The State of Fiscal Policy for Climate Action: 2023 Baseline Survey for Latin America and the Caribbean

Ministries of economy and finance (MEFs) play an increasingly important role in the climate agenda since fiscal policy decisions have a major impact on the behaviors of economic agents and shape countries development prospects. In this context, it is helpful to establish the extent to which MEFs are mainstreaming climate action into fiscal policy, whether they are doing so comprehensively or partially, which areas of fiscal policy show the greatest progress or gaps, and which countries in Latin America and the Caribbean (LAC) show the most progress and which the least. This report seeks to address these questions through a survey conducted in 2023 on 41 variables using data available on the official websites of government agencies or international organizations. The main findings of this study are the following: (i) the vast majority of MEFs in the LAC region have made some progress on mainstreaming climate action into fiscal policy/management, although very few do so in a comprehensive manner; (ii) from a comparative standpoint, the greatest progress has been made on strategic planning, macroeconomic fiscal management, and revenue policy and management; (iii) the least progress is observed in financing policy and expenditure policy/management; and (iv) among LAC countries, the top three performers are Chile, Colombia, and Costa Rica, despite major climate fiscal policy reforms pending in these countries. In conclusion, the information compiled can be useful for monitoring and evaluating future MEF actions in the area of climate change, and this report seeks to take the first step toward establishing a baseline in this regard.