There is growing global recognition that the current model of economic growth is socially, environmentally and economically unsustainable. This has sparked a focus on the green economy, which can be shaped into a critical tool for achieving sustainable development and eradicating poverty at the global level. While the transition to a green economy will take different paths, depending on national circumstances, objectives and policy priorities, there are some general principles and building blocks that are common across countries. In particular the question of finance is a critical element in nearly every case.

Green fiscal reforms (GFRs)  - GFRs include a number of tax and pricing instruments as well as subsidy reforms that can raise revenues while furthering environmental and other goals. Discussions and experience with GFR have grown over the past 25 years and are attracting increasing attention, leading to the adoption of new commitments at different levels from the local to the international.

IEEP has a long track record of research and expertise in GFR. We have examined practical experiences with environmental tax and subsidy reform in a number of countries in Europe and internationally, analysed lessons learnt for other countries considering reform, as well as offered insights on the effective design and implementation of such instruments. We have formulated roadmaps for action at different levels of governance and developed guidance and practical tools such as a subsidy reform flowchart to help implement international commitments.

International climate and biodiversity financing - A major and sustained increase in investment from both public and private sources is needed to meet global biodiversity, climate and other environmental objectives. Despite international commitments to secure adequate funding, the financing gap remains substantial; the resources currently mobilised amount to only a fraction of the sums required to address global biodiversity and climate challenges.

IEEP has been active in supporting the mobilisation of financial resources for biodiversity and climate, both in relation to conventional funding sources such as grants and in exploring opportunities for the take-up of novel financing instruments, such as payments for ecosystem services. For example, we have concluded that mobilising resources for biodiversity under different economic sectors provides a viable approach for complementing the financing of global 2020 biodiversity targets. We have examined national contributions to international goals, for example assessing national contributions to international climate finance and potential sources to meet this commitment including taxes, removal of fossil fuel subsidies and auctioning emissions trading system (ETS) allowances. We have also carried out studies on climate mainstreaming in the European Union's budget taking account of opportunities for financing global climate action from the EU budget.