1. Themes
  2. Domestic Mobilization
  3. Fiscal Reforms and Regulations

Fiscal Reforms and Regulations

Aligning fiscal policy and regulatory frameworks with climate goals can unlock public spending on climate-related projects while creating enabling regulations and incentives for the private sector to adopt sustainable practices.

2030 Goals

01

Align tax structures and subsidies with decarbonization goals and eliminate perverse incentives that promote deforestation or fossil fuel consumption.

02

Expand the use of green fiscal instruments, including: Positive subsidies (e.g., green incentives), Phase-out of environmentally harmful subsidies, Introduction of carbon pricing mechanisms.

03

Create a coherent fiscal framework that supports long-term planning and investment, explicitly aligned with Brazil’s Nationally Determined Contributions (NDCs) and the National Climate Plan (Plano Clima, 2023).

Status

No Progress

Brazil is advancing fiscal reforms to align investment capacity and budget rules with climate goals, aiming to create fiscal space for green spending while safeguarding stability under the New Fiscal Framework and related instruments.

The New Fiscal Framework, approved in 2023, replaced the spending cap and allows greater flexibility for public investment, including potential climate-aligned expenditures.

The Ministry of Finance launched the Green Budget Platform to pilot a tagging methodology for climate-related expenditures and improve fiscal transparency.

The Fiscal Responsibility Law has not yet incorporated climate risk, though debates continue on climate-adjusted debt limits and the possibility of climate-related fiscal exceptions.

Leading Actors

Cooperation is required between these actors and audiences to drive progress foward in Fiscal Reforms and Regulations.

Public Financial Institutions

Central Bank of Brazil (BCB)

Multilateral Development Banks

Inter-American Development Bank (IDB)

Multilateral Development Banks

World Bank

Multilateral Development Banks

International Monetary Fund (IMF)

International Organizations

United Nations Development Programme (UNDP)

International Organizations

Organisation for Economic Co-operation and Development (OECD)

Ministries

Ministry of Finance (MF)

Ministries

Minstry of Planning and Budget (MPO)

Ministries

Ministry of Environment and Climate Change (MMA)

Other Governmental Organizations

National Treasury (STN)

Other Governmental Organizations

Federal Court of Accounts (TCU)

Other Governmental Organizations

Federal Revenue Service

Other Governmental Organizations

Securities and Exchange Commission of Brazil (CVM)

Supportive Stakeholders

Instituto do Clima e Sociedade (iCS)

Supportive Stakeholders

Observatório do Clima

Supportive Stakeholders

Instituto Escolhas

Supportive Stakeholders

Centro Brasil do Clima (CBC)

Supportive Stakeholders

Centro Brasileiro de Relações Internacionais (CEBRI)

Key Milestones

Showcasing the key reform milestones for Fiscal Reforms and Regulations that have been addressed at global events.

View Roadmap

Brazil

National Climate Plan (“Plano Clima”)

View Event
  • Fiscal Reforms and Regulations

    Integrate climate criteria into Brazil’s fiscal rule frameworks and legal interpretations of the Fiscal Responsibility Law (LRF), making climate objectives binding in fiscal planning,

  • Shifting Insurance Models

    Integrate climate insurance into national adaptation policy frameworks to align risk transfer with resilience planning and public financial protection.

Brazil

Plano Safra 2026-2027 announcement

View Event
  • Fiscal Reforms and Regulations

    Discuss integration of climate priorities within ongoing tax and fiscal reform debates.

  • Enhancing Cooperation Across Development Banks

    Integrate subnational PDBs (Amazonian Bank, Brazilian Northeast Bank) more systematically into national climate and development planning processes

Brazil

Brazilian Presidential Elections

View Event
  • Fiscal Reforms and Regulations

    Embed climate priorities into major fiscal reforms (e.g., tax reform) by enacting enabling laws that operationalize green tax instruments and earmark revenues for climate action

  • Levies on High-emitting Activities

    Engage Congress, subnational governments, and sectoral associations in consultations to refine proportional taxation models

Learn More

Publications and educational material to deepen understanding of Fiscal Reforms and Regulations.

Tributação Verde: entenda o que é e como funciona no Brasil

Fiscal Reforms and Regulations

Explainer on “tributação verde” (green taxation), its mechanisms, and application in Brazil’s fiscal system.

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Novo Arcabouço Fiscal

Fiscal Reforms and Regulations

Infographic and explanatory material on the Novo Arcabouço Fiscal, Brazil’s new fiscal framework to ensure fiscal sustainability.

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