Methodologies for Climate Spending in Public Budgets

Why it matters

Provides transparency and accountability regarding government climate commitments, ensuring that public funds support national climate goals (NDCs). It helps identify funding gaps, optimize resource allocation for mitigation and adaptation, and can attract international climate finance by demonstrating concrete actions.

1) Increased adoption of green budgeting: The number of OECD countries implementing green budgeting measures rose from 14 in 2020 to 24 (two-thirds of the 36 countries surveyed) in 2022. This reflects a strong and growing interest among governments in integrating climate and environmental objectives into their budget processes through these methodologies.

2) Direct financial impact and resource allocation: A clear example of the direct impact of these methodologies is New Zealand, where the establishment and first funding round of the Climate Emergency Response Fund in Budget 2022 led to an allocation of NZD 4.5 billion. This resulted in a notable increase in funding directed towards climate objectives compared with previous budgets, demonstrating how integrated green budgeting frameworks can drive significant resource allocations for climate initiatives.

Green Budgeting in OECD Countries (2024). https://www.oecd.org/content/dam/oecd/en/publications/reports/2024/04/green-budgeting-in-oecd-countries-2024_3c771827/9aea61f0-en.pdf