The Georgian Ministry of Finance (MoF) has continued to progress its analysis and reporting of fiscal risks, with its annual Fiscal Risk Statement (FRS) becoming the leading example in the region. In addition to detailed discussions of risks from SOEs and the balance sheet, amongst other, the December 2020 FRS included for the first time a qualitative discussion on the fiscal risks from climate change. Looking ahead, the government has committed to strengthening that further with the inclusion of quantitative estimates in the 2022 version of the FRS. This report provides the tools and analytical approaches to support that, as well as an update to the public sector balance (PSBS) sheet to identify the impact of the pandemic.
Maria Borga, Achille Pegoue, Mr. Gregory M Legoff, Alberto Sanchez Rodelgo, Dmitrii Entaltsev, and Kenneth Egesa
This paper presents estimates of the carbon emissions of FDI from capital formation funded by FDI and the production of foreign-controlled firms. The carbon intensity of capital formation financed by FDI has trended down, driven by reductions in the carbon intensity of electricity generation. Carbon emissions from the operations of foreign-controlled firms are greater than those from their capital formation. High emission intensities were accompanied by high export intensities in mining, transport, and manufacturing. Home country policies to incentivize firms to meet strict emissions standards in both their domestic and foreign operations could be important to reducing emissions globally.