Mobilizing Domestic Resources for Climate Change Finance through Tax Policy in Developing Countries: A Literature Review

Mobilizing domestic resources is crucial for developing countries to finance their climate change mitigation and adaptation efforts. This study examines various tax policy measures that developing countries can utilize to mobilize domestic resources for climate change finance. The study draws on the reviewed literature and case studies to suggest that carbon pricing mechanisms, tax incentives for sustainable investments, taxation of environmentally harmful activities, and tax administration and state capacity are all important aspects of tax policy that can contribute to mobilizing domestic resources for climate change finance. Researchers and practitioners will find this study useful in supporting policymakers in developing countries to develop and implement effective domestic resource mobilization strategies that could help address the impact of climate change.