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Green budgeting: what and why? - Ronnie Downes, OECD

OECD Governance
OECD Governance
OECD GovernanceOECD Governance

This presentation was made by Ronnie Downes, Public Governance Directorate, OECD, at the Workshop on Green Budgeting held at the OECD, Paris, on 20 June 2018 green budgeting 20-June-2018

Green budgeting: what and why? - Ronnie Downes, OECD

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INTRODUCTION:
THE PARIS COLLABORATIVE
ON GREEN BUDGETING
Ronnie Downes
Public Governance Directorate,
Budgeting and Public Expenditures Division
Paris Collaborative on Green Budgeting
Expert Workshop on Green Budgeting
20 June 2018, OECD Headquarters, Paris
Domestic and international action on
environment:
– Biodiversity, water, air pollution, and climate
– International agreements
• Paris Agreement
• Aichi Biodiversity Targets
• related Sustainable Development Goals (eg. #6, #7,
#13, #14, #15. #17)
2
“National and international commitments”
But action is needed
….using the tools and processes of
budgetary policy-making
- by evaluating and improving the
environmental impact of
budgetary policies
- assessing their coherence with
national and international
commitments
 help achieve environmental goals
3
What is “Green Budgeting”
The Paris Collaborative on Green Budgeting
• launched at One Planet Summit,
12 Dec 2017 in Paris
• convened by OECD, working in
close partnership with
governments, OECD working
groups and experts
• to develop and refine new
methodological approaches and
pragmatic green budgeting tools
• Budgeting for inclusive and sustainable
growth
• Long-term fiscal sustainability
• Environmental cost-benefit
assessments
• Environmental fiscal reform
• Carbon pricing and reform of
potentially harmful subsidies
5
Building on existing OECD work streams
Office of the
Secretary General
Public Governance
Committee
WP of Senior
Budget Officials
(SBO)
SBO Performance
and Results
SBO Financial
Reporting and
Accounting
Environment
Policy Committee
Joint Meeting, Tax
and Environment
Experts
WP on Climate,
Investment &
Development
WP on
Biodiversity, Water
& Ecosystems
Committee on
Fiscal Affairs
Joint Meeting, Tax
and Environment
Experts
6
Work with broader OECD networks
Ad

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  • 1. INTRODUCTION: THE PARIS COLLABORATIVE ON GREEN BUDGETING Ronnie Downes Public Governance Directorate, Budgeting and Public Expenditures Division Paris Collaborative on Green Budgeting Expert Workshop on Green Budgeting 20 June 2018, OECD Headquarters, Paris
  • 2. Domestic and international action on environment: – Biodiversity, water, air pollution, and climate – International agreements • Paris Agreement • Aichi Biodiversity Targets • related Sustainable Development Goals (eg. #6, #7, #13, #14, #15. #17) 2 “National and international commitments” But action is needed
  • 3. ….using the tools and processes of budgetary policy-making - by evaluating and improving the environmental impact of budgetary policies - assessing their coherence with national and international commitments  help achieve environmental goals 3 What is “Green Budgeting”
  • 4. The Paris Collaborative on Green Budgeting • launched at One Planet Summit, 12 Dec 2017 in Paris • convened by OECD, working in close partnership with governments, OECD working groups and experts • to develop and refine new methodological approaches and pragmatic green budgeting tools
  • 5. • Budgeting for inclusive and sustainable growth • Long-term fiscal sustainability • Environmental cost-benefit assessments • Environmental fiscal reform • Carbon pricing and reform of potentially harmful subsidies 5 Building on existing OECD work streams
  • 6. Office of the Secretary General Public Governance Committee WP of Senior Budget Officials (SBO) SBO Performance and Results SBO Financial Reporting and Accounting Environment Policy Committee Joint Meeting, Tax and Environment Experts WP on Climate, Investment & Development WP on Biodiversity, Water & Ecosystems Committee on Fiscal Affairs Joint Meeting, Tax and Environment Experts 6 Work with broader OECD networks
  • 7. Background note on: • Definition of Green Budgeting • Proposed working method • Initial examples of how countries examine environmental impacts of budget measures • Discussion of draft Green Budget Statement • Progress on deliverables and next steps 7 Draft output : Green Budget Primer
  • 8. 8 4. Greening public finance Greening of public revenue raising Greening of public expenditures  taxing carbon emissions  taxing activities or pollutants with adverse effects on biodiversity  component of environmental fiscal reform  Identify and unintended negative environmental impacts of taxes  Interaction of taxes with other instruments  scale back any existing support measures for fossil fuel generation or use  environmentally motivated tax preferences  assessments of expenditures regarding their environmental impacts  cost-benefit analysis (CBA)
  • 9. • What notable examples of good practice exist in your country? • Are there national initiatives that can be advanced under the PCGB umbrella? • Feedback on activities and topics that you consider most relevant for the future (evaluation sheet). 10 How can you contribute today?

Editor's Notes

  1. Goal 6. : Ensure availability and sustainable management of water and sanitation for all Goal 7: Affordable and clean energy Goal13: Climate Action Goal 14: Life below Water Goal 15. : Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss Goal 17. : Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development
  2. This includes:- assessing the trajectory towards meeting national and international commitments identifying “policy gaps” and areas for particular action assessing the coherence of policies and resources taking stock of environmental relative to other priorities contributing to informed, evidence-based debate and discussion on sustainable and inclusive growth  “Investing in Climate, Investing in Growth”: imperative to align policy and all financial flows
  3. Budgeting for inclusive and sustainable growth: The OECD is already looking at how budget systems can be used to achieve inclusive and sustainable goals. For example, the OECD is currently working with countries such as Austria and Canada to look at how budgeting systems can be better designed to help achieve overarching gender goals. In this work we look at the budget, not as a one day event, but as a year round, even multi-year event with multiple windows to apply a gender lens. For example, in the budget development phase policy proposals can be subject to gender impact assessments. When the draft budget is presented, an accompanying gender budget statement can highlight how the new policies presented will contribute in net towards gender goals, drawing on information from the gender impact assessments. Long-term fiscal sustainability: LTFS analysis is done as a matter of routine, underpinned by economic and demographic projections, often with stark lessons for policy-makers. However, the OECD is looking at how to do a different multi-dimensional LTFS analysis taking into account environmental projections and shining a spotlight on what needs to be done today to achieve national and international commitments. Environmental cost-benefit assessments: The OECD recognises that it is important to consider the full social costs and benefits of all budget measures. As part of this, CBAs should value changes in GHG emissions, but also changes in emissions of local air pollutants. The OECD has a number of activities furthering work in this area, including pioneering work in relation to ex post CBAs of environmentally related taxes and tax provisions being done by the Joint Meetings of Tax and Environment Experts. Environmental fiscal reform: Taxes are one instrument in the environment policy toolbox. For example, we all know taxes can be used to reflect the costs of pollution in prices. This not only reduces pollution, but it also does it in effective and cost-effective ways. At present, environmentally related taxes are of limited coverage, low and there are volatile rates in most sectors except transport. The OECD has been preparing comparative analysis of environmentally related taxes as a primer in environmental fiscal reform. Environmental fiscal reform holds considerable opportunity. This sort of reform could be the cornerstone of cost effective environmental policy, but with few exceptions it does not deliver on that promise yet. Carbon pricing and reform of harmful subsidies: At the COP21 Conference on Climate Change in 2015, 195 countries agreed to decarbonise the global economy by the second half of the century. This requires deep change in the structure of modern economies and environmental fiscal reform. The OECD is undertaken comprehensive analysis in this area to help better understand what needs to be done. For example, OECD analysis of 2012 data showed that 60% of CO2-emissions from all energy use in the 41 countries are not subject to an ECR at all, 30% are subject to a rate between zero and EUR 30 per tonne of CO2, and 10% to a rate above EUR 30 per tonne.
  4. 18 May - Working Lunch of delegates from the Joint Meetings of Tax and Environment Experts. 22 May - Introductory workshop on Green Budgeting tools (organised back-to-back with the Working Party on Biodiversity, Water and Ecosystems, 23-24 May)
  5. Comments on the Green Budget Primer are welcome until 6 July
  6. Future deliverables and activities will be further discussed in the last Session
  7. Evaluation sheets will be collected by the end of the day. A digital version is available in the Drop Box
  8. If you would like further information, please feel free to download the full report or the policy highlights from our website. Thank you.