The challenges and costs from climate change are greater and occurring more rapidly than first estimated, according to the Six Assessment Report by the United Nation’s Intergovernmental Panel on Climate Change. Green budgeting is designed to help governments address these challenges and costs by using budget policymaking tools to integrate climate and environmental perspectives into budget frameworks and practices to better inform budget decisions. Green budgeting is relevant to all stages in the budget cycle, specifically budget planning, formulation, approval, implementation and oversight.
In 2018, the OECD established the Paris Collaborative on Green Budgeting to bring together senior officials from OECD countries to share experiences on developments in green budgeting. By 2022, two-thirds of OECD countries had adopted green budgeting practices, as governments use fiscal and budget policy to help pursue climate and environmental objectives.
The majority of the work undertaken by the OECD Paris Collaborative on Green Budgeting focuses on climate change considerations. However, the scope of work is broadening to include biodiversity, nature and other environmental considerations. Similarly, the relevance of green budgeting across the budget cycle is also broadening to consider budget implementation, reporting and oversight.
This report expands the OECD’s resources on green budgeting by providing an overview of green budgeting practices across OECD countries, derived from the 2022 OECD Survey on Green Budgeting, as well as drawing on information from a survey conducted in 2020 in collaboration with the European Commission.
This report was prepared by Anne Keller, Margaux Lelong and Andrew Blazey of the Public Management and Budgeting Division in the Directorate for Public Governance under the oversight of Elsa Pilichowski, Director for Public Governance, and Jón Blöndal, Head of the Public Management and Budgeting Division, Public Governance Directorate. The report was prepared for publication by Meral Gedik.
This report was reviewed by the OECD Paris Collaborative on Green Budgeting on 17 April 2023. It was approved by the Committee of Senior Budget Officials and prepared for publication by the Secretariat. The Secretariat is grateful to all of the parties who provided feedback on the report.