Climate Policy Diagnostic (CPD)

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The Climate Policy Diagnostic (CPD) provides countries with an in-depth analysis of their climate policies, focusing on mitigation and adaptation strategies and the necessary institutional and legal frameworks to support these policies.
The CPD complements other IMF climate capacity development tools, such as the C-PIMA (Climate-Public Investment Management Assessment) and Green Public Financial Management (PFM), and diagnostics from other international organizations like the World Bank Country Climate and Development Reports (CCDR).
The IMF has developed the Climate Macroeconomic Assessment Programs (CMAP) to offer a comprehensive approach for creating policy responses to the economic impacts of climate change; CMAP pilots were conducted in Samoa and Madagascar.
The CPD’s flexible and modular design is tailored to meet the specific needs, contexts, and challenges of each country and provides a detailed set of recommendations, including potential timelines and priorities, to help build long-term resilience.
The CPD has been instrumental in shaping the Resilience and Sustainability Facility programs in Tanzania, Moldova, Cabo Verde, and Honduras.
The CPD supports the design and implementation of fiscal policies that back countries’ climate strategies through three main pillars.

Government representatives can request a CPD through their country’s respective Executive Director office or by contacting IMF staff at FADCPCOOR@imf.org.

The IMF analyzes environmental, fiscal, economic, and distributional impacts of a wide array of mitigation policies, including carbon pricing, using the Climate Policy Assessment Tool (CPAT).
CPAT aids capacity development missions in assisting member countries to design and implement effective policies to achieve climate objectives.
Other analytical tools and resources used include:
- Vehicle Feebates Model
- Border Carbon Adjustment Model
- Fossil Fuel Subsidy Database
- Nationally Determined Contributions (NDC) conversions
Sector-specific mitigation advice covers transportation, energy, industry, forestry, and land use.
For fossil fuel exporters, guidance includes upstream mitigation measures and fiscal regime reform options to facilitate the energy transition.
Capacity development extends to compensating measures and social safety nets associated with mitigation policies.
The IMF conducts regional and country-specific workshops on analytical tools and climate mitigation policies (example: a recent workshop supporting Chile).

The IMF offers climate fiscal assessment and recommendations to help member countries meet climate goals and enhance resilience.
Capacity development covers sectoral fiscal policy issues, including water and energy sectors, and disaster risk financing and management.
The IMF leverages its database of country-level historical climate observations and future scenarios to assist countries in assessing future climate scenarios, including extreme events.
Support enables development of analytical insights and empirical evidence for integrating climate change into macro-fiscal planning and frameworks.

Capacity development includes evaluating institutional and legal frameworks underpinning implementation of climate policies.
Reviews assess climate strategies, policies, and frameworks for comprehensiveness and alignment with NDCs.
The IMF assesses institutional mechanisms supporting NDC implementation and offers recommendations for mainstreaming climate considerations into decision-making processes and developing internal capacities.