The Fiscal Implications of Climate Change
Policy Papers, February 22, 2008
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- The Fiscal Implications of Climate Change
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Bibliographic details
- Published: February 22, 2008
- Series: Policy Papers
Summary findings
- The paper reviews the fiscal implications of climate change and the potential role of the Fund in addressing them.
- The potential fiscal implications are immediate as well as lasting, and liable to affect—in differing forms and degree—all Fund members.
- Climate change is a global externality problem, calling for some degree of international fiscal cooperation.
- Climate change has features that raise difficult technical and ethical issues, and hinder policy coordination, including:
- an intertemporal mismatch between the (early) costs of action to address climate change and (later) benefits;
- pervasive uncertainties and irreversibilities (including risk of catastrophe);
- sharp asymmetries in the effects on different countries.
- In addition to itself impacting the public finances, climate change calls for deploying fiscal instruments to mitigate its extent and adapt to its remaining effects.
Fiscal implications and technical issues
- Immediate and lasting fiscal impacts are expected to affect all Fund members in differing forms and degree.
- Key complicating features:
- Intertemporal mismatch: early costs vs later benefits.
- Uncertainty and irreversibility, including risk of catastrophe.
- Asymmetric country-level effects that complicate coordination and raise ethical issues.
Role of fiscal policy and the Fund
- Fiscal instruments are needed both to mitigate climate change and to fund adaptation to remaining effects.
- The global externality nature of climate change implies a need for some degree of international fiscal cooperation.
- The paper considers the potential role of the Fund in addressing fiscal implications and facilitating policy responses (detailed operational recommendations are contained in the paper itself).
Publication metadata and contextual notes
- Publication date: February 22, 2008
- The paper notes: "The views expressed in this paper are those of the staff and do not necessarily reflect the views of the Executive Board of the IMF. The Executive Board's assessment is summarized in the Public Information Notice. Some country-specific or market-sensitive information may have been deleted from this paper, as allowed by the IMF's publication policy."
- Subject keywords: Fiscal reforms, Fiscal stability, Oil production, Oil revenues, Public finance
- Related IMF resource count referenced: "Our eLibrary offers over 25,000 IMF publications in multiple formats."
The Fiscal Implications of Climate Change — IMF policy paper (February 22, 2008). Canonical URL: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/the-fiscal-implications-of-climate-change-pp4238 (accessed 9/6/2026).
Content in this bundle
- The Fiscal Implications of Climate Change; IMF Fiscal Affairs Department, March 2008.