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Macro-Fiscal Implications of Adaptation to Climate Change
Author:
Mr. Zamid Aligishiev
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,
Emanuele Massetti
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Mr. Matthieu Bellon
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Series:
Staff Climate Notes
Volume/Issue:
Volume 2022: Issue 002
Language:
English
Publication Date:
23 Mar 2022
DOI:
https://doi.org/10.5089/9798400201608.066
ISBN:
9798400201660
ISSN:
2789-0600
Pages:
45
Keywords:
Climate change, adaptation, aid, macro-fiscal framework
Legal-disclaimer:
The IMF Notes Series aims to quickly disseminate succinct IMF analysis on critical economic issues to member countries and the broader policy community. The IMF Staff Climate Notes provide analysis related to the impact of climate change on macroeconomic and financial stability, including on mitigation, adaptation, and transition. The views expressed in IMF Staff Climate Notes are those of the author(s), although they do not necessarily represent the views of the IMF, or its Executive Board, or its management.
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Adaptation to climate change is an integral part of sustainable development and a necessity for advanced and developing economies alike. How can adaptation be planned for and mainstreamed into fiscal policy? Setting up inclusive coordination mechanisms and strengthening legal foundations to incorporate climate change can be a prerequisite. This Note identifies four building blocks: 1. Taking stock of present and future climate risks, identifying knowledge and capacity gaps, and establishing guidance for next steps. 2. Developing adaptation solutions. This block can be guided by extending the IMF three-pillar disaster resilience strategy to address changes in both extreme and average weather and would cover the prevention of risks, the alleviation of residual risks, and macro-fiscal resilience. 3. Mainstreaming these solutions into government operations. This requires strengthening public financial management institutions by factoring climate risks and adaptation plans into budgets and macro-frameworks, and in the management of public investment, assets and liabilities. 4. Providing for transparent evaluations to inform future plans. This involves continually monitoring progress and regularly updating adaptation plans.
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Cover Staff Climate Notes
Staff Climate Notes
Publisher:
International Monetary Fund