The term environmental fiscal reform (EFR) means different things to different people. In this report, we will take EFR to mean: a range of taxation or pricing instruments that can raise revenue, while simultaneously furthering environmental goals. This is achieved by providing economic incentives to correct market failure in the management of natural resources and the control of pollution.

As the world moves on from the climate agreement negotiated in Paris, attention is turning from the identification of emissions reduction trajectories—in the form of Nationally Determined Contributions (NDCs)—to crucial questions about how these emissions reductions are to be delivered and reported within the future international accounting framework.

The (economic) welfare disaster risk in a country can be reduced by reducing the exposure or vulnerability of people and assets (reducing asset losses), increasing macroeconomic resilience (reducing aggregate consumption losses for a given level of asset losses), or increasing microeconomic resilience (reducing welfare losses for a given level of aggregate consumption losses). The paper proposes rules of thumb to estimate macroeconomic and microeconomic resilience based on the relevant parameters in the economy.

The Climate Change Public Expenditure and Institutional Review (CCPEIR) Sourcebook identifies the key issues that central finance and planning agencies will need to consider and the various approaches taken in dealing with the technical, policy, and institutional issues that are likely to arise in the response to climate change.

The term ‘green jobs’ can refer to employment in a narrowly defined set of industries providing environmental services. But it is more useful for the policy-maker to focus on the broader issue of the employment consequences of policies to correct environmental externalities such as anthropogenic climate change. Most of the literature focuses on direct employment created, with more cursory treatment of indirect and induced job creation, especially that arising from macroeconomic effects of policies.

The “FASTER” principles presented in this report lay out an approach that focuses on the emerging design features for successful and cost-effective carbon pricing policies drawn from initial and growing experience around the world. By maintaining a focus on fairness, alignment with existing policies, stability, transparency, efficiency, and reliability, the FASTER principles show that a well-designed carbon pricing instrument can provide the flexibility, and certainty for a thriving business, and investment climate, while effectively reducing emissions.

This paper reviews the key findings of a modeling analysis exploring the implications of the South African carbon tax. A carbon tax, in conjunction with the recycling of revenues, has been designed by the National Treasury as one of the key mitigation instruments in helping South Africa meet its international commitments to reduce its greenhouse gas (GHG) emissions by 42 percent relative to business-as-usual by 2025 and for emissions to follow a ‘peak plateau and then decline’ trajectory.

Green growth is about making growth processes resource efficient, cleaner and more resilient without necessarily slowing them. This paper aims at clarifying these concepts in an analytical framework and at proposing foundations for green growth.

The paper proposes four channels that determine household consumption and through which households may escape or fall into poverty (prices, assets, productivity, and opportunities). It then discusses whether and how these channels are affected by climate change and climate policies, focusing on the exposure, vulnerability, and ability to adapt of the poor (and those vulnerable to poverty). It reviews the existing literature and offers three major conclusions.

The (economic) welfare disaster risk in a country can be reduced by reducing the exposure or vulnerability of people and assets (reducing asset losses), increasing macroeconomic resilience (reducing aggregate consumption losses for a given level of asset losses), or increasing microeconomic resilience (reducing welfare losses for a given level of aggregate consumption losses). The paper proposes rules of thumb to estimate macroeconomic and microeconomic resilience based on the relevant parameters in the economy.