## Environment and Climate Data to Support Policy Decisions

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**Canonical URL:** [Environment and Climate Data to Support Policy Decisions](https://www.imf.org/-/media/files/capacity-developement/d4d/june-2024/02-d4d-climate.pdf)

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### Overview and Strategic Context
- Climate change is described as "an existential threat to long-term growth and prosperity."
- IMF’s Climate Strategy (2021) goal: “provide high quality, granular, and tailored advice to the membership on macroeconomic and financial policy challenges related to climate change”
- Systematic and strategic integration of climate change into the IMF’s activities across: Surveillance and Analytical Work; Capacity Development and Data; Cooperation and Coordination; Lending.
- Presentation delivered by Ms. Alessandra Alfieri, Assistant Director, IMF Statistics Department, JUNE 19, 2024 at the D4D FUND STEERING COMMITTEE MEETING.

### Capacity Development in Statistics: Main Topics
- GHG Emissions and Carbon Footprints:
  - Air emission accounts
  - Energy accounts
  - Carbon footprints
- Climate Risk Assessment:
  - Physical and transition risk indicators
  - Methodological framework
  - Climate scenario analysis
  - Tools (including geospatial tool)
- Climate Finance:
  - Taxonomies
  - Data collection
  - Experimental indicators
- Climate Mitigation and Adaptation:
  - Government climate impacting subsidies
  - Climate expenditures
- Emerging Areas:
  - Land cover/ Water accounts/Forest/Mineral and energy resources (incl. renewable energy)
  - Biodiversity

### STA – SECO Capacity Development Program: Structure and Countries
- Objective: Assist economies in establishing climate change statistics programs.
- Three-Phase Approach:
  1. Diagnostic Assessment
  2. Training and Workshops
  3. Technical Assistance
- Participating countries listed: Bangladesh; Vietnam; Indonesia; Colombia; Peru; Algeria; Ghana; Egypt; Mozambique; South Africa.

### Program Outputs, Partnerships, and Risk Indicators
- 2025 Outputs:
  - Medium term workplans
  - Focused on establishing energy and air emissions accounts by April 2025 for most countries aimed at providing information on energy transition and mitigation policies
- Partnerships and Collaboration:
  - Strong emphasis on both domestic and international cooperation.
  - Leverage existing initiatives from: World Bank (CCDR); United Nations Statistics Division (UNSD); United Nations Development Programme (UNDP); Statistics Denmark (in Vietnam)
- Risk Indicators:
  - Developing forward-looking physical and transition risk indicators and testing in Mozambique
  - Leveraging big data

### Rationale and Emerging Needs
- Key constraints noted: Trust / Auditability; Incomplete information; Costs for granular data; Availability of forward-looking data; Specific location information.
- Core messages:
  - “Climate is macro-critical”
  - Policymakers need data to develop policies – mitigation, adaptation, transition to net zero - and monitor their impacts
  - Need environment and climate change statistics rooted in international statistical standards, comparable over time and that can be integrated with economic statistics
  - Countries are requesting capacity development programs to fill data gaps
- Emerging needs in the area of:
  - Adaptation: physical and transition risk indicators
  - Fiscal indicators
  - Resilience and Sustainability Facility

### Physical and Transition Risk Indicators: Concepts and Framework
- Risk measurement approach:
  - Events (Hazard/ Event) × Exposure × Vulnerability integrated with climate scenarios.
  - Two event types:
    1. Physical Events + Exposure (e.g., Extreme Weather; Precipitation; Drought; Floods; Wildfires; Tropical Cyclones; Sea Level Rise; Others)
    2. Transition Events + Vulnerability (e.g., Shifts in Economic Policy (carbon taxation, subsidy regime shifts); Technological advancements; Changes in Consumer and Market Sentiment; Changes to Legal Frameworks)
- Definitions highlighted:
  - Climate related event: The potential occurrence of a physical event (flood, extreme weather etc.) or transition related event (e.g., policy measures).
  - Exposure: The presence in places/ settings that could be adversely affected. E.g. exposure to population, built-up area, crops, public structure etc.
  - Vulnerability: The propensity or predisposition to be adversely affected. Information on mitigation factors, including social, cultural and natural.
- Noted initiative:
  - G20 initiative on Forward looking Physical and Transition Risk Indicators
  - A concept note was prepared and presented to G20 countries, and the definitions and methodological framework were provided.

### Applications and Use Cases
- How results can be used:
  - Natural Hazards → Damages
  - Financial Sector → Risk Analysis
  - Economic → Risk Analysis
- Geographic observation: “FLOOD RISKS ARE WIDESPREAD ACROSS SEVERAL GEOGRAPHICAL REGIONS”

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_Source: https://www.imf.org/-/media/files/capacity-developement/d4d/june-2024/02-d4d-climate.pdf_