reforms are key levers to leverage private sector contributions to support 2030 goals.
- If current climate-related subsidies and other incentives to stimulate private investment are scaled back, various other policy supports and enabling regulations will need to be enacted to balance the effort.
- The IMF and the World Bank have launched a new joint initiative called "Joint IMF-WB domestic resource mobilization initiative (JDRMI)" to enhance domestic resource mobilization. The focus of the initiative is to help countries strengthen their tax systems and revenue collection to better fund public services and development projects.
Leading Actors
Multilateral Development Banks
World Bank, Asian Development Bank (ADB), African Development Bank (AfDB)
International Organizations
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), OECD, International Monetary Fund, UN Economic and Social Commission for Asia and the Pacific
Alliances
Joint Domestic Resource Mobilization Initiative, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
Supportive Stakeholders
NDC Partnership, Green Fiscal Policy Network
Milestones
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Resources
Fiscal Policy and Sustainable Finance
Domestic Mobilization, Fiscal reforms and regulations
Stepping up Domestic Resources Mobilization: A New Joint Initiative by IMF and WB
Domestic Mobilization, Fiscal reforms and regulations