Analytical tools used for climate policy analysis

• Uganda is developing NCAs to provide a comprehensive overview of a country’s wealth that includes the value of natural assets. As part of the process, an ecosystem monetary services account, which tracks the losses and gains of ecosystem services over time, was established.
• There is increasing recognition that climate and environmental considerations should be considered in SAMs. Uganda has taken steps to do this, in collaboration with government agencies, research institutions, and international partners, as well as a consultant provided by the World Bank, though continued research and capacity development is needed to obtain up-to-date data.
• Research questions addressed concern the impact of current (fiscal) policies on natural capital and climate change, the impact on the economy of climate adaptation on mitigation measures along with policy options that minimize transition risk, the impact of the EU’s Carbon Border Adjustment Mechanism and deforestation regulation, the impact of climate shocks, and the economic benefits of the green energy transition.
• The Uganda Integrated Macroeconomic Model (IMEM) is a CGE model that integrates environmental and climatic variables into its SAM and the model equations. Advantages of this model include that backward and forward links are considered, and both prices and quantities can be changed. However, the results are not instantaneous, as designing scenarios to reflect policy proposals can be difficult.
• The Rapid Environmental Economic Assessment (REEA) is a static multiplier model based on the input-output model developed with support from the World Bank. The tool can generate quick results, though a more detailed analysis using the CGE model often follows.
• UGAMOND was developed with support from the World Bank and is mainly focused on energy and long-run simulations. It is based on time-series data and is thus useful for long-term climate modeling. However, it has limited coverage of the wider economy and does not capture inter-sectoral dynamics due to limited sectoral detail.

The main challenges in using these models and tools include the need for capacity-building to enhance expertise in model usage, the availability of data, and the effective uptake of the results in policy design and implementation. There are plans to expand the NCAs to sectors such as minerals, agriculture, and tourism. While the accounts have been used to inform the National Development Plans (III and IV), annual budgets, and the Tenfold Growth Action Plan (2025–2040), the data could still be better integrated into budgeting processes to ensure their systematic consideration.