Presentation "Green Budgeting in OECD Countries" by Andrew Blazey during 9th Meeting of the OECD Paris Collaborative on Green Budgeting held in Paris on 17 and 18 of April 2023

1. OECD Paris Collaborative on Green Budgeting
17-18 April 2023
Andrew Blazey and Margaux Lelong
OECD Public Management and Budgeting
Green Budgeting in OECD Countries

2. Green Budgeting in OECD Countries in 2022
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Green Budgeting in OECD Countries in 2022

4. Institutional arrangements
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Legal basis
Objectives
 More than 50% of OECD countries implement a
national environmental strategy and a net-zero
emissions strategy
 Green budgeting is most often implemented
through administrative guidance e.g., a budget or
cabinet circular
 Green budgeting is used mainly to progress
climate mitigation objectives, but the focus on
climate adaptation is increasing

5. Institutional arrangements
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Scope of green budgeting
 Green budgeting is being applied broadly:
• capital/operating
• discretionary/mandatory
• tax expenditure
 Most OECD countries have implemented recovery plans in
response to COVID-19 that include climate and
environmental considerations
 In half of OECD countries (19), finance ministries are
primarily responsible for the implementation of green
budgeting; and 13 countries have shared responsibilities
with ministries of environment and line ministries
Green budgeting in recovery plans
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Discretionary
spending
Mandatory
spending
Capital spending Operating
spending
Tax expenditure

6. Methods and tools
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 Country-specific circumstances influence the
starting point on green budgeting
 Learning effects can result in differences
between the starting point and subsequent
points.
 Influential tools include
 Environmental impact assessment
 Reviewing tax expenditure
 Assessing baseline expenditure Metrics
across departments
 Emerging tools:
 carbon budgets
 macro-fiscal projections
 fiscal risk analysis
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Fiscal risk analysis
Macro fiscal projections
Carbon budget
Green perspective in spending review
Metrics across departments
Review of harmful subsidies
Carbon assessment of budget measures
Environmental cost benefit analysis
Green budget tagging

7. Accountability and transparency
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 Monitoring and reporting functions are performed
mainly by the ministries of finance and environment
 Challenges include:
 Establishing accountabilities across
government
 Monitoring the impact of sovereign green
bonds
 Emerging practices:
 Six countries have green budget statements
 Public sector accounting standards and
financial reporting disclosures are developing
Transparency
Monitoring and reporting

8. Enabling environment for green budgeting
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Performance budgeting and green
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Inter-ministerial co-ordination Inter-ministry co-ordination Co-ordination across levels of government
Budget co-ordination

9. Main challenges and areas for further work
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Lack of resources Lack of knowledge or expertise Lack of disaggregated data Lack of indicators to measure
progress
Lack of guidance resources Unsuitable IT systems

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Key messages
 OECD countries are mainstreaming climate and environmental considerations into budget frameworks
and policies. The implementation is broad-based and occurring at a rapid pace.
 Institutional arrangements for budget frameworks require flexibility as the path to climate and
environmental policy objectives is still evolving, and it can be challenging to pursue multiple objectives
on climate change at a given time.
 The first tool is not always the best tool. Learning effects are influencing the development of methods
and tools on green budgeting in ministries of finance.
 Accountability and transparency arrangements are evolving rapidly through budgetary co-ordination
and financial disclosure expectations.
 The existing arrangements for budgeting are crucial to the implementation of green budgeting as
‘green’ is a policy objective, not a separate budget.
 Ministries of finance are increasing clear on the ways to have impact in green budgeting:
 Subject-matter expertise and guidance resources
 IT systems and data
 Progress and impact reporting.

11. www.oecd.org/environment/green-budgeting/
Thank you