Climate change risk may differ from other economic and financial risks in a number of ways: climate change is global; it involves long- term impacts and a great deal of uncertainty; and it has the possibility of irreversible change . The macroeconomic implications will differ across countries, with less developed countries likely to suffer more relative to more advanced ones . Hence, policymakers need to understand the impact of climate change on macroeconomic issues such as potential output growth, capital formation, productivity and long-run levels of interest rates, in order to better design policy interventions, be it monetary or fiscal . As discussed, below are a range of fiscal tools that can be leveraged to mitigate the effects of climate change .
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report