{
  "title": "Policies to Achieve Spain’s Climate Objectives: Spain",
  "publication": "Selected Issues Papers, June 13, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2025/06/13/policies-to-achieve-spains-climate-objectives-spain-567735",
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  "summary": "Spain aims to cut greenhouse gas emissions, which implies further 30 percent cut from 2023 levels by 2030, requiring new measures beyond current efforts. Emission intensity varies widely across Spanish firms, offering potential for reductions by incentivizing laggards to match less-polluting peers.",
  "sections": [
    {
      "heading": "Summary of objectives and context",
      "content": "- Spain aims to cut greenhouse gas emissions, which implies further 30 percent cut from 2023 levels by 2030.\n- Emission intensity varies widely across Spanish firms, creating potential gains by incentivizing lagging firms to match less-polluting peers.\n- Spain has limited fiscal space, constraining reliance on public spending to achieve targets.\n- The ongoing EU-ETS expansion is an important external development that could be complemented with domestic actions."
    },
    {
      "heading": "Key findings",
      "content": "- A further 30 percent cut from 2023 levels by 2030 requires new measures beyond current efforts.\n- Emission heterogeneity at the firm level suggests substantial potential for emissions reductions through targeted policies that encourage lagging firms to adopt technologies or practices of cleaner peers.\n- Relying mainly on public spending—such as subsidies or investments—would be costly and insufficient to meet the 2030 target.\n- Carbon pricing is identified as the most effective, cost-efficient, and fiscally attractive option for achieving Spain’s climate objectives, particularly given constrained fiscal space.\n- Complementing the EU-ETS expansion with domestic measures can enhance the role of carbon pricing in meeting national goals."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Prioritize carbon pricing instruments as the central policy tool to achieve emissions reductions in a cost-effective and fiscally sustainable manner.\n- Design complementary domestic actions to bolster the impact of the EU-ETS expansion, ensuring that EU-level changes translate into effective national outcomes.\n- Leverage firm-level emission heterogeneity by:\n  - Incentivizing lagging firms to adopt technologies and practices of less-polluting peers.\n  - Targeting policies to sectors or firms with high emission intensity for greater cost-effectiveness.\n- Limit overreliance on public spending; use fiscal resources strategically to support carbon pricing implementation and targeted transitions where market failures impede rapid adjustment.\n\n---\n\n Content in this bundle\n\n- Policies to Achieve Spain’s Climate Objectives; IMF Selected Issues Paper No. 2025/079; May 16, 2025\n  - Policies to Achieve Spain’s Climate Objectives; IMF Selected Issues Paper No. 2025/079; May 16, 2025 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Policies to Achieve Spain’s Climate Objectives; IMF Selected Issues Paper No. 2025/079; May 16, 2025 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/06/13/policies-to-achieve-spains-climate-objectives-spain-567735"
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    "Authors: Damien Capelle, Divya Kirti, Ana Lariau, Nicola Pierri, Ippei Shibata, Germán Villegas-Bauer",
    "Published: June 13, 2025",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229015165.018",
    "Spain aims to cut greenhouse gas emissions, which implies further 30 percent cut from 2023 levels by 2030.",
    "Emission intensity varies widely across Spanish firms, creating potential gains by incentivizing lagging firms to match less-polluting peers.",
    "Spain has limited fiscal space, constraining reliance on public spending to achieve targets.",
    "The ongoing EU-ETS expansion is an important external development that could be complemented with domestic actions.",
    "A further 30 percent cut from 2023 levels by 2030 requires new measures beyond current efforts.",
    "Emission heterogeneity at the firm level suggests substantial potential for emissions reductions through targeted policies that encourage lagging firms to adopt technologies or practices of cleaner peers.",
    "Relying mainly on public spending—such as subsidies or investments—would be costly and insufficient to meet the 2030 target.",
    "Carbon pricing is identified as the most effective, cost-efficient, and fiscally attractive option for achieving Spain’s climate objectives, particularly given constrained fiscal space.",
    "Complementing the EU-ETS expansion with domestic measures can enhance the role of carbon pricing in meeting national goals.",
    "Prioritize carbon pricing instruments as the central policy tool to achieve emissions reductions in a cost-effective and fiscally sustainable manner.",
    "Design complementary domestic actions to bolster the impact of the EU-ETS expansion, ensuring that EU-level changes translate into effective national outcomes.",
    "Leverage firm-level emission heterogeneity by:",
    "Limit overreliance on public spending; use fiscal resources strategically to support carbon pricing implementation and targeted transitions where market failures impede rapid adjustment.",
    "**Policies to Achieve Spain’s Climate Objectives; IMF Selected Issues Paper No. 2025/079; May 16, 2025**"
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