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.
UN Environment'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, UN Environment'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, UN Environment aims to assess the role of fiscal instruments for an inclusive green economy. Country studies in Mauritius, Ghana, Kenya and Mozambique 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, to better inform governments of the full implications of certain fiscal reforms. Country studies in Vietnam, the Philippines and Uruguay explore how fiscal and pricing reforms, coupled with improved governance and regulation, can support the achievement of Sustainable Development Goals on socially inclusive and sustainable water.
Knowledge sharing and dissemination
UN Environment 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 UN Environment, 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 regular blog which features posts by experts on relevant topics relating to green fiscal policies.
UN Environment, together with our partners, organises technical workshops, conferences and events on specific topics relating to the role of fiscal policies in supporting delivery of the SDGs and the Paris Climate Agreement. These events bring together representatives from national governments, international organizations, academia, research institutes, industry, and civil society to discuss and share experiences with green fiscal policies. Summary reports, presentations and other information about these events are available from the links below:
- Plenary session at 10th Africa Carbon Forum, Nairobi, Kenya, April 2018
- Side-event at UNFCCC COP23 – Bonn, Germany, November 2017
- Technical expert group on the fossil fuel subsidy indicator for SDG12c, Rome, Italy, September 2017
- Parallel session at PAGE Ministerial Conference,Berlin, Germany, March 2017
- Regional Workshop - Bangkok, Thailand, December 2016
- Workshop series at the 17th Global Conference on Environmental Taxation (GCET), Groningen, Netherlands, September 2016
- Partner event at EU Green Week – Brussels, Belgium, May 2016
- Side-event at UNFCCC COP21- Paris, France, December 2015
- Regional Workshop - Nairobi, Kenya, April 2014
- Regional Workshop - Geneva, Switzerland, October 2012
UN Environment 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 UN Environment, 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.
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.
IIED – International Institute for Environment and Development is a policy and action research organisation promoting sustainable development and linking local priorities to global challenges. Based in London, IIED works on five continents with some of the world’s most vulnerable people to strengthen their voice in the decision-making arenas that affect them. For more information on IIED, click here.
CAPE – The Climate Action Peer Exchange (CAPE) is a capacity-building forum for peer-to-peer knowledge sharing and advisory support. Hosted at the World Bank, CAPE brings together finance ministers and other relevant stakeholders to design climate-smart macroeconomic and fiscal instruments to mitigate and adapt to climate change, and to develop financing strategies for implementing the Nationally Determined Contributions agreed at COP21. CAPE is a key part of the WBG’s contribution to the NDC Partnership, a global initiative advancing NDC implementation work around the world. For more about CAPE, click here.
CPI – Climate Policy Initiative (CPI) works to improve the most important energy and land use practices around the world with its deep expertise in policy and finance. Our mission is to help governments, businesses, and financial institutions drive growth while addressing climate risk. With a global reach and offices in Brazil, Europe, India, Indonesia, and the United States, CPI is widely recognized as a leader on tracking investment trends, ensuring effective use of public and private resources, and developing transformative solutions for a low-carbon, climate-resilient future. For more about CPI, click here.
Mercator Research Institute on Global Commons and Climate Change (MCC) is a scientific think tank that assesses strategies for sustainable management of the commons, including natural commons such as land and the atmosphere, as well as social commons such as public infrastructure. Seven working groups conduct research on the topics of economic growth and development, resource management, cities and infrastructure, governance and policy assessments. A special focus is on scientific policy advice: The MCC aims to identify synergies and trade-off between different policy objectives in the context of climate change and sustainable development, and to provide the basis for public debate and policy making. For 2016 the MCC was designated by the International Center for Climate Governance (ICCG) as the best climate think tank in Europe. The MCC was jointly founded by the Mercator Foundation and the Potsdam Institute for Climate Impact Research (PIK). For more about MCC, click here.
The Organisation for Economic Co-operation and Development (OECD) is a unique forum where governments work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. Environmental and sustainable development challenges rank highly among the Organisation’s work areas, and it emphasises the role that environmental fiscal policy has to play in addressing them. The OECD provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. For more about the OECD’s work on tax and the environment, click here.
United Nations Development Programme (UNDP) works in nearly 170 countries and territories, helping to achieve the eradication of poverty, and the reduction of inequalities and exclusion. UNDP helps countries to develop policies, leadership skills, partnering abilities, institutional capabilities and build resilience in order to sustain development results. UNDP focuses on helping countries build and share solutions in three main areas: sustainable development, democratic governance and peacebuilding, climate and disaster resilience. UNDP encourages the protection of human rights and the empowerment of women, minorities and the poorest and most vulnerable in its activities. UNDP’s work on greening fiscal policies is implemented through global, regional and national projects and partnerships such as the Biodiversity Finance Initiative, the Governance Of Climate Change Finance Programme, the Poverty and Environment Initiative, and the Partnership for Action on Green Economy. For more information about UNDP work on environment and climate change, click here.