The Role of Green Fiscal Mechanisms in Developing Countries: Lessons Learned: Case Study

With an eye toward the Latin American and Caribbean (LAC) Region, this case study provides a practical guide to fiscal instruments that can promote climate change agendas, focusing on lessons learned from country experiences implementing these mechanisms. As most countries have historically relied on regulatory instruments to meet environmental goals, there are few documented studies of green fiscal policies in developing countries. This case study aims to add to that literature. The paper is divided into the following sections. It first discusses the role of fiscal policy in national climate change programming. It then analyzes the fiscal mechanisms used to promote climate change agendas, drawing on developing country cases. It continues to discuss the challenges that the Latin American context poses for green fiscal policy. Finally, it concludes with lessons learned and recommendations from country experiences implementing these mechanisms.