Conference Agenda

Theme: Drawing on the Coalition of Finance Ministers for Climate Action flagship initiative on Economic Analysis for Green and Resilient Transitions, this session will explore how the environmental economics research community can ensure its work directly responds to the analytical needs and most pressing policy questions Ministries of Finance (MoFs) face as they seek to mainstream climate considerations into economic decision-making and support the design of climate policy packages. The focus will be on strengthening the practical usefulness of economic analysis tools and methods for MoFs, particularly given the scale, complexity, and uncertainty associated with climate risks and green transitions.

 

Relevance to environmental or natural resource economists: For researchers, the session provides an opportunity to explore and reflect on how analytical approaches can better serve public-sector economic institutions. MoFs are major users of economic analysis for policy design, budgeting, investment planning, and risk assessment. Ensuring that the economic analyses and tools developed by the research community are accessible, transparent, and grounded in the realities of policymaking is essential for supporting effective climate-informed economic decisions. The MoF-led Economic Analysis for Green and Resilient Transitions initiative highlights several priorities that will be explored: focusing research on the needs of MoFs and other economic stakeholders, developing tools that are simple, transparent, and useable across different levels of analytical capacity, and encouraging further inter-model comparison and the assessment of model performance to ensure evidence is robust.

 

Motivation and framing: MoFs play a critical role in realising green and resilient transitions through whole-of-government action given their responsibility for budgets, investment strategies, and economic policy. Robust analysis of the direct and indirect impacts of climate change and the economic implications of transitioning to green and resilient economies is fundamental to this role. However, many MoFs lack analytical tools that help them answer the questions they face in practice. Existing tools can be overly complex, opaque, or geared towards stylised scenarios rather than the concrete policy decisions Ministries must make, leaving governments without practical options that can be readily applied, maintained, or updated.

This underscores the opportunity for national and regional analytical ecosystems of universities, government institutions, and international organisations to develop fit-for-purpose methods and analyses to support decision-makers. A recent world-first, extensive review of existing analytical tools relevant to MoFs points to areas where improvements could be especially valuable: integrating physical climate risks and adaptation into macroeconomic analysis; assessing uncertainty at scale; analysing combinations of policy measures; understanding technology-cost trajectories; evaluating competitiveness implications of climate and climate-related trade policies; examining co-benefits and non-market impacts; incorporating financial system linkages; and assessing distributional effects across different groups.

The purpose of the session is to discuss these MoF needs with the research community and to encourage closer, ongoing engagement between academic institutions and Ministries of Finance. By aligning research agendas with the fiscal, macroeconomic, and policy assessment challenges MoFs face, designing tools that are accessible and relevant to day-to-day decision-making, and engaging directly with MoF analysts and policymakers in development processes, the research community can help strengthen climate-informed economic policymaking.