Fiscal Policies for Development and Climate Action
Fiscal policies can lay the foundation for low-carbon and climate-resilient development. Building on more than two decades of research in development and environmental economics, this book argues that fiscal instruments are crucial for mitigating and adapting to climate change while raising huma...
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| Format: | Book |
| Language: | English |
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Washington, DC: World Bank
2018
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| Online Access: | https://documents.worldbank.org/en/publication/documents-reports/documentdetail/340601545406276579/fiscal-policies-for-development-and-climate-action http://hdl.handle.net/10986/31051 |
| Summary: | Fiscal policies can lay the foundation for low-carbon and climate-resilient
development. Building on more than two decades of research in
development and environmental economics, this book argues that fiscal
instruments are crucial for mitigating and adapting to climate change
while raising human welfare. By implementing environmental tax reforms,
developing countries can reap a “triple dividend”: cutting pollution, raising
economic activity, and generating development cobenefits, such as cleaner
water, safer roads, and improvements in human health. These reforms need
not harm competitiveness. Empirical evidence, including from Indonesia
and Mexico, suggests that raising fuel prices can increase firm productivity.
In addition, risk management strategies are needed to bolster economic
resilience to climate-induced natural disasters. Modelling suggests that
preventive public investments and measures to build fiscal buffers can help
safeguard stability and growth in the face of rising climate risks. In this way,
environmental tax reforms and climate risk-management strategies can lay
the much-needed fiscal foundation for development and climate action. |
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