IMF Staff Country Reports

This Selected Issues paper focuses on policies to address climate change in Ukraine. The war has been a setback to continued progress on Ukraine’s climate objectives. Over the longer term, Ukraine has potential to implement policies that internalize climate-related priorities as well as reconstruction, macroeconomic stability, and social protection priorities. Ukraine is vulnerable to climate change from substantially warmer temperatures and more volatile rainfall patterns that may arise under more severely adverse climate scenarios. Essential investments in climate change adaptation will need to be taken with a view toward avoiding debt vulnerabilities. Ukraine’s investment needs in this area are moderate sized. Ukraine should be in a position to make these investments over the longer term, including after debt sustainability has been restored, without causing debt vulnerabilities to re-emerge. Carbon pricing policies can help achieve climate objectives and deliver significant revenue generation.