Presentation OECD Paris Collaborative on Green Budgeting 3 November 2022, OECD Green Budgeting Survey, 2022 Initial Findings

1. OECD Paris Collaborative on Green Budgeting
3 November 2022
OECD Green Budgeting Survey, 2022
Initial Findings
Margaux Lelong

2. Introduction
2
I. Introduction
II. Overview
• Institutional arrangements
• Methods and tools
• Accountability and transparency
• Enabling environment in budgeting
III Challenges and innovations

3. Introduction
3
Details of the OECD building blocks
OECD Green Budgeting Framework
➢ Green budgeting refers to the integration of climate and environmental considerations into the
government’s budgetary processes and practices.
➢ It uses the tools of budgetary policy-making to help progress climate and environmental objectives.

4. Overview
> 36 respondents
> 24 countries are implementing green budgeting, compared to 14 in 2021 and 2020
> Green budgeting is used mainly to inform political decision-making (17 countries) 4
Green budgeting in OECD countries, 2022
Green budgeting impacts in policy-making and budgetary governance

5. 5
Overview
➢ Countries have
strengthened their
green budgeting
practices relative to
2021.
➢ The variation in
practices reflects
differences from when
countries commenced
green budgeting, the
resources available and
the policy agenda
➢ Areas for further gains
are in the accountability
and transparency
arrangements.

6. Institutional arrangements
6
Legal basis
Objectives
➢More than 50% of OECD
implement a national
environmental strategy and a net-
zero emissions strategy
➢Consistent to an emerging
practice, green budgeting is most
often implemented through
administrative instructions
➢Green budgeting is used mainly to
progress climate mitigation
objectives, but the focus on
climate adaptation is increasing

7. Institutional arrangements
7
Scope of green budgeting
➢Green budgeting is being applied
broadly – capital investment,
discretionary spending and mandatory
spending
➢The majority of OECD countries have
implemented recovery plans in response
to the COVID-19 health crisis – and have
included climate and environmental
considerations in these plans
➢In half of OECD countries (19), finance
ministries are primarily responsible for
the implementation of green budgeting,
13 countries have a shared responsibility
between the ministry of finance and line
ministries
Green budgeting in recovery plans

8. Methods and tools
8
➢There is no single approach on
how best to commence green
budgeting
➢Common tools are carbon
pricing instruments,
environmental impact
assessments, green tagging,
and reviews of harmful tax
expenditure.
➢Emerging tools:
➢ carbon budgets
➢ medium-term tools
➢ green spending reviews

9. Accountability and transparency
9
➢ 10 countries have implemented
oversight mechanisms.
➢ 8 of them to monitor the compliance
with green reporting requirements
➢ 5 to monitor green investment and
spending targets
➢ 4 to estimate the cost impact of green
initiatives on the economy, emissions
and energy markets
➢ 3 to estimate the fiscal cost and impact
of green initiatives by government
➢ 11 OECD countries monitor the
implementation of green budgeting
➢ 15 countries report on the
implementation of green budgeting
➢ Monitoring and reporting are mainly
performed by the ministries of finance
and the ministries of environment
➢ Emerging practice:
➢ Four countries have implemented
a green budget statement
➢ Accounting, financial reporting
disclosures
Monitoring and reporting Oversight

10. Accountability and transparency
10
Civil society involvement in green budgeting Public availability of information
➢ 12 countries reported that they included civil society in the green budgeting process, an
increase from eight countries in 2021
➢ Country practices of involving civil society in green budgeting vary: commissions, public
enquiries, citizens’ groups, etc.
➢ 14 countries made information on green budgeting available to the public

11. Enabling environment in budgeting
> 10 OECD countries use performance budgeting to support the implementation of green budgeting and 7 use performance
budgeting but have yet to link it to green budgeting
> 9 OECD countries use programme budgeting as a link to green budgeting, 7 use programme budgeting but have yet to link it
to green budgeting
11
Programme budgeting and green
Performance budgeting and green

12. Enabling environment in budgeting
> The most common components supporting the implementation of green budgeting were training and skills development
within ministries of finance
> 13 countries had implemented co-ordination mechanisms to improve green budgeting.
> These practices have increased since 2021.
12
Capacity building mechanisms Coordination mechanisms

13. Main challenges and areas or further work
13
➢ In 2022, respondents stated that
the challenges from
implementing green budgeting
were from having sufficient:
• Resources to develop green
budgeting approaches.
• Relevant knowledge or
technical expertise.
• Disaggregated data on
climate change and
environmental sustainability.
• Guidance resources to
support the use and
dissemination of green
budgeting.

14. Thank you
www.oecd.org/environment/green-budgeting/
Margaux Lelong, OECD