Search Climate Insights Directory

The document analyzes Botswana's transition from a 'skeletal tax state' under British colonial rule to a modern, efficient tax state. It highlights how early negotiations between colonial administrators and traditional chiefs prevented the tax rebellions seen in other colonies, and how the discovery of diamonds in the 1970s initially slowed broader tax reform due to high mineral revenues. The paper concludes that recent reforms, particularly after the 2008 global economic crisis, have successfully diversified the tax base through the introduction of VAT and improved administration via the Botswana Unified Revenue Service.

The policy brief argues that G20 countries should accelerate the phase-out of inefficient fossil fuel subsidies by adopting a clear timetable, increasing transparency through peer reviews, and ensuring targeted support for the poor. It highlights the success of voluntary peer review processes in APEC and the G20, and notes a growing international consensus—including commitments from G-7 countries to phase out such subsidies by 2025—to align fiscal policies with climate objectives.

The document argues that South Africa is stuck in a middle-income trap characterized by sluggish growth, deep inequality, and declining government effectiveness. It suggests a paradigm shift away from a state-led developmental model toward a labour-intensive, low-wage growth path and a knowledge economy built on private sector partnerships and technological innovation.

The report analyzes the reallocation of IDR 211 trillion (USD 15.6 billion) in fuel subsidy savings in Indonesia during 2015. It finds that funds were primarily redirected toward ministries' budgets, capital injections for state-owned enterprises (SOEs), and regional transfer funds. The study concludes that this shift from consumption to productive investment is aligned with the National Medium-Term Development Plan (RPJMN) 2015–2019, likely generating higher GDP and employment, and reducing the budget's vulnerability to international oil price volatility.

The document traces the evolution of the South African National Treasury from the transition to democracy, highlighting how it consolidated power through constitutional mandates, internal restructuring, and strong political backing from the ANC executive, particularly under Thabo Mbeki. It analyzes the shift from the Reconstruction and Development Programme (RDP) to the Growth, Employment and Redistribution (GEAR) policy, which cemented the Treasury's role as the guardian of fiscal discipline and neoliberal orthodoxy. The paper further examines the Treasury's attempts to balance central control with 'cooperative governance' through the Medium Term Expenditure Framework (MTEF) and the Public Finance Management Act (PFMA) of 1999. While these reforms improved transparency and reporting, the authors argue they often resulted in a 'compliance mentality' and failed to significantly improve service delivery or ensure genuine fiscal autonomy for sub-national governments. Finally, the paper discusses the Treasury's increasing political vulnerability following the 2007 Polokwane conference and the brief removal of Finance Minister Nhlanhla Nene in 2015, concluding that the institution remains a pivotal but contested site of power influenced by both domestic politics and global financial markets.

The report finds that Indonesia's current tax system does not incentivize sustainable land use in the palm oil industry, characterized by low tax-to-GDP ratios and minimal revenue redistribution to local governments. It proposes six fiscal reforms, including increasing land taxes and tying revenue sharing to sustainability indicators, to reduce deforestation and improve land productivity.

The report analyzes Indonesia's land-use revenue systems, finding that 93.5% of revenue is based on production rather than land size, which fails to disincentivize land expansion. It identifies high-potential areas for reform, including the Land and Building Tax, Forestry Non-Tax Revenue, and the use of Adjustment Funds for earmarking sustainable land use activities. The analysis also highlights how current central-to-regional revenue sharing may perversely encourage local governments to grant more land permits to increase their budgets.

The report examines the distribution of centrally financed fuel subsidies in India, highlighting a significant disparity where Bihar, one of the poorest states, consistently receives the lowest per capita transfers for diesel, LPG, and kerosene compared to wealthier states like Haryana, Delhi, and Gujarat.

The IMF's October 2015 Regional Economic Outlook for Sub-Saharan Africa describes a 'gloomy picture' for the region driven by falling commodity and oil prices, high energy costs, and a weak global financial environment. South Africa is highlighted as having the worst growth projection among its middle-income peers, with its economic performance hindered by critical electricity supply failures, poor export growth despite currency depreciation, and social unrest. The IMF recommends fiscal adjustments, currency depreciation, and long-term investments in productivity-enhancing infrastructure and education to counter these trends.

This executive summary by the Climate Policy Initiative analyzes the costs associated with India's goals to install 60 GW of wind and 100 GW of solar power capacity by 2022. It compares the levelized cost of electricity (LCOE) of these renewables against imported coal, evaluates the cost of current support mechanisms like accelerated depreciation, and proposes alternative financing models to reduce government expenditure.

In July 2014, Egypt implemented significant energy subsidy cuts, including a 64% increase in diesel prices, as part of a five-year plan to eliminate most energy subsidies. The reforms aimed to reduce the budget deficit and signal economic stability to investors. While the cuts caused an initial spike in inflation and public discontent among lower-income groups and transport operators, the broader economic outlook improved, and large-scale protests were avoided. The report notes that the government's compensation measures were limited and ad hoc, and that the success of future reforms will depend on more robust social safety nets and the management of politically sensitive products like liquefied petroleum gas (LPG).

The document analyzes the challenges of low tax bases in Africa, driven by factors such as tax avoidance by multinational corporations, over-generous fiscal incentives, and illicit capital flight. It evaluates the G-20/OECD BEPS project as a mechanism to close international tax loopholes and ensure profits are taxed where economic activity occurs. The author argues that while BEPS is a step in the right direction, African countries are under-represented in the process and must strengthen their voice through the UN Tax Committee and the African Tax Administration Forum (ATAF) to ensure outcomes are equitable.

The document examines the drivers and implementation of low-carbon policies in China, noting a transition from national targets to local design across provinces and industrial zones. While this approach allows for local adaptation and policy learning, it has created a complex, overlapping regulatory environment that causes industry uncertainty, risks high compliance costs, and may lead to capital lock-in of high-emitting technologies. The text also references a separate IISD study on the fiscal risks facing BRIICS nations, including China, due to the global transition away from fossil fuels.

The report analyzes Indonesia's transition from ad hoc fuel subsidies to a new pricing system introduced in January 2015, which aims to reduce wasteful spending by passing through international price changes. It evaluates 'good practice' across four dimensions—subsidies, pass-through, transparency, and enforcement—and examines case studies from China, Mexico, India, the Philippines, South Africa, and Thailand. The document argues that while full deregulation is the international benchmark for fiscal sustainability, Indonesia's constitutional constraints necessitate a robust, government-led mechanism. It recommends adopting variable taxes, improving real-time monitoring, and investing in non-pricing measures such as energy efficiency and targeted social safety nets to protect vulnerable groups from price volatility.

The document is a comprehensive manual for South African MPs to navigate the national budget cycle, understand the legal frameworks like the PFMA, and apply quantitative tools to assess budget priority, progress, equity, and adequacy.

The Climate Policy Initiative (CPI) is implementing a Production-Protection strategy in Indonesia, specifically in Central Kalimantan, to reconcile economic growth with environmental conservation. This approach focuses on increasing oil palm productivity through modern agricultural systems and a jurisdictional model to be developed by the end of 2015. The strategy involves partnerships with the Central Kalimantan Government, the Palangkaraya Institute for Land and Agricultural Research (PILAR), and the national Fiscal Policy Agency of the Ministry of Finance to align fiscal mechanisms with a green economy transition.

The workshop focused on leveraging international funds like the Green Climate Fund (GCF) and Climate Investment Funds (CIFs) to drive low-carbon investment in Brazil. Key discussions highlighted that a lack of long-term governmental strategic vision and internal organizational cultures in banks act as barriers to green investment. The event presented innovative financial instruments and case studies from Colombia and Mexico to demonstrate how blending concessional finance with private resources and risk mitigation tools can unlock climate-relevant investments.

The report finds that India's LPG subsidy system is highly regressive, primarily benefiting wealthy urban households while the poorest fifth of the population receives less than 1% of the total direct subsidy. While an initial household cylinder cap of six in September 2012 temporarily limited subsidy growth and improved distribution, subsequent increases of the cap to nine and then 12 cylinders effectively reversed these gains. The Direct Benefit Transfer (DBT) program is criticized for failing to decouple subsidy receipt from fuel consumption and for introducing administrative inefficiencies without improving equity or fiscal responsibility.

The author contends that the eurozone is facing a critical risk of deflation due to flawed austerity policies and the failure of the European Central Bank's conventional monetary tools. The text argues that standard quantitative easing (QE) is ineffective because it primarily benefits the wealthy and fails to stimulate lending during a 'liquidity trap'. As a solution, the document proposes 'overt money financing' or 'quantitative easing for the people' (QEP), which would involve the central bank providing debt-free money directly to governments to fund public works, tax cuts, or an unconditional basic income, thereby boosting demand without increasing public debt.

The report examines Sudan's fuel subsidy reform process, highlighting the September 2013 price hikes for petrol, diesel, and LPG. It analyzes the economic drivers, such as the loss of oil revenue following South Sudan's secession, and the subsequent social unrest and inflationary pressures. The document concludes with lessons learned regarding pricing systems, mitigation strategies, and the necessity of public support.