A Low-Carbon Future for the Middle East and Central Asia: What Are the Options?” has been prepared by Gareth Anderson, Jiayi Ma, Tokhir Mirzoev, Ling Zhu, and Karlygash Zhunussova and published by the International Monetary Fund. This departmental paper is based on the second IMF study devoted to macroeconomic challenges associated with climate change in the Middle East and Central Asia (ME&CA). It follows a departmental paper, released earlier this year, that highlighted the urgency and macro-critical nature of the region’s climate adaptation needs and called for embedding adaptation policies in countries’ medium-term inclusive growth agendas.

The purpose of this departmental paper is to identify the menu of fiscal policy options which would allow the region to fulfil its emissions reduction commitment. Specifically, the paper examines and estimates the trade-off between two broad categories of fiscal policies: public investments, for example in renewable sources of energy, and measures that raise the effective price of fossil fuels.

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