Equitable Framework and Finance for Extractive-based Countries in Transition (EFFECT):Systemic change and economy-wide decarbonisation

This Pillar articulates a vision for long-term systemic change and economy-wide decarbonisation, shaping a least cost pathway to net-zero to enable the achievement of sustainable development outcomes, whilst also addressing biodiversity loss and environmental degradation. Pillar 3 provides guidance on “how” fossil fuel developing economies can seize the transformational opportunities associated with the low-carbon transition, by pursuing green industrialisation, valuing natural capital and building low-carbon value chains with more value-added produced locally. Pillar 3 outlines strategies to accelerate decarbonisation of the power, transport, building sectors, leading to no-regrets and delivering benefits for citizens’ well-being. The Pillar also offers guidance on pricing negative externalities of carbon intensive technologies and modes of production through carbon pricing and inefficient fossil fuel subsidy reform as key steps to deliver least cost decarbonisation plans, as well as reforming fiscal systems to maximise revenue generation, while ensuring equitable distributive outcomes.