The United Nations Environment Programme’s Emissions Gap Report 2023 projected an increase in greenhouse gas (GHG) emissions by 2030 of 3%, based on current policies, while it had been 16% at the time of the Paris Agreement’s adoption in 2015. This was considered good news, but it was recognized that by 2030, GHG emissions would still need to decrease by 28% and 42% to achieve global average temperature increases of 2°C and 1.5°C, respectively, by the end of the century.

Current plans, as reflected in the nationally determined contributions (NDCs), were putting humanity on a path toward an increase of 2.4°C–2.6°C. Therefore, there was an urgent need to intensify mitigation actions to change this trajectory. Mitigation actions were aimed at decreasing the amount of GHG emissions released into the atmosphere and reducing the concentration of carbon dioxide by enhancing sinks (e.g., the expansion of forests).

Episode 3 of the Webinar Series on the Economics of Climate Change focused on fiscal policies, which included government spending and taxation and were recognized as powerful instruments for supporting climate change mitigation. Through specific country examples, it also highlighted how fiscal space could be used to support GHG emissions reduction.