Available analytical tools and emerging good practice
Feedback from Ministries of Finance (MoFs) around the world points to the requirement to estimate the fiscal implications of climate change, climate mitigation, and adaptation measures as a core concern. This report focuses on how each climate-related issue can affect public finances, how those effects can be estimated using existing data, tools, and approaches, and where gaps remain.
The report surveys analytical questions relevant to MoFs assessing the climate-related fiscal challenges and opportunities they need to manage and seize, as well as the available tools and examples of emerging best practice, drawing from the Compendium of Practice. It focuses on the fiscal costs and benefits in terms of public expenditure and revenues, including but not limited to the investment necessary to achieve resilience to climate change and the structural transition to a net zero economy.
The report aims to make it easier for Ministers, senior officials, and analysts within MoFs to get started and make progress in mainstreaming climate-related issues into core fiscal processes. It is also designed to assist external agencies and researchers in identifying where their efforts to fill gaps and advance understanding will be of most use to MoF audiences. It takes a pragmatic approach, recognizing that MoFs have many pressures on their resources, so they need to be able to build from existing analysis and tools wherever possible.