The Paris Collaborative on Green Budgeting was launched by the OECD Secretary-General Angel Gurría at the One Planet Summit in Paris on 12 December 2017. It aims to design new, innovative tools to assess and drive improvements in the alignment of national expenditure and revenue processes with climate and other environmental goals. This is a crucial step in achieving a central objective of the Paris Agreement on climate change as well as of the Aichi Biodiversity Targets and the United Nations’ Sustainable Development Goals – aligning national policy frameworks and financial flows on a pathway towards low greenhouse gas emissions and environmentally sustainable development.
(speech by Angel Gurria, OPS, 2018/09)
Green budgeting is an approach that aims to fully incorporate environmental and not just climate dimensions into fiscal and tax policy, which are key catalysts to spur on the ecological transition.
It should be a tool for governments to implement this goal, while also meeting the need for transparency and steering of government spending.
The work hinges on two key focal points:
- Evaluating environmental impacts of budgetary and fiscal policies
- Assessing their coherence with the needs identified to achieve environmental goals
This approach mainly relies on sharing best practices and making recommendations based on solid and recognized scientific evidence.
This will lead to regular workshops (around twice a year) and OECD publications (methodology handbook, overview of practices, use in recovery plans, etc.). At national level, several countries are also supplementing their annual budget documents to take account of the environmental impact of fiscal policy and the challenges that are still to be met.
France was the very first country to analyse the environmental impact of its entire budget (Green Budget report for the 2021 Finance Bill).
As part of its European Green Deal, the European Commission plans to adopt a green budgeting approach for the European budget.
For further information
This initiative is coordinated and steered by the OECD. It regularly brings together experts from finance and environment ministries as well as government representatives.
Scherie Nicol, OECD Directorate for Public Governance, Scherie.NICOL@oecd.org
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