The Patchwork Green Economy in Palestine: Palestine’s Sectoral Laws, Policies, and Green Finance Frameworks
There is no single “green law” in Palestine. Yet regulation of green growth is already happening.
Across energy, finance, environmental governance, and international commitments, a patchwork of sectoral laws, policy instruments, and institutional mandates is shaping how sustainability is financed, regulated, and operationalized. While fragmented, this framework increasingly influences investment decisions, access to capital, and compliance expectations for businesses.
The question, then, isn’t whether green economy in Palestine is regulated, but how, and whether the current approach is sufficient to support scale, certainty, and long-term impact.
Legal and Institutional Foundations in Palestine
The most concrete legal foundation for green growth in Palestine lies in the energy sector. Legislative Decree No. 14 of 2015 on Renewable Energy and Energy Efficiency remains the core instrument enabling renewable energy generation and efficiency measures. The decree establishes incentives for clean energy investment, exempts renewable energy equipment from certain customs duties, and extends investment-law privileges to renewable power producers. While quite narrow in scope, it has played an outsized role in catalyzing solar and efficiency projects across the market.
Beyond energy, environmental regulation is grounded in the mandate of the Environment Quality Authority (EQA). EQA functions as the central environmental regulator, and oversees environmental impact assessments, licensing conditions, and sectoral environmental compliance. In addition, EQA has been working toward modernizing the environmental legal framework, including the development of Draft Decree-Law on Environment within the Framework of Sustainable Development No. (00) of 2025, which has undergone its first public consultation on the 21st of October, 2025. The draft environmental law is framed explicitly around sustainable development, climate integration, resource management, and environmental governance under a more contemporary legal structure. This direction is reinforced by EQA’s strategic planning, including its multi-sector environmental strategy for 2025-2027 explicitly references legal modernization, climate responsiveness, and cross-sector coordination.This signals an institutional recognition that environmental governance can no longer operate in silos.
Environmental governance in Palestine remains formally anchored in Law No. 7 of 1999 on the Environment, which continues to serve as the primary legislative framework. However, and as acknowledged by the Environment Quality Authority itself, the law has not undergone substantial modernization since its enactment and does not fully reflect developments in international environmental law, climate governance, or contemporary regulatory tools.
The abovementioned instruments don’t necessarily amount to a unified framework for green economy in Palestine. However, they do establish regulatory touchpoints that influence how resources are used, how projects are licensed, and how environmental considerations enter economic decision-making.
Policy Drivers for Green Economy in Palestine: PMA, Finance, and Green Banking
The Palestinian Monetary Authority’s Sustainable Finance Roadmap and Action Plan (2024) represents one of the most structured and forward-looking interventions in Palestine’s sustainability landscape. The roadmap sets out concrete pillars for integrating environmental, social, and governance (ESG) considerations into financial supervision, risk management, and lending practices. It also anticipates the development of green financial instruments, improved disclosure, and a future national taxonomy for sustainable finance.
Interestingly, Palestinian banks have already begun operationalizing green finance. Bank of Palestine’s Sustainability Plus program, for example, provides green loans targeting renewable energy, environmental conservation, sustainable agriculture, and related sectors. Similarly, EBRD-supported green finance facilities, implemented through local banks such as Quds Bank, have introduced dedicated credit lines for energy efficiency and climate-aligned projects.
In practice, these financial policies function as a form of de facto regulation for green economy in Palestine. Even in the absence of a dedicated or consolidated green economy law, access to capital increasingly depends on sustainability criteria, ESG alignment, and climate-related risk assessments. For businesses, this shifts green compliance from a voluntary exercise to a commercial consideration.
Donor and Private Sector Programs as Governance Mechanisms
Donor-backed programs have also played a quiet but influential regulatory role for green economy in Palestine. Initiatives such as GIZ’s Private Sector Development Programme (PSDP) and the Green Growth Palestine program have worked directly with micro, small, and medium-sized enterprises to improve resource efficiency, environmental performance, and access to green finance.
While these programs are not laws, they shape market behavior by setting standards, defining “bankable” green projects, and aligning businesses with financing and regulatory expectations. Similar dynamics are expected to continue under current and upcoming programs, including longer-term private sector programs such as PROSPER project (2025-2030) and the EU-funded Green Forward programme.
In effect, these initiatives can translate policy goals into operational norms, often faster than formal legislation can.
International Frameworks and Strategic Commitments
Palestine’s international climate commitments further reinforce the evolving framework for green economy in Palestine. Through its Nationally Determined Contributions (NDCs) and climate adaptation plans, Palestine has articulated clear priorities around renewable energy expansion, energy efficiency, and climate resilience.
These commitments both on the diplomatic end, as well as legally and economically. They shape donor programming, influence access to climate finance, and increasingly inform domestic planning and regulatory expectations. International projects operating in Palestine, whether through climate funds, development banks, or bilateral cooperation, often carry their own environmental and social safeguards, thereby importing regulatory standards into the local market.
Where Green Economy in Palestine Stands Today
The absence of a single green economy law in Palestine does not amount to a legal vacuum. On the contrary, existing laws, policies, financial frameworks, and international commitments already provide structure and direction. They have enabled meaningful progress and laid important foundations.
At the same time, clear gaps remain. These include the absence of modern environmental law principles such as extended producer responsibility and precautionary regulation; limited integration of climate governance tools such as carbon market frameworks; fragmented institutional competencies; and weak deterrence mechanisms in environmental enforcement. The current framework also lacks a unified taxonomy defining what constitutes “green” or “sustainable” economic activity.
The Case for Legal Coherence
A future green economy in Palestine or sustainability framework law need not reinvent existing instruments. It could consolidate and harmonize them by clearly defining green activities, formalizing incentives and penalties, establishing disclosure and reporting standards, and setting out compliance and enforcement mechanisms.
The draft Decree-Law on Environment in the Framework of Sustainable Development signals movement in this direction by proposing comprehensive restructuring that integrates climate governance, environmental information rights, carbon market mechanisms, environmental funds, civil and criminal liability, and institutional coordination under a unified framework
As demand for sustainable investment grows and climate considerations become central to economic planning, greater legal clarity will be essential. For investors, legal coherence provides certainty. For financial institutions, it clarifies risk. For policymakers, it aligns incentives with national priorities. At Kurdi & Co., we advise businesses, financial institutions, and policymakers on regulatory compliance, ESG integration, public-private incentive structures, and green finance frameworks. As sustainability requirements increasingly shape access to capital and market entry, we support clients in aligning legal strategy with emerging green economy standards in Palestine and the region. For more information from our legal team, get in touch here.
This Article was researched and written on February 7th, 2026 by Kurdi Law.
