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Session 1 - Scherie Nicol and Juliane Jansen - OECD

The Green Budgeting Framework Green Budgeting Virtual Meeting - 17 March 2020,

1 of 9
THE GREEN BUDGETING
FRAMEWORK
Scherie Nicol and Juliane Jansen
Public Management and Budgeting Division
OECD, Paris
GREEN BUDGETING -
A COMPASS FOR ACHIEVING OUR ENVIRONMENTAL GOALS
Paris Collaborative on Green Budgeting &
Coalition of Finance Minsters for Climate Action
Tuesday, 17 March 2020
The OECD Paris Collaborative on Green Budgeting
The Paris Collaborative on Green Budgeting
 Launched at One Planet Summit
12 Dec 2017 in Paris
 An open research platform to:
- partnership with governments, OECD working groups and experts
- analytical and methodological groundwork
- propose, develop and test potential tools
- support peer learning and exchange good practices
- country reviews and targeted assistance
 One of the implementation platforms for CFCA Principle 4
What is Green Budgeting?
….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
- contributing to informed, evidence-based debate
 help achieve environmental goals
4
OECD Green Budgeting Framework: Building Blocks for
Environmentally Responsive Decision Making
Building
Block 1
Strategic
planning
Building
Block 3
Accountability
and
transparency
Building Block 4
An enabling budgetary governance framework
The OECD
Green
Budgeting
Framework
Building
Block 2
Evidence
generation
and policy
coherence
5
Building Block 1 - Strategic planning
Defining
environmental
priorities, targets
and benchmarks
Linking
environmental
objectives to an
indicators
framework
Considering long-
term fiscal
sustainability
Netherlands:
• Climate agreement (Klimaatakkord)
• introduce a comprehensive approach to
climate policy across Government.
United Kingdom:
• discussion of climate-related risks in the
OBR’s fiscal risk report.
Building Block 1
 International agreements require
signatories to commitment to objectives
and indicators but these must be
adopted to the level national.
 The financial dimension must be
integrated in formulating the strategy.
6
Building Block 2 - Evidence generation and policy coherence
tools I
Impact
Assessments
Environmental
Cost Benefit
Analysis
Classifying and
tagging green
activities
Environmental tax
reform
Identifying
harmful spending
and tax
expenditure
Scotland:
• Legal requirement to publish GHG estimates
• report upon the emissions impact of expenditure proposals.
• published together with draft budget
France:
• comprehensive classification system for expenditure
• environmental friendly, neutral, and harmful
• across six different environmental aspects
• expected to be applied for the budget law 2021
Building Block 2
 requires developing methodologies, classifying and
assessing the individual and consolidated, positive
impacts and negative of the budget
Green Budget
Statement (GBS)
Sustainability
reporting
Green dimension
in spending
review
Scrutiny by
Independent
Fiscal Institutions
(IFIs)
Environmental
audits
7
Building Block 3 - Accountability and Transparency
Finland
• Sustainable Development Chapter in Draft Budge
UK:
• UK NAO review of the sustainability in the
Spending Review
Netherlands:
• PBL independent think tank on environmental
issues
• assessments of environmental effects of policy
proposals
Building Block 3
 The governance framework must ensure clarity on
the impacts of decisions ex-ante and ex-post and
enable external control
8
Building Block 4 - An enabling budgetary governance framework
8
Building Block 4
An enabling budgetary governance framework
Fiscal rules
and
objectives
guide budget
decisions
Budget
formulation
is outcome
and
evidence-
based
Budget
envelops are
decided on a
multi-annual
basis
Participatory
budget
process
Information: http://www.oecd.org/environment/green-budgeting/
Contact: Scherie.Nicol@oecd.org
9
Thank you

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Session 1 - Scherie Nicol and Juliane Jansen - OECD

  • 1. THE GREEN BUDGETING FRAMEWORK Scherie Nicol and Juliane Jansen Public Management and Budgeting Division OECD, Paris GREEN BUDGETING - A COMPASS FOR ACHIEVING OUR ENVIRONMENTAL GOALS Paris Collaborative on Green Budgeting & Coalition of Finance Minsters for Climate Action Tuesday, 17 March 2020 The OECD Paris Collaborative on Green Budgeting
  • 2. The Paris Collaborative on Green Budgeting  Launched at One Planet Summit 12 Dec 2017 in Paris  An open research platform to: - partnership with governments, OECD working groups and experts - analytical and methodological groundwork - propose, develop and test potential tools - support peer learning and exchange good practices - country reviews and targeted assistance  One of the implementation platforms for CFCA Principle 4
  • 3. What is Green Budgeting? ….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 - contributing to informed, evidence-based debate  help achieve environmental goals
  • 4. 4 OECD Green Budgeting Framework: Building Blocks for Environmentally Responsive Decision Making Building Block 1 Strategic planning Building Block 3 Accountability and transparency Building Block 4 An enabling budgetary governance framework The OECD Green Budgeting Framework Building Block 2 Evidence generation and policy coherence
  • 5. 5 Building Block 1 - Strategic planning Defining environmental priorities, targets and benchmarks Linking environmental objectives to an indicators framework Considering long- term fiscal sustainability Netherlands: • Climate agreement (Klimaatakkord) • introduce a comprehensive approach to climate policy across Government. United Kingdom: • discussion of climate-related risks in the OBR’s fiscal risk report. Building Block 1  International agreements require signatories to commitment to objectives and indicators but these must be adopted to the level national.  The financial dimension must be integrated in formulating the strategy.
  • 6. 6 Building Block 2 - Evidence generation and policy coherence tools I Impact Assessments Environmental Cost Benefit Analysis Classifying and tagging green activities Environmental tax reform Identifying harmful spending and tax expenditure Scotland: • Legal requirement to publish GHG estimates • report upon the emissions impact of expenditure proposals. • published together with draft budget France: • comprehensive classification system for expenditure • environmental friendly, neutral, and harmful • across six different environmental aspects • expected to be applied for the budget law 2021 Building Block 2  requires developing methodologies, classifying and assessing the individual and consolidated, positive impacts and negative of the budget
  • 7. Green Budget Statement (GBS) Sustainability reporting Green dimension in spending review Scrutiny by Independent Fiscal Institutions (IFIs) Environmental audits 7 Building Block 3 - Accountability and Transparency Finland • Sustainable Development Chapter in Draft Budge UK: • UK NAO review of the sustainability in the Spending Review Netherlands: • PBL independent think tank on environmental issues • assessments of environmental effects of policy proposals Building Block 3  The governance framework must ensure clarity on the impacts of decisions ex-ante and ex-post and enable external control
  • 8. 8 Building Block 4 - An enabling budgetary governance framework 8 Building Block 4 An enabling budgetary governance framework Fiscal rules and objectives guide budget decisions Budget formulation is outcome and evidence- based Budget envelops are decided on a multi-annual basis Participatory budget process