This session will discuss the disruptive economic cost that climate change is causing to the region, the range of policy actions to boost climate resilience, and the associated fiscal risks and pressures. Notably, the significant fiscal costs associated with adaptation and mitigation efforts will pose significant risks to debt sustainability, particularly for many highly indebted countries. For other countries, the green transition will require significant investment for economic restructuring and diversification. Given the pressing financing requirements for both adaptation and mitigation, the session will also investigate the potential for sustainable financial instruments to support the green transition. Additionally, uncertainties surrounding global climate policies and regulations may introduce further challenges. Discussions will cover the scope of policy instruments needed to deliver optimal climate policies that balance various economic and social trade-offs.