High-Level Dialogue: Building Fiscal Resilience

Thursday, 20 April 2017

This dialogue will focus on how the rapid development of decentralized sustainable low-carbon energy production—and policies that make it feasible—can enhance the investment value of money financial sector leaders, especially finance ministers, are responsible for.

Climate disruption is a macro-critical influence that changes all other areas of value exchange, by affecting the shape of the overall economy. Carbon Risk, for instance, encompasses:

devaluation risk for investments that rely on carbon-intensive practices;
disaster response risk for communities facing climate impacts;
nonlinear climate and economic threats to global food and fresh water supplies;
risk of instability in under-resilient financial institutions;
macro-scale devaluation risk, due to redirected spending and decreased growth; and
the risk of political destabilization of nation-states.

Effectively addressing macro-critical devaluation risk will enhance the productive capacity of any given dollar of investment, building fiscal health and resilience.

This convening will aim to put implementable strategies and actions on the table for future multilateral negotiations, so member countries are better positioned as key strategic partners in the global effort to build a durable prosperous low-carbon economy.

Moderated by Rachel Kyte, Special Representative of the UN Secretary-General and CEO Sustainable Energy for All, this dialogue is convened under the Chatham House Rule, to allow for the most open possible sharing of information and brainstorming for innovative solutions.

The dialogue will be a moderated discussion, designed to feed immediate outcomes into the annual High-Level Assembly of the Carbon Pricing Leadership Coalition, later the same day. All participants receive a formal invitation from the co-conveners and a full Participants’ Brief outlining the issues to be explored.

Themes & Recommendations

Building on the work done in previous dialogues, we invite participants to input their key questions and best-practice recommendations in service of best-case outcomes in the following areas:

Minimizing future high-carbon dependency
Business models that empower decentralized entrepreneurial value generation
Policy options to build macro-critical resilience
Carbon pricing policies optimized to local economic needs
Sharing resources to maximize built-in fiscal resilience

UPDATE: 4 July 2017

Guidance on Fiscal Resilience for G20 Ministers

The following actionable priorities and insights emerged from the Fiscal Resilience dialogue and have been circulated to ministers in the G20 Summit negotiating process:

Ease structural market constraints that limit low-carbon investment;
Address macrocritical areas of concern;
Decouple future growth from climate-forcing emissions;
Steer incentives toward low-carbon energy strategies;
Align core budget areas with durable climate-smart resilience.

These actionable priorities are outlined in greater detail here.

UPDATE: 14 December 2017

Fiscal Resilience Priorities Lead to Resilience Intel Coalition effort

The five actionable priorities outlined above as outcomes of this dialogue and guidance for ministers in the G20 process, have also led to the creation of the Resilience Intel climate-smart finance aggregation initiative. On 13 December 2017, one day after the One Planet Summit marked the two-year anniversary of the Paris Agreement, we held a working dialogue on Resilience Intel priorities.

The substance of that dialogue is outlined here, and Resilience Intel is explained in more detail here.