COVID-19 has plunged the global economy into crisis. Green fiscal policies (GFP) can play a key role in shaping the recovery. As governments are devising green fiscal stimulus policies, they must look to maximize short-term growth and employment effects, but they have also a lever in hand to steer economies to a green and fair transition. The collapse of the oil price has created a window of opportunity for carbon taxes and fossil fuel subsidy reform to mobilise revenue and drive low-carbon development. Green budgeting can rationalise inefficient expenditures and align spending with sustainability. In developing countries with limited fiscal space, GFP can be part of a sustainable solution.


How SDG bonds could accelerate a green recovery

The Asian Development Bank’s recent estimates show an economic contraction across Asia (minus-4.0 percent last year in Southeast Asia), and the United Nations Sustainable Development Goals (SDGs) Report 2020, which estimates around 71 million people were pushed back into extreme poverty, shows the scale of the challenge facing the re-tracking of the SDGs across the world.

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