Fiscal reforms and regulations

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.

• 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.