Jakarta—The Coalition of Finance Ministers for Climate Action (the Coalition) has unveiled a new tool to enhance the role of Ministries of Finance (MoFs) in addressing climate change, according to a statement released on Monday, December 9.
The tool, known as the Capability Assessment Framework (CAF) for Mainstreaming Climate Action in Ministries of Finance, is designed to initiate discussions on integrating climate action into MoFs’ core responsibilities.
Specifically, the CAF enables Ministries of Finance to evaluate the extent to which climate action is embedded within their core functions and capabilities, take stock of existing climate-related activities, policies, and initiatives within the ministry while identifying gaps and barriers to further progress, and set priorities for action and assess the need for follow-up measures, including capacity building or technical assistance tailored to the ministry’s specific needs.
The Coalition highlighted that the CAF is a high-level assessment tool that can be completed quickly by an individual or a small team (such as a climate unit), independently or with external technical assistance. It also aligns with the Coalition’s flagship Guide to Climate Action, published in 2023, which outlines wide-ranging opportunities for climate action.
The Coalition of Finance Ministers for Climate Action comprises finance and economy ministers from 95 countries who recognise the economic dimensions of climate change and their critical role in the global response. In the Coalition’s second Climate Action Statement, released earlier this month, member ministries shared nearly 500 climate actions currently underway—more than double the number reported in the inaugural statement in 2023.
These actions span diverse areas, including coordinating climate policy across sectors;
enhancing strategic economic planning; increasing engagement in updating Nationally Determined Contributions (NDCs); scaling up green finance by mobilising public and private resources; implementing carbon pricing and phasing out inefficient fossil fuel subsidies; and
addressing macroeconomic risks of climate change and nature loss, alongside financing gaps for adaptation and nature-based solutions.
The Coalition emphasised that transitioning to a zero-carbon, climate-resilient economy represents a profound structural shift with global implications. Advanced economies must invest at least 2% of GDP annually, while emerging markets and developing countries may require investments closer to 4–5% of GDP. This transition will also demand robust management of macroeconomic and financial stability risks, equitable policies to balance societal costs and benefits, and coordinated long-term planning across borders, sectors, and stakeholders.
Ministries of Finance, overseeing over $30 trillion in public spending annually, hold critical levers for driving this change. By coordinating economic, fiscal, and financial policies, MoFs are pivotal in steering climate action. Moreover, ambitious climate policies align with MoFs’ core mandates of fostering growth, ensuring fiscal responsibility, and maintaining macroeconomic stability. (nsh)
