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.
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.
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. G20 leaders emphasized that integration of climate priorities into budgetary frameworks, ensuring that public expenditures are directed toward projects with measurable environmental and social benefits.
Cooperation is required between these actors and audiences to drive progress foward in Fiscal reforms and regulations.
Showcasing the key reform milestones for Fiscal reforms and regulations that have been addressed at global events.
Washington, DC
Countries present success stories from the JDRMI, with increased private sector financing for climate projects.
Domestic financial market development is indispensable for climate finance, but EMDEs need structural reforms, debt relief, regulatory clarity, and international support to mobilize domestic savings effectively.
Publications and educational material to deepen understanding of Fiscal reforms and regulations.
This paper describes how the IMF and WB can build on existing collaboration in domestic resource mobilization (DRM), to foster synergies and complementarities in the support they provide.
ADB's Paper which emphasizes that a roadmap provides certainty on policy introduction, directly encouraging the financial sector to increase sustainable investments. A sustainable finance policy roadmap was seen as the most important policy to unlock sustainable investment as it is one of the strongest policies signals of the country's commitment to develop sustainable finance market.