G20 High Level Tax Symposium on Tax Policy and Climate Change

Ministers discussed tax policy and climate change

The challenge of climate change is at the heart of the G20 2021 agenda, focused on People, Planet and Prosperity. Climate change is a major threat to our people. Urgent collective action is needed to reduce greenhouse gas emissions with the goal of achieving carbon neutrality by mid-century.

The G20 High Level Tax Symposium on Tax Policy and Climate Change was held in Venice on July 9, ahead of the G20 Finance Ministers and Central Bank Governors meeting on July 9-10 and the Venice International Climate Conference on July 11. This event provided a unique opportunity for finance ministers from G20 countries to discuss the role that tax policy can play in supporting and promoting transitions to a greener and more sustainable economy.

Ministers reaffirmed that achieving the common goal of net zero emissions by mid-century is a priority and that tax policy can help achieve this goal in an efficient and inclusive manner. They recognized that countries can rely on a combination of policy instruments to reduce greenhouse gas emissions and can achieve their climate goals with different speeds and trajectories, taking into account national specificities, degrees different technological development, different availability of resources needed to finance transition. At the same time, ministers recognized the importance of enhanced international cooperation to avoid potential fallout from unilateral approaches.

During two sessions, moderated respectively by the Deputy Managing Director of the IMF and the Secretary-General of the OECD, the ministers presented their views, experiences and proposals on how to use budget tools in the service of ambitious climate change mitigation strategies. They also discussed ways to limit the impact of climate policies on vulnerable households and tackle carbon leakage to avoid negative effects on international trade and growth agendas.

The Italian presidency asked the IMF and the OECD to prepare a report on this subject ahead of the meeting of G20 finance ministers and central bank governors in October 2021. Building on the results of the Symposium, the The report will take stock of countries’ mitigation measures and adaptation policy strategies.

Daniele Franco, Italian Minister of Economy and Finance, stressed that a multilateral approach to tax policy and climate change is essential to successfully address this truly global challenge. All participants agreed that this dialogue should be continued and conducted both at the political level – thanks to the constant engagement of G20 finance ministers and central bank governors – and at the technical level, possibly through a G20 study group.

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