This technical assistance conducts a Climate Policy Diagnostic (CPD) for Papua New Guinea, covering climate adaptation and mitigation policy, as well as enabling institutions. Climate-related risks are macro-critical considerations for Papua New Guinea, while the country faces acute policy challenges in addressing climate-development nexus. This CPD identifies policy reforms that are good for climate and economic growth and promote fiscal sustainability. A systematic policy approach is needed to strengthen the climate resilience of water supply sector and disaster risk management. Carbon pricing can play a major role in the fiscal policy package to encourage climate actions in the energy and forestry sectors. Increasing the Treasury’s engagement and strengthening cross-sectoral coordination would also help unlock climate investment.