In theory, the pandemic created an opportunity for policymakers to recalibrate existing policies and develop new, innovative strategies to mobilise revenue and drive a green, inclusive, low-carbon recovery. In practice, this opportunity has largely been missed. Continuing to pursue an unsustainable recovery will put the achievement of the Sustainable Development Goals (SDGs) and the UNFCCC Paris Agreement climate targets out of reach.
Green fiscal policies (GFPs) have enormous potential to foster a sustainable low-carbon recovery in the Asia-Pacific region, as they can mobilise domestic revenue while furthering environmental and climate goals. Many GFPs, particularly carbon-energy taxes, can be implemented rapidly, because collection mechanisms and administrative structures are already in place. GFPs deliver not only positive environmental and climate outcomes, but also social, fiscal, and economic co-benefits, including employment, greater fiscal efficiency, revenue, investment incentives, and innovation. So far, however, although GFPs are recognised as supporting synergies in policymaking in Asia-Pacific, few GFPs can be identified in the region’s recovery packages.
A key lesson from implementing GFPs in the wake of the 2008 financial crisis is that short-term fiscal stimulus alone is not sufficient to drive a sustainable and sustained economic recovery: there is also a need for complementary pricing reforms, such as reform of fossil fuel price regulations. Pricing carbon, resources and pollution is an important precondition for the public and private investment in low-carbon infrastructure and green technology required to drive a sustainable recovery.
In the light of this, this workshop will explore the potential role of GFPs in greening the COVID-19 recovery with the aim of supporting public health efforts, reducing environmental and climate change risks, and strengthening resilience to future crises by embedding inclusive and sustainable socio-economic considerations in national economic planning.
This is one of a series of workshops implemented by the Green Fiscal Policy Network (GFPN) with regional partners to raise awareness and promote policy dialogue on the potential of GFP to support countries in their efforts to foster a green recovery, achieve the SDGs, and meet their NDC targets. ESCAP promotes regional cooperation for inclusive and sustainable development, including in the areas of macroeconomic policy and financing and environment and supports countries to “build forward better”, including through GFPs.