Theme · Mitigation

Energy Transition & Mitigation

Supporting emissions reductions and the energy transition through economic strategy, fiscal policy, and finance.

17 action areas

Energy Transition & Mitigation
Action areas
F1 · Reforming economic strategy through shaping national development and climate plans
F1a Participating in the development and implementation of climate and related strategies  How Ministries of Finance can support national climate and biodiversity strategies through economic analysis, fiscal policy, and finance. → F1a(i) Long-term low-emission development strategies (LT-LEDS)  Assessing the economic and investment implications of long-term climate strategies and connecting them with nearer-term policy decisions to support growth and competitiveness. → F1a(ii) Nationally Determined Contributions (NDCs) Assessing the economic implications of national climate commitments and supporting implementation to make commitments affordable and deliverable. → F1b Greening national development and sector strategies  Connecting climate objectives with national development and sector strategies. → F1c Shaping 21st century industrial and innovation strategies  Contributing to industrial and innovation strategies that support low-carbon sectors, productivity, and employment. → F1d Developing investment strategies, including assessing investment needs  Assessing climate investment needs, establishing priorities, and connecting investment plans with public and private sources of finance. → F1e Identifying and developing bankable projects and programs Supporting project preparation and investment pipelines that translate national priorities into projects ready for financing and implementation. →
F2 · Fiscal policy
F2a(i) Carbon taxes and pricing, subsidy reform, and frontiers in environmental taxation Designing carbon pricing, fossil fuel subsidy reforms, and new forms of environmental taxation. → F2a(ii) Creating fiscal incentives and regulations for transforming key sectors  Creating fiscal incentives and regulation to support the transition in key sectors. → F2a(iii) Combining instruments into coherent policy packages Assessing interactions between fiscal and regulatory measures and bringing them together in coherent climate policy packages. → F2b(i) Identifying alternative revenue streams to taxing fossil fuels Assessing exposure to declining fossil fuel revenues and developing alternative revenue sources as the economy changes. → F2c Using public financial management and the budget to drive transformation Using existing PFM systems and the budget cycle to integrate climate and nature priorities into medium-term fiscal strategies and expenditure frameworks, track spending, and inform future allocations. → F2d Greening public investment management  Incorporating emissions reduction and climate resilience into the appraisal, selection, and management of public investment. → F2e Greening public procurement  Using public procurement rules and purchasing decisions account for emissions, resilience, and costs over the life of goods, services, and infrastructure. →
F3 · Financing the transition
F3a(i) Broadening the tax base for capital investment in sustainable infrastructure Expanding domestic revenue through tax reform to support investment in sustainable infrastructure. → F3a(ii) Debt financing for investment in sustainable infrastructure Using sovereign borrowing, including green and other thematic bonds, to finance sustainable infrastructure within debt management strategies. → F3a(iii) Enhancing sub-sovereign finance to support fast growing cities  Enhancing access to sources of finance for investment in sustainable urban infrastructure. → F3b(i) Greening national development banks and green investment banks  Using ownership and governance roles to support climate investment and risk management through national development and green investment banks. → F3b(ii) Greening sovereign wealth funds and state-owned enterprises  Bringing climate objectives and risk management into oversight of sovereign wealth funds and state-owned enterprises. → F3b(iii) Greening central banks and fiscal and monetary policy coordination How Ministries of Finance and central banks can coordinate on climate risks and the transition. → F3b(iv) Working with export credit agencies Working with export credit agencies to reflect climate objectives and risks in publicly supported export finance. → F3c(i) Using financial sector policy to mobilize private capital for the transition    Working with regulators and financial institutions on climate risk, disclosure, and market frameworks that support investment in the transition. → F3c(ii) Using blended finance and risk sharing instruments   Assessing financing arrangements, including blended finance, which share risks and combine public and private capital for climate investment. → F3c(iii) Bringing sources of finance together in sustainable finance roadmaps Bringing public and private actors together around sustainable finance priorities, responsibilities, and implementation plans. → F3e Leveraging international climate finance  Accessing international climate finance and coordinating development partners, carbon market opportunities, and country platforms around national priorities. → F3e(i) Getting climate finance ready and leveraging MDB and DFI capital Preparing for and accessing climate finance from development finance institutions and multilateral development banks to link financing with national investment priorities. → F3e(ii) Accessing international carbon markets Assessing international carbon market opportunities and their implications for financing, public revenues, and national climate commitments. → F3e(iii) Setting up country platforms Coordinating development partners and investors around nationally led investment priorities and financing plans. →
C1 · Leadership capability
C1a Strengthening the mandate of Ministries of Finance Connecting climate responsibilities with mandates for economic development, macroeconomic stability, and sound public finances. → C1b Developing organizational climate strategies  Translating climate responsibilities into internal objectives and work programs. → C1c Formalizing governance structures & organizational set-up Assigning climate responsibilities and organizing internal coordination. → C1d Communicating on climate, the economy and public finances Explaining the economic and fiscal implications of climate action and communicating policy choices to different audiences. →
C2 · Coordination capability
C2a Coordinating climate action across government Supporting a whole-of-government approach to climate action by working with other ministries and levels of government to connect climate priorities with economic policy, budgets, and implementation. → C2b Engaging with external stakeholders Engaging businesses, financial institutions, civil society, and knowledge partners to understand economic impacts and strengthen the design and implementation of climate-related fiscal and economic reforms. →
C3 · Human and analytical capability
C3a Enhancing skills and expertise Building climate expertise through recruitment, training, peer learning, and collaboration with external specialists. → C3b Enhancing economic decision-making tools and data-driven analysis Using economic analysis to integrate climate into decision-making. →
Themes

Explore the other themes

Adaptation & Resilience

Managing climate risks to public finances and the economy while financing adaptation and resilience.

Just Transition

Addressing the effects of the transition on jobs, livelihoods, and households through fiscal policy and public investment.

Nature & Biodiversity

Recognizing the value of natural capital in economic and fiscal decisions and financing its protection and restoration.