10 December 2015: The European Bank for Reconstruction and Development (EBRD) has launched a paper, titled ‘Government assets: risks and opportunities in a changing climate policy landscape.’ The paper was launched at an event held on the sidelines of the Paris Climate Change Conference.

The publication analyzes how climate change policies can affect the national accounts of governments and the impact they have on the value of energy and infrastructure assets as well as the cash flows linked to them. The paper contains a methodology to assess the influence of climate change policies on national budgets, and to show how this impact depends on variables, such as ownership, regulation and contractual arrangements for the extraction and processing of fossil fuel resources, public-private partnerships, usage fees and price regulation for related public infrastructure. It also includes recommendations to optimize the fiscal impact of climate change policies and is accompanied by a short summary of key messages. The EBRD aims to apply this methodology in full to a selected number of countries.

Speaking at the launch, Mattia Romani, EBRD’s Managing Director for Country and Sector Economics, said that besides better carbon pricing and removal of fossil fuel subsidies, governments can benefit from smarter and more transparent revenue sharing contracts on natural resources with the private sector. Nicholas Stern, Chair of the Grantham Research Institute, emphasized the importance of “managing fiscal space prudently” and noted that “laying the foundations for a greener economy now, diversifying energy sources, reducing emissions, and creative adaptation” all contribute to reducing climate change risks. [Publication: Government Assets: Risks and Opportunities in a Changing Climate Policy Landscape] [EBRD Press Release]