世界发展银行-Climate-Change-Budget-Tagging---A-Review-of-International-Experience_50页_1mb

Climate Change Budget Tagging: A Review of International Experience

Core Content

This report provides an overview of international experience with climate change budget tagging, a government-led process for identifying, measuring, and monitoring climate-relevant public expenditures. It explores the evolution, design, and implementation of these methodologies, as well as their links to broader climate finance reporting and sovereign green bond frameworks.

Main Viewpoints

• Climate budget tagging is a tool to integrate climate considerations into national and subnational budget processes.
• It builds on earlier initiatives such as pro-poor budgeting and gender-responsive budgeting, which also aimed to track expenditures related to specific policy objectives.
• The process helps raise awareness, improve transparency, and support accountability in climate policy implementation.
• There are three key design elements: defining climate-relevant expenditures, determining appropriate coverage, and estimating the share of climate-relevant spending.
• Two main approaches to defining climate-relevant activities are used: objective-based and policy-based. Most countries use the Rio markers from the OECD for objective-based definitions, while others rely on national climate policy documents for policy-based definitions.
• Estimation methods vary, including tagging only programs with climate as a primary objective, estimating expenditures associated with climate-relevant components, and applying climate relevance weights.

Key Information

Countries and Initiatives

• 19 countries (including some subnational governments) have developed climate budget tagging methodologies.
• These methodologies are often developed by central finance or planning agencies, in coordination with environment and climate institutions.
• Indonesia was the first country to use a climate budget tagging system for the purpose of issuing sovereign green bonds.

Climate Finance Reporting

• The report reviews methodologies such as the Rio markers, European Union Common Methodology, and the Multilateral Development Banks' Joint Methodology.
• It also highlights the UNFCCC reporting and the Environmental Finance Statistics as related tools.
• Climate expenditure reviews and Climate Public Expenditure and Institutional Reviews (CPEIR) are used to assess the alignment of budgets with climate goals.

Benefits and Challenges

• Benefits include awareness raising, transparency, and accountability.
• Challenges include difficulty in assessing impact, lack of integration with financial systems, and limited data availability.
• Lessons learned suggest the need for national ownership, clear definitions, involvement of line ministries, and quality assurance mechanisms.

Institutional Roles

• Central finance and planning agencies are typically responsible for developing tagging methodologies.
• Line ministries and agencies are responsible for implementing and applying the tagging process.
• Validation mechanisms are used in some countries to reduce greenwashing and ensure climate relevance.

Future Directions

• Countries are expected to align budgets with the Paris Agreement and climate change policy priorities.
• The reporting cycle should be integrated across the entire budget cycle to support resource allocation decisions.
• Capacity building and awareness raising are essential for the successful implementation of climate budget tagging.
• Complementary reporting systems can help extend the scope of climate budgeting beyond central government to include subnational governments (SNGs) and state-owned enterprises (SOEs).

Summary of Lessons Learned

• Define clear objectives and consider alternatives to climate budget tagging, such as mainstreaming climate change through program and project appraisal.
• Align definitions with national climate policies and strategies to ensure policy coherence.
• Engage key stakeholders, including central finance, planning, environment, and climate agencies.
• Ensure active involvement of line agencies in the tagging process to align expenditures with policy goals.
• Embed tagging across the budget cycle for better use in decision-making.
• Use automation and integrate climate tags into financial management systems.
• Design systems that support the mobilization of climate finance, such as aligning with Green Bond Principles.
• Tailor information to different audiences, including government officials, the public, and civil society.
• Conduct periodic reviews to test the alignment of budgets with climate goals and improve policy efficiency.
• Promote transparency and public debate on climate policy and budgeting to enhance public support and policy accountability.

Conclusion

Climate budget tagging is an evolving practice that supports the integration of climate considerations into public spending. While it has shown promise in raising awareness and improving transparency, its effectiveness in influencing budget allocations and decision-making remains to be fully assessed. The report emphasizes the need for national ownership, robust methodologies, and institutional coordination to ensure its success.