The Roles of Fiscal Policy, Financial Markets and Trade in Implementing the Paris Agreement

UN Environment, IMF, IFAD, UNCTAD and WTO organised a panel discussion at the COP24 which explored how fiscal policies, financial markets and trade can support countries’ nationally determined contributions (NDCs) under the Paris Agreement. The event was moderated by Eric Usher, Head, UN Environment Finance Initiative. Panellists included:

• Margarita Astralaga, Director of the Environment and Climate Division, IFAD
• Ian Parry, Principal Green Fiscal Policy Expert, Fiscal Affairs Department, IMF
• Alexey Vikhlyaev, Senior Economic Affairs Officer, UNCTAD
• Mark Radka, Chief of Energy and Climate Branch, Economy Division, UN Environment
• Aik Hoe Lim, Director of Trade and Environment Division, WTO

With an intervention by Tomasz Chruszczow, Special Climate Change Envoy, Poland.   The panel discussed a number of issues in the context of implementing the NDCs including:

• The role of carbon pricing and other mitigation policies. Panelists explored different policy options such as carbon pricing, fossil fuel subsidy reform, and fiscal incentives; and their potentially positive impacts on emissions, fiscal balances, and the economy.
• The role of open, rules-based trade and markets in promoting enabling conditions. Panelists discussed how trade can be used to implement the NDCs and leverage co-benefits, including social outcomes. They also explored how to deal with response measures in cooperation with trading partners, promoting an efficient allocation of natural resources, raising standards of living and improving access to environmental goods and services.
• Instruments to mobilize climate finance. Panelists explored new risk management instruments and processes, including a pilot program of financial solutions that protect smallholder farmers’ revenues against climate-related disasters and price shocks, which contributes to more predictable incomes and sustainable livelihoods for rural farmers.