Driving a Green Economy Through Public Finance and Fiscal Policy Reform (UN Environment)

A green economy is defined as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. Achieving a green economy requires investments in economic sectors that build on and enhance the Earth’s natural capital or reduce ecological scarcities and environmental risks, which are driven by national policy reform and the development of international policy and market infrastructure. Both fiscal policy and public finance, such as environmental tax and charges, green subsidies, environmentally harmful subsidies reform, and direct public expenditure, can be key drivers of a country’s transition to a green economy. This UN Environment paper explores the linkage and options available to policy-makers considering ways to drive and accelerate the transition to lower-carbon, more resource-efficient and socially-inclusive economic growth.