Co

alitio

n of Fina

nce

M

inisters fo

r Clim

ate

A

ctio

n

Ministry

of Fina

nce

-C

olo

mb

ia

June2019

NDC

•C

olo

mb

ia a

ckno

wle

dg

es

the im

pa

ct o

f clim

ate

issues

on fisc

al a

nd e

co

nom

ic sta

bility

•U

nde

rstand

ing the

po

tentia

l effe

ctive

ness o

f fisca

l instrum

ents to

ad

dre

ss do

uble

-divid

end

ob

jec

tives

•A

ll enviro

nme

ntal lia

bility w

ill eve

ntually b

ec

om

e a

fisc

al lia

bility

Prem

ises

Clim

ate

cha

nge

sec

toria

l pla

n

•Stra

teg

ic line

s pro

po

sed

by the

Ministry o

f financ

e:

•Ec

ono

mic

instrume

nts•

Ma

nag

em

ent a

nd a

cc

ess to

financ

ing so

urce

s.•

Ma

cro

ec

ono

mic

mo

de

ling•

Estima

tion o

f fisca

l imp

ac

ts asso

cia

ted

with c

lima

te

eve

nts•

Ca

pa

city b

uilding

•Inte

rnal m

ana

ge

me

nt

Taxes:•

Carbon tax

•Plastic bagstax

•Tax benefits for renew

able energy

•Tax benefits for electric

cars

Other instrum

ents•

Disaster Risk M

anagement

•G

reen bonds

•M

acroeconomic m

odels

•Financialinstrum

ents

Economicinstrum

ents

•C

arbontax

since2016

(Law1819).

•To generate signals for greenhouse gas (G

HG) em

ission red

uctions •

Foundations for financing the N

DC

•Support a national prod

uctive transformation low

-carbon strategy.

•O

ffsettingm

echanism-O

TCcarbon

market

•Tariff:5

USDper

tonof

carbond

ioxide.Tariff

depend

son

thetype

offossilfuel

•Fossilfuels:G

asoline,naturalgas,kerosene,liquefied

petroleumgas,

jetfuel,dieselfuel(A

CPM

),andfueloil.

•Taxable event: the sale of any of these fuels w

ithin Colom

bian territory•

Producers and importers are responsible for collecting carbon tax

•The tax is earm

arked, among others, to environm

ental issues.

Carbon

tax–

Key elements

•The

Ministry o

f financ

e is w

orking

on p

rop

osa

ls of e

co

nom

ic instrum

ents

that sup

po

rt gre

en g

row

th

•To

incre

ase

the sc

op

e a

nd re

venue

from

the c

arb

on ta

x (by

includ

ing c

oa

l that is c

urrently e

xem

pt)

•To

cha

nnel the

se re

sourc

es to

a p

rod

uctive

transfo

rma

tion lo

w-

ca

rbo

n strate

gy

•Te

chno

log

ica

l co

nversio

n and

low

-ca

rbo

n tec

hnolo

gie

s a

do

ptio

n•

Ma

king a

n asso

cia

tion b

etw

ee

n the Sta

te a

nd the

priva

te se

cto

r in o

rde

r to g

ene

rate

ec

ono

mic

gro

wth tha

t results in g

rea

ter

taxe

s for the

state

•Inno

vatio

n co

mp

etitive

ness a

nd hig

her p

rod

uctivity w

ith low

er

gre

enho

use g

as e

missio

ns

Ne

xtstep

s

•D

eve

lop

the G

EMM

ES mo

de

lin ord

er to

have

a m

od

elling

too

l to

be

tter q

uantify the

effe

cts o

f clim

ate

cha

nge

in ma

cro

ec

ono

mic

va

riab

les a

nd fisc

al p

olic

y

•To

ca

talyze

natio

nal a

nd sub

-natio

nal e

fforts thro

ugh the

pla

nning o

f a

n innova

tive, c

om

pe

titive a

nd lo

w-c

arb

on e

co

nom

y, whic

h is re

silient a

t the sa

me

time

•G

ree

nb

ond

s

•To

ide

ntify po

licy a

rea

s in ord

er to

incre

ase

the c

ountry’s m

itiga

tion

and

ad

ap

tatio

n effo

rts tow

ard

s clim

ate

cha

nge

•This stra

teg

y is alig

ned

with the

fulfillme

nt of na

tiona

l go

als inc

lude

d

in the N

atio

nal D

eve

lop

me

nt Plan 2018-2022 linke

d to

leg

ality,

entre

pre

neurship

and

eq

uality; a

nd tra

nsversa

lly in sustaina

bility a

nd

mitig

atio

n of c

lima

te c

hang

e

Ne

xtstep

s

Co

alitio

n of Fina

nce

M

inisters fo

r Clim

ate

A

ctio

n

Ministry

of Fina

nce

-C

olo

mb

ia

June2019