This paper analyzes how fiscal policy can address challenges from climate change in Asia and the Pacific, particularly how policymakers can promote mitigation, adaptation, and the transition to a low-carbon economy, emphasizing the economic and social implications of reforms, potential policy trade-offs, and country circumstances. It outlines recommendations grounded in quantitative analysis using country-specific estimates and household, industry, and firm-level data. It examines why tackling climate change is an imperative for Asia and the Pacific, as well as where Asia stands on greenhouse gas emissions and the intensity of weather-related natural disasters relative to other regions; how the region can accelerate mitigation efforts, the implications of gradually introducing a carbon tax over the next decade on emissions and fiscal revenues, and the complementarities and trade-offs between carbon taxes and other policy tools to cut emissions; how carbon tax revenues can be used to enhance economic efficiency and the political acceptability of higher carbon pricing, the complementary measures required to address distributional impacts for households, industries, firms, and workers, and how they vary across countries; how the region can adapt to climate change, the fiscal costs of making infrastructure more climate-resilient across different countries, and the costs and benefits of scaling up adaptation investment and implications for debt sustainability; and how fiscal policy can support a transition to a low-carbon economy, the policy measures that can promote innovation and investment in climate-smart technologies, and their deployment in response to the COVID-19 crisis. Annotation ©2021 Ringgold, Inc., Portland, OR (protoview.com)
