Sustainable finance
Public Finance
Definition
Public finance encompasses the revenue, expenditure, borrowing and guarantees of the state: taxation, budget allocations, subsidies, public procurement spending, sovereign debt and the operations of state-owned financial institutions. In sustainability terms it determines the fiscal signals economies run on — whether public money accelerates the transition or subsidises the status quo, notably through fossil fuel subsidies measured in the hundreds of billions annually.
References
Overview
How it is used
The concept structures green budgeting, fossil fuel subsidy reform, sovereign green bond issuance and debates on the role of public development banks.
Why it matters
Governments move roughly a third of GDP through public finance; aligning that flow with sustainability goals is the single largest alignment challenge of all.