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While the COVID-19 pandemic has created unprecedented challenges for countries worldwide, it has also created opportunities for driving transformation through a green recovery. Finance ministries and fiscal policies play a crucial role in shaping this recovery. Up until now, substantial fiscal resources have been mobilized to tackle socio-economic impacts of the pandemic. However, recovery packages have tended to perpetuate existing trends in spending and do not close the investment gap to address the climate and biodiversity crises.
Looking at underlying challenges, country examples and practical steps for implementation, this report identifies four action areas for advancing green fiscal policies, as part of COVID-19 recovery and beyond:
- Reforming fiscal rules to tackle limited fiscal space
- Green public financial management frameworks to link fiscal, social, and ecological strategies
- Carbon pricing to induce long-term change
- Developing capacities and networks to integrate recovery efforts across fiscal and environmental spheres
The report is the third and final publication in the series Green Recovery for Practitioners, which is developed in contribution to the NDC Partnership’s Economic Advisory Initiative.