Republic of Palau: Selected Issues
IMF Staff Country Reports, December 21, 2023
Source details
- Canonical URL
- Republic of Palau: Selected Issues
Other formats
Bibliographic details
- Published: December 21, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400261022.002
Climate change adaptation and planning
- Adaptation can be very effective at reducing the cost of sea-level rise, but it requires careful planning and a balanced mix of protection and planned retreat.
- To be effective and efficient, adaptation to climate change must be an integral part of development planning.
- With many competing needs, the government must carefully allocate resources across all possible uses, including adaptation to climate change, while considering the distributional effects of its programs.
Mitigation targets and renewable energy
- Palau’s conditional mitigation targets are ambitious.
- Palau can continue to drive investments toward renewable infrastructure and explore complementary policies.
- With the introduction of a new solar farm, Palau is expected to increase its renewable generation share to 20 percent in the near future.
Carbon pricing and economic implications
- Carbon pricing can play a role in reducing emissions, raising revenues, and driving the transition.
- Palau’s effective carbon price on diesel and gasoline are high compared to other island economies.
- With Palau’s reliance on imported goods and tourism, the global mitigation agenda may affect Palau’s economy.
Cross-cutting policy considerations
- Integrate adaptation into broader development planning to ensure cost-effectiveness and efficiency.
- Balance protection and planned retreat strategies when addressing sea-level rise risks.
- Carefully allocate limited government resources across competing priorities, accounting for distributional effects.
- Promote renewable infrastructure investments and complementary policies to meet ambitious mitigation targets.
- Consider carbon pricing as a tool for emissions reduction and revenue generation, while assessing economic impacts given Palau’s exposure to imports and tourism.
Content in this bundle
- Republic of Palau: Selected Issues; IMF Country Report No. 23/431; November 13, 2023