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Khaled Eltokhy, Ms. Katja Funke, Guohua Huang, Yujin Kim, and Genet Zinabou
In the wake of the COVID-19 crisis, governments around the world announced unprecedented fiscal packages to address the economic impact of the crisis. The unusually large scale of the packages was accompanied by widespread calls for “greening” them to meet the dual goals of economic recovery and environmental sustainability. In response, several researchers and international organizations attempted to assess the “greenness” of the fiscal policy response of the world’s largest economies. This paper takes stock of the contributions made by these various trackers, identifies strengths and weaknesses of their methodologies, and draws lessons for assessing the climate impact of fiscal policy going forward. It finds that: trackers provided useful assessments of the (generally low) level of greenness and raised awareness; trackers’ methodologies, while valid and innovative, varied significantly with some important, if currently largely unavoidable, weaknesses; and the way forward should involve tracking the greenness of entire government budgets, rather than just their response to the COVID-19 crisis.
Khaled Eltokhy, Ms. Katja Funke, Guohua Huang, Yujin Kim, and Genet Zinabou

VII. APPENDIX VIII. REFERENCES FIGURES 1. G20 Contribution to Global Greenhouse Gas Emissions 2. G20 COVID-19 Response Climate Impact 3. Climate Relevance of Fiscal Measures in the G20 COVID-19 Response, March 2021 4. Climate Relevance of Fiscal Measures in the G20 COVID-19 Response, October 2020 5. Comparison of the Assessment of Green Trackers Covering G20 Fiscal Policies 6. Countries that have Applied Green Budget Tagging TABLES 1. IMF Green Tracker Policy Archetypes 2. COVID-19 Green Trackers – Summary of Key Features 3. Correspondence

Ms. Era Dabla-Norris, Mr. James Daniel, Mr. Masahiro Nozaki, Cristian Alonso, Vybhavi Balasundharam, Mr. Matthieu Bellon, Chuling Chen, David Corvino, and Mr. Joey Kilpatrick

. Occurrence, All Weather-Related Disasters, 2000–19 Figure 2. CO 2 Emissions, 1971–2017 Figure 3. CO 2 Reduction with Carbon Taxes, 2030 Figure 4. China: Gini Coefficient after Carbon Tax of $25 per Ton and Compensation Measures Figure 5. Adaptive Capacity and Physical Exposure Figure 6. Global Fossil Fuel CO 2 Emissions, 1990–2030 Figure 7. Climate Relevance of Fiscal Measures in the G20 Related to the COVID-19 Crisis Figure 8. Temperature Anomalies, 1880–2019 Figure 9. APD: Damage from Climate-Related Events, 2010–19 Figure 10. Weather

Khaled Eltokhy, Ms. Katja Funke, Guohua Huang, Yujin Kim, and Genet Zinabou

. II. The IMF Green Tracker The IMF’s Green Tracker employs an archetype-based methodology for assessing the climate impact of the G20 countries’ fiscal response, both above and below-the-line measures, to the COVID-19 crisis. This is a marginal approach, focused on the climate relevance of the fiscal response to COVID-19, which does not reflect measures undertaken as non-COVID-19 fiscal policies, nor any regulatory measures. The climate impact is assessed based on the impact a policy measure is expected to have on GHG emissions. In addition, adaptation measures

International Monetary Fund. Asia and Pacific Dept

: Fiscal Monitor, October2020. G-20: Climate Relevance of Fiscal Measures Related to COVID-19 Crisis 1/ (In percent of GDP, left scale; in percent of total, right scale) Source: IMF staff estimates, 1/ Measures are categorized into positive and negative policy 'archetypes’. based on the climate relevance of specific activities. A similar methodology is applied in the Greenness of Stimulus Index http://www.vivideconomics.com/casestudy/greenness-for-stimulus-index ). 14. The proposed energy subsidy reform in the 2021 budget would be an important

Ms. Era Dabla-Norris, Mr. James Daniel, Mr. Masahiro Nozaki, Cristian Alonso, Vybhavi Balasundharam, Mr. Matthieu Bellon, Chuling Chen, David Corvino, and Mr. Joey Kilpatrick

Change (UNFCCC)—should be stepped up. Expanding multilateral climate funds, such as the Green Climate Fund, and improving their accessibility could promote green growth in many developing countries in the region. Figure 6. Global Fossil Fuel CO 2 Emissions, 1990–2030 (Billion of tons) Sources: International Energy Agency (2020) ; and IMF staff calculations. Note: 2 (1.5) degrees refers to the emissions that will keep a global temperature rise below 2 (1.5) degrees Celsius above the pre-industrial levels. Figure 7. Climate Relevance of Fiscal

International Monetary Fund. Fiscal Affairs Dept.
Countries have committed, through the Paris Agreement and the Sustainable Development Goals (SDGs), to pursue climate targets and policies that would limit global temperature rise to well below 2 degrees Celsius, compared to pre-industrial levels. A shift toward green public investment will help to mitigate greenhouse gas (GHG) emissions. In addition, substantial public investment will be necessary to build public infrastructure that makes economies more resilient to climate change and related natural disasters. Climate change mitigation and adaptation challenges thus compound preexisting needs for public investment to foster the economic recovery from the pandemic and to meet the SDGs in a broader range of areas, often in a context of limited fiscal space. Against this backdrop, a priority for all countries is to manage their public investment efficiently and effectively. To help countries improve the institutions and processes for infrastructure governance (the planning, allocation, and implementation of public investment), the IMF developed in 2015 the Public Investment Management Assessment (PIMA), which has already been applied in over 70 countries. However, the current PIMA does not provide a sufficiently tailored assessment of how public investment management can support climate change mitigation and adaptation. To fill this gap, this paper introduces a new module to the to the current Public Investment Management Assessment (PIMA) framework, the “Climate-PIMA” (C-PIMA), whose goal is to help governments identify potential improvements in public investment institutions and processes to build low-carbon and climate-resilient infrastructure.
International Monetary Fund. Fiscal Affairs Dept.

-related public investment expenditures . Many budgets and fiscal reports indicate the climate relevance of capital expenditures in quite some detail. However, the methodologies used are often still relatively crude and based on broad judgments and/or bureaucratic deliberations rather than standard methodology. Sometimes, the climate relevance of expenditure is only identified in broad terms, i.e., fully relevant, partially relevant and not relevant. Also, in some countries broad categories of expenditure are identified as climate relevant, such as capital grants to local

International Monetary Fund. Fiscal Affairs Dept.

-efficient vehicles ( China , France , Italy ). Countries have also provided loans and grants for green investments, such as cleaning inactive oil wells in Canada , modernizing commercial vehicles in Germany , and building climate-resilient infrastructure in Japan . Negative measures have been mainly bailouts, such as those for airlines in Brazil , China , and France . To date, only France attached significant green conditionality to its bailout. Figure 1.2.1. Climate Relevance of Fiscal Measures in the G20 Related to the COVID-19 Crisis (Percent of GDP, left

Ms. Era Dabla-Norris, Mr. James Daniel, Mr. Masahiro Nozaki, Cristian Alonso, Vybhavi Balasundharam, Mr. Matthieu Bellon, Chuling Chen, David Corvino, and Mr. Joey Kilpatrick
Climate change is one of the greatest challenges facing policymakers worldwide, and the stakes are particularly high for Asia and the Pacific. This paper analyzes how fiscal policy can address challenges from climate change in Asia and the Pacific. It aims to answer how policymakers can best promote mitigation, adaptation, and the transition to a low-carbon economy, emphasizing the economic and social implications of reforms, potential policy trade-offs, and country circumstances. The recommendations are grounded in quantitative analysis using country-specific estimates, and granular household, industry, and firm-level data.