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The role of fiscal policy in climate change mitigation and adaptation in Malta

Author

Listed:
  • Juergen Attard
  • Larissa Vella

Abstract

Climate change has come to the forefront of social debate as changes in weather patterns and extreme weather events can severely threaten economic development and wellbeing. In this light, this analysis discusses the role of fiscal policy in climate change mitigation in Malta, by firstly outlining climate-relevant fiscal measures introduced over the last decade, and then assessing their respective impact on the fiscal balance. In this assessment, measures which help mitigate climate change are considered as ‘green’, while measures which are considered as harmful to climate change are deemed as ‘brown’. Between 2009 and 2020, green initiatives, excluding government investment and capital transfers, had a deficit reducing impact. The introduction of a number of brown measures, on the other hand, had a deficit increasing influence during the same period. The analysis also discusses some recent climate-relevant measures announced in Malta’s Recovery and Resilience Plan and in the 2022 Budget. This analysis concludes with a list of recently announced policy initiatives aimed at strengthening the country’s resilience to climate change. This includes initiatives to encourage the use of less polluting behaviour, afforestation programs, the renovation of neglected rural and urban areas into green parks as well as other major climate-relevant projects.

Suggested Citation

  • Juergen Attard & Larissa Vella, "undated". "The role of fiscal policy in climate change mitigation and adaptation in Malta," CBM Policy Papers PP/03/2022, Central Bank of Malta.
    • Handle: RePEc:mlt:ppaper:0322
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    File URL: https://www.centralbankmalta.org/site/Publications/Economic%20Research/2022/Fiscal-policy-role-climate-change.pdf?revcount=9605
    File Function: First version, 2022
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    References listed on IDEAS

    as
    1. D. Cornille & R. Schoonackers & P. Stinglhamber & S. Van Parys, 2021. "Fiscal policy instruments to mitigate climate change – A Belgian perspective," Economic Review, National Bank of Belgium, issue iii, pages 79-103, december.
    2. K. Van Cauter & L. Van Meensel, 2009. "Towards more environmental taxes ?," Economic Review, National Bank of Belgium, issue iii, pages 75-92, September.
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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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