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Decarbonisation and intergovernmental fiscal relations: Policy challenges and reform options

Author

Listed:
  • Luiz de Mello
  • Teresa Ter-Minassian

Abstract

This paper explores the nexus between decarbonisation and intergovernmental fiscal relations, focusing on related challenges and reform options. It highlights the significant role of subnational governments in tackling climate change. Subnational and national governments share responsibilities in areas such as taxation, spending and regulation pertaining to environmental protection, as well as climate change mitigation and adaptation, which calls for effective intergovernmental co-operation to align policy objectives and implementation strategies. The paper outlines decarbonisation requirements across sectors and discusses subnational government involvement in service delivery, investment, revenue generation and regulatory frameworks. Policy options to strengthen subnational contributions to national decarbonisation goals are presented. While focusing primarily on OECD countries, the paper acknowledges the need for improved information on subnational decarbonisation efforts in both advanced and developing countries.

Suggested Citation

  • Luiz de Mello & Teresa Ter-Minassian, 2023. "Decarbonisation and intergovernmental fiscal relations: Policy challenges and reform options," OECD Working Papers on Fiscal Federalism 43, OECD Publishing.
    • Handle: RePEc:oec:ctpaab:43-en
    DOI: 10.1787/c434c385-en
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    Cited by:

    1. Julio López-Laborda & Andoni Montes-Nebreda & Jorge Onrubia, 2023. "Going green through local fiscal equalisation," Working Papers 2023-07, FEDEA.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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