Domestic resource mobilization and strategic use is the crux of building an inclusive green economy. In particular, green fiscal policy stands out as a powerful tool which generates public resources and drives public investment for an inclusive green economy. It also reflects the cost of externalities in the price of goods and services, signals the scarcity of natural resources and drive private investment decisions, consumer behavior and social well-being. A range of fiscal instruments, including environmental taxes, pollution charges, subsidies for green technologies, budget allocations and tax incentives, can stimulate low-carbon, resource efficient, environmentally friendly and socially inclusive economic activities.

UNEP’s path-breaking study, Towards a Green Economy (2011), made a strong case for a greater focus on public expenditure, revenue generation measures and environmental fiscal reforms as part of the green economy toolbox. Since then, UNEP’s work on green fiscal policy has consisted of the following three main areas:

  • Green fiscal policy analysis
  • Knowledge sharing and dissemination
  • Policy dialogues

Green fiscal policy analysis

Through analytical studies on green fiscal policy, UNEP aims to assess the role of fiscal instruments for an inclusive green economy. In particular, studies focus on generating domestic revenues for green investment while addressing environmental externalities and social equity at global, national and sectoral levels. To date, country studies have been undertaken in Mauritius, Ghana, Kenya and Mozambique. The county studies provide policy options for governments on how to strengthen fiscal regimes for the green economy; and analyze the distributional impacts of proposed measures, such as introducing a carbon tax, in order to better inform governments of the full implications of certain fiscal reforms. 

To see relevant country and sectoral studies, please click on the publications link in the side bar.

Knowledge sharing and dissemination

UNEP promotes knowledge exchange and dissemination of experiences with green fiscal policy reforms, mainly through the Green Fiscal Policy Network. The Green Fiscal Policy Network is a joint initiative by UNEP, IMF and GIZ which provides a web -based platform focused on fiscal policies in support of the green economy. The Network aims to facilitate knowledge sharing and collective learning and disseminate good practices on how to implement sound fiscal policy in support of the green economy. A number of case studies, reports, policy briefs and country profiles are available on the website and are updated regularly. There is also a quarterly newsletter and interested individuals can contact the Secretariat to subscribe.

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Policy Dialogue

UNEP, together with IMF and GIZ, have hosted technical workshops for experts and policymakers that explore fiscal policy issues. The first workshop, on Fiscal Policies towards an Inclusive Green Economy, was held in October 2012 in Geneva. A second joint workshop, onReforming Fossil Fuel Subsidies for an Inclusive Green Economy, was held in April 2014 in Nairobi, in collaboration with the Global Subsidies Initiative. Summary reports, presentations and other information about the workshops are available from the link below:

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Partners

UNEP works with a range of partners to provide policy advice, develop knowledge products and host technical workshops on the role of fiscal policy in the transition to a green economy. The Green Fiscal Policy Network is a joint partnership between UNEP, GIZ and IMF which aims to facilitate knowledge sharing, learning and dialogue on fiscal policies to support the green economy and deliver various SDGs. The Network also works with a number of associated partners to enable wider outreach, knowledge development and information sharing.

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is the world’s leading provider of international cooperation services for sustainable development. In terms of the environment, GIZ assists its partners in identifying the wide range of causes of risks. It helps modernise environmental policy at all levels, advises on regional environmental cooperation and develops strategies to embed environmental protection in other areas of policy. For more about the GIZ’s work on Green Economy, click here.

The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. In the environmental area, the IMF’s work includes research on the case for, and design of, fiscal policies to ‘get prices right’, that is, to reflect climate damages and other environmental side effects in the price of energy and other products). For more about the IMF’s environmental work, click here.

ASSOCIATED PARTNERS

The Green Budget Europe (GBE) is a European expert platform on environmental taxation and green fiscal reform. GBE organizes and participates in events to foster dialogue, conducts and disseminates research and best practices, engages with policy-makers and provides input to political processes. For more information on GBE’s work, click here.

The International Institute for Sustainable Development (IISD) is an independent, non-profit organization that provides practical solutions to the challenge of integrating environmental and social priorities with economic development. IISD reports on international negotiations, conducts rigorous research, and engages citizens, businesses and policy-makers in the shared goal of developing sustainably. For more information on IISD’s work on fiscal policy and the Global Subsidies Initiative (GSI), click here.

The Green Budget Germany is a non-governmental organisation that was founded in 1994 to support the introduction of an Environmental Tax Reform in Germany. In recent years, GBG’s focus has expanded to cover market-oriented eco-fiscal policies around the world. A key concern of GBG’s work is to improve communication and public awareness of environmental fiscal reform. For more information on GBG, click here.

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