The Fiscal Implications of Climate Change (IMF)

This IMF paper by the Fiscal Affairs Department reviews the fiscal implications of climate change, and the potential role of the IMF in addressing them. It highlights that various fiscal aspects of both mitigation and adaptation. In terms of mitigation, carbon pricing is introduced (with suggestions for design), ensuring appropriate instrument selection, and the importance of facilitating international cooperation. In terms of adaptation, the role of the public sector is discussed, while removing barriers for the private sector investment is highlighted.  More so, the research establishes the role of the IMF in addressing climate change. Specifically, the IMF can assist with both bilateral and multilateral surveillance, technical assistance, policy development and research work, and lending arrangements; while support from other actors is also inevitably needed to  address climate change.