Meeting the commitments of the Paris Agreement requires a major and sustained increase in investment to mitigate rising global greenhouse gas emissions (GHG) and adapt to the impacts of climate change. Estimates suggest that USD 349 billion a year is required to implement countries’ nationally determined contributions (NDCs). Fiscal policies will be particularly important in mobilizing public revenues to support investments in sustainable energy, clean technologies and adaptation capacities among others; leverage climate investments from global climate funds and the private sector; and enhance the effectiveness of public spending. At the same time, fiscal policies can play a key role in delivering commitments to reduce GHG emissions by shifting consumer and business behaviour and encouraging private investment.
Fiscal policies will thus be an important part of countries’ efforts to address climate change. Over 80 countries included some form of fiscal policies in their NDCs and there is scope for other countries to use such measures to meet their climate commitments. UN Environment is supporting countries in implementing their NDCs through fiscal policies and climate financing measures. This support includes targeted policy analysis and advice to countries in Asia, Latin America and Africa on relevant fiscal policies like carbon pricing measures, fossil fuel subsidy reform, incentives for energy efficiency, renewable energy subsidies, and fiscal incentives in the transport sector.
Overview of countries that have included fiscal and pricing measures in their NDCs
