Making fiscal policy work for the inclusive green economy
Green fiscal policy uses fiscal and budgetary tools to address environmental challenges such as climate change, pollution, congestion, waste, biodiversity protection, overfishing, and sustainable forestry.
- Environmental taxes and charges correct price signals and help shift consumer and business behaviour towards more sustainable patterns.
- Budgetary reforms align government expenditure with environmental goals and enhance the effectiveness of public spending.
- Fiscal incentives for green financial mechanisms can leverage private financing for green investment.
- Fiscal policies also raise public revenues, which can be used for green investment, broader fiscal reform or other priorities such as health and education.
By aligning fiscal and budgetary policy with sustainable development priorities, green fiscal policies support the shift to an inclusive green economy.”