Read the Report: Long-Term Strategies for Climate Change - A Review of Country Cases
The Coalition of Finance Ministers for Climate Action (“Coalition”) is a group of fifty-two finance ministers, as of June 2020, engaged in efforts to address climate change through fiscal and economic policy. Peer learning and knowledge exchange play a strong part in the Coalition’s success.
This report ("Report") is a first step in the Coalition’s work to helping its member countries to design their long-term strategies. Such strategies are currently being developed. This is a very challenging task, requiring competencies, commitments, tools and governance structures to manage horizontal requirements of the work. Finance ministers are becoming more and more involved in the preparation of such strategies as economic implications of climate change and policy actions become visible. This Report approaches the topic through countries experiences, drawing from practical challenges and ways to overcome them.
The Report will provide a useful overview to the Coalition members and institutional partners working on transition aspects. It will also provide the basis for future work priorities of the Coalition, and especially on areas to deepen the analysis and broaden it to new country cases.
Strategic relevance and Mandate
Helsinki Principles set out the strategic objectives for the Coalition. Helsinki Principles recognize climate change as an opportunity, and that taking action can generate substantial benefits for our societies by stimulating technological innovation, improving human well-being, and accelerating economic growth. Helsinki Principles state that finance ministers are in a unique position to help accelerate a just transition to a low-carbon and climate-resilient economy through their economic policy tools. Finance ministers have a common purpose and can benefit from sharing experiences and facilitating the adoption of best practices and policies for low-carbon and climate-resilient growth. The Principles also acknowledge that such policies and actions will support global collective action on climate change under the Paris Agreement.
The Helsinki Principle 1 sets out the strategic basis of Coalition’s objectives for aligning our policies and practices with the Paris Agreement commitments; Helsinki Principle 2 states that the Coalition Members Share experience and expertise with each other in order to provide mutual encouragement and promote collective understanding of policies and practices for climate action.
The Santiago Action Plan agreed by finance ministers on 9 December 2019 states that achieving low carbon and climate resilient economies by mid-century requires structural economic changes. Finance Ministries wield fiscal, economic, financial and planning instruments to facilitate a smooth trajectory of transition and are well positioned to play a lead role in the development of long-term transition strategies. Ministers agree that key actions and deliverables under Helsinki Principle 1 include:
- Reviewing the existing body of long-term transition strategies in selected countries, providing comparative analysis of related challenges and opportunities, and delivering country case studies.
- Examining transition implications more broadly to cover the economic impacts and opportunities on citizens, businesses, and economies in order to help inform policy actions. The effort will benefit from ongoing work of institutional partners in mapping out the various policy instruments for decarbonization and adaptation that are relevant to Ministries of Finance.
This Report draws together the experience of a selection of Coalition’s member countries implementing long-term climate strategies. It has been prepared on the basis of Coalition’s Action Plan and benefited from feedback of the Coalition members and the institutional partners in the Sherpa meetings. Sitra has compiled the Report with support of the World Bank acting also as the secretariat for the Coalition.
The Report describes the long-term strategies and draws general lessons on the review of approaches, identifies bottlenecks and challenges, identified policy instruments utilized to meet the objectives, management of the practical work and process of preparations of the long-term strategies.
This Report is a working document of the Coalition. Opinions and point of views expressed in this Report are those of the authors and do not necessarily reflect the views of the Coalition or its members. The main findings of the Report will be presented to Finance Ministers. It serves as contribution to the further policy considerations and planning of the Coalition’s further work.
The primary audience for this report is policy makers at the Ministries of Finance and Economy that are typically responsible for cross-sector economic coordination, public finance, and fiscal policy, all of which are needed in formulating long-term strategies. This Report is intended to complement existing body of work that provide step-by-step methodologies for preparing low emission plans for the long-term.
The Report should benefit other ministries, institutions and academia involved in the work on long-tern strategies, and especially those in the lead-roles at national and international levels. In the on-going work of the Coalition this Report is intended as background paper on ministerial level discussions.
Pekka Morén Lorena Palomo
Co-Chairs of Sherpas, Coalition of Finance Ministers for Climate Action