Macro-Fiscal Implications of Adaptation to Climate Change
Staff Climate Notes, March 23, 2022
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Bibliographic details
- Authors: Zamid Aligishiev, Emanuele Massetti, Matthieu Bellon
- Published: March 23, 2022
- Series: Staff Climate Notes
- DOI: https://doi.org/10.5089/9798400201608.066
Overview and purpose
- Adaptation to climate change is framed as an integral part of sustainable development and a necessity for advanced and developing economies alike.
- Core question: How can adaptation be planned for and mainstreamed into fiscal policy?
- Preconditions highlighted: setting up inclusive coordination mechanisms and strengthening legal foundations to incorporate climate change.
Four building blocks for mainstreaming adaptation
- 1. Taking stock of present and future climate risks, identifying knowledge and capacity gaps, and establishing guidance for next steps.
- 2. Developing adaptation solutions.
- Guided by extending the IMF three-pillar disaster resilience strategy to address changes in both extreme and average weather.
- Would cover: the prevention of risks, the alleviation of residual risks, and macro-fiscal resilience.
- 3. Mainstreaming these solutions into government operations.
- Requires strengthening public financial management institutions by factoring climate risks and adaptation plans into budgets and macro-frameworks, and in the management of public investment, assets and liabilities.
- 4. Providing for transparent evaluations to inform future plans.
- Involves continually monitoring progress and regularly updating adaptation plans.
Key findings and emphases
- Adaptation planning should be inclusive and legally grounded to be effective.
- The IMF three-pillar disaster resilience strategy is recommended to be extended to cover both extreme events and shifts in average climate conditions.
- Mainstreaming requires adjustments across public financial management, budgeting, macro-frameworks, public investment management, and asset and liability management.
- Transparent monitoring and regular updates of adaptation plans are essential for iterative improvement.
Subject and keywords
- Subject: Climate change, Climate finance, Environment, Natural disasters
- Keywords: adaptation, adaptation cost, aid, Climate change, Climate finance, copyright page, Global, IMF analysis, IMF staff Climate note, IMF staff Climate Note 2022/002, macro-fiscal framework, Natural disasters
Source: IMF Staff Climate Note — "Macro-Fiscal Implications of Adaptation to Climate Change", March 23, 2022.
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- Macro-Fiscal Implications of Adaptation to Climate Change; March 23, 2022