Strengthening Infrastructure Governance for Climate-Responsive Public Investment

Policy Papers, December 22, 2021

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Countries have committed, through the Paris Agreement and the Sustainable Development Goals (SDGs), to pursue climate targets and policies that would limit global temperature rise to well below 2 degrees Celsius, compared to pre-industrial levels.
A shift toward green public investment will help to mitigate greenhouse gas (GHG) emissions.
Substantial public investment will be necessary to build public infrastructure that makes economies more resilient to climate change and related natural disasters.
Climate change mitigation and adaptation challenges compound preexisting needs for public investment to foster the economic recovery from the pandemic and to meet the SDGs in a broader range of areas, often in a context of limited fiscal space.
Against this backdrop, a priority for all countries is to manage their public investment efficiently and effectively.

The IMF developed in 2015 the Public Investment Management Assessment (PIMA), which has already been applied in over 70 countries.
The current PIMA does not provide a sufficiently tailored assessment of how public investment management can support climate change mitigation and adaptation.

This paper introduces a new module to the current Public Investment Management Assessment (PIMA) framework, the “Climate-PIMA” (C-PIMA).
Goal of C-PIMA: to help governments identify potential improvements in public investment institutions and processes to build low-carbon and climate-resilient infrastructure.

Climate change mitigation and adaptation require a redirection and scaling of public investment while managing constrained fiscal space.
Improving institutions and processes for infrastructure governance (the planning, allocation, and implementation of public investment) is a priority to achieve climate-responsive public investment.