20211017-UNDP-Budgeting_for_Climate_Change_A_Guidance_Note_for_Governments_to_Integrate_Climate_Change_into_Budgeting_58页_5mb

BUDGETING FOR CLIMATE CHANGE: GUIDANCE FOR INTEGRATING CLIMATE CHANGE INTO BUDGETING

Introduction

This document provides a technical guide for governments to integrate climate change into budget planning, focusing on medium-term budgeting. It emphasizes linking climate actions with Sustainable Development Goals (SDGs), gender equality, and fiscal sustainability.

Key Principles

1. Build on Existing Systems: Use country-specific PFM (Public Financial Management) frameworks to integrate climate policies.
2. Ensure Flexibility: Align integration steps with the budget cycle, adapting to national priorities and capabilities.
3. Define Roles and Responsibilities: Establish coordination mechanisms involving Ministries of Finance (MoF), Climate Change Policy Bodies (CCPBs), and spending agencies (MDAs).

Methodology

The integration process is structured across three stages of the PFM cycle:

1. Stage 1: Macro-Fiscal Framework and Pre-Budget Documents

   • Incorporate climate change scenarios into fiscal forecasts, revenue projections, and debt sustainability analysis.
   • Include climate policy targets in budget strategy papers and sectoral strategic plans.

2. Stage 2: Medium-Term and Annual Budget Preparation

   • Use tools like climate budget tagging and public investment appraisal to categorize climate-relevant expenditures.
   • Revise budget guidelines to include performance metrics and gender-responsive planning.

3. Stage 3: Budget Approval and Accountability

   • Ensure legislative scrutiny of climate expenditures and transparency through citizen-friendly reports.
   • Integrate climate policies into legislative debates and budget hearings.

Strategic Integration

• Prioritization: Start with foundational PFM reforms ("basics-first") before advancing to detailed climate integration.
• Tools and Frameworks: Utilize diagnostic tools like CCPI (Climate Change Performance Index) and CCBII (Climate Budget Integration Index).
• Coordination: Engage stakeholders, including CSOs and donors, to build accountability and leverage resources.

Outputs and Recommendations

• Budget Documentation: Reflect climate policies in budgets, performance reports, and legislative hearings.
• Capacity Building: Train staff on climate finance tracking and vulnerability assessments.
• Legal and Institutional Support: Develop laws and frameworks to institutionalize climate budgeting.

Examples and Best Practices

• Bangladesh/Nepal: Climate inclusion in budget circulars and sectoral strategic plans.
• France: Comprehensive Green Budgets assessing environmental impact.
• Indonesia: Integration of gender-responsive climate financing.

Conclusion

This Guidance Note supports governments in leveraging budgeting for climate action, emphasizing phased integration and alignment with SDGs.