158. Other innovative sources of financing can be used at the global, regional or national level as a way of pricing externalities, as well as of generating revenue that can be used to finance other aspects of sustainability. The reform of tax systems to shift taxation away from employment and towards consumption and resource use can help incentivize greener, more resource-efficient growth. Tax deductions to incentivize sustainable behaviour can also be highly effective.

159. While the political acceptability of innovative sources of finance and new fiscal measures will vary by country, as past efforts have shown, recent years have seen particular attention paid to the potential for this kind of approach to be used at the global level. The Panel discussed and agreed on the need to further explore new areas of innovative sources of finance. This could build on, for instance, the work of the High-level Advisory Group of the Secretary-General on Climate Change Financing. In terms of sources, a number of categories were identified by the Advisory Group (see box 16).

160. A number of important sectors of the global economy are currently untaxed, despite the externalities they generate; these include emissions from fossil fuel combustion in the international maritime and aviation sectors. A tax on the most important energy-related greenhouse gas, carbon dioxide, would be another economically efficient means of addressing externalities.