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Adapting Fiscal Decentralization Design to Combat Climate Change

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  • Jorge Martinez-Vazquez

    (International Center for Public Policy, Georgia State University, USA)

Abstract

There are still many countries around the world that have not effectively engaged their subnational governments in their climate change strategies and policy frameworks. Where subnational levels are involved, generally they still play a relatively small role. This paper examines how the principles of fiscal decentralization design (in expenditure and revenue assignments, transfers, and borrowing) can be adapted for successfully engaging subnational governments in fighting climate change. In addition, the paper critically reviews already ongoing promising and unhelpful international practices engaging those subnational governments in climate-change mitigation. Shared responsibility for policy and program design and implementation, fee- or charge-funded adaptation activities, objective-targeted intergovernmental transfers, and the use of green bonds are some of the most promising approaches analyzed. Clearly, there is ample space ahead for the further involvement of subnational governments across the world in combating climate change.

Suggested Citation

  • Jorge Martinez-Vazquez, 2021. "Adapting Fiscal Decentralization Design to Combat Climate Change," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2105, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper2105
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    File URL: https://icepp.gsu.edu/files/2021/02/21-05-FiscDecentClimateChange.pdf
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    Cited by:

    1. Sean Dougherty & Andoni Montes Nebreda, 2022. "Going global, locally? Decentralized environmental expenditure and air quality," Public Sector Economics, Institute of Public Finance, vol. 46(4), pages 489-503.
    2. Luiz de Mello & João Tovar Jalles, 2022. "Natural disasters, epidemics and intergovernmental relations: More or less decentralisation?," Working Papers REM 2022/0248, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Daniela Kletzan-Slamanig & Angela Köppl & Hans Pitlik & Margit Schratzenstaller, 2023. "Der Finanzausgleich als Hebel zur Umsetzung der österreichischen Klimaziele. Handlungsfelder und konzeptionelle Grundlagen," WIFO Studies, WIFO, number 70785, April.
    4. Maria Cadaval Sampedro & Ana Herrero Alcalde & Santiago Lago-Peñas & Jorge Martinez-Vazquez, 2022. "Extreme events and the resilience of decentralized governance," Working Papers. Collection A: Public economics, governance and decentralization 2212, Universidade de Vigo, GEN - Governance and Economics research Network.
    5. de Mello Luiz & Martinez-Vazquez Jorge, 2022. "Climate Change Implications for the Public Finances and Fiscal Policy: An Agenda for Future Research and Filling the Gaps in Scholarly Work," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 194-198, January.

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