Republic of North Macedonia: Selected Issues

IMF Staff Country Reports, January 26, 2024

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The Selected Issues paper focuses on challenges and policies regarding climate change in the Republic of North Macedonia.
A scale-up of private and public investments, along with decommission of old and polluting coal-based power plants, is needed to adapt to climate change and meet emissions targets as part of the green transition.
The EU-Carbon Border Adjustment Mechanism (EU-CBAM) from 2026 will affect North Macedonia.
The introduction of the EU CBAM will influence North Macedonia’s exports to the EU negatively, as well as revenue collected, as part of the EU CBAM will be foregone revenue for North Macedonia.

Consider a gradual introduction of carbon taxation to prepare for the EU-CBAM, as also envisioned in existing legislation.
Implement carbon taxation to allow the state to collect revenue that would otherwise be foregone under EU-CBAM arrangements.
Recycle part of carbon-tax revenues to mitigate the impact of the carbon tax on affected parties and to further support the green transition.
Scale up both private and public investments to finance adaptation to climate change and the decommissioning of old coal-fired power plants.

Subjects: Central bank policy rate, Climate change, Commodities, Electricity, Environment, Financial services, International organization, Monetary policy, Production, Productivity, Total factor productivity
Keywords: Central bank policy rate, Climate change, climate policy agenda, Electricity, Europe, Global, interest rate pass-through, interest rate transmission, long term interest rates pass-through, Productivity, productivity competition, Total factor productivity

Republic of North Macedonia: Selected Issues; IMF Country Report No. 24/27; January 4, 2024
- Republic of North Macedonia: Selected Issues; IMF Country Report No. 24/27; January 4, 2024 (Markdown version)
- Republic of North Macedonia: Selected Issues; IMF Country Report No. 24/27; January 4, 2024 (PDF)