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Aligning Regional and Local Budgets with Green Objectives

Subnational Green Budgeting Practices and Guidelines

image of Aligning Regional and Local Budgets with Green Objectives

Green budgeting is emerging at subnational levels as an important tool for regions and cities to use to align their expenditure and revenues with their green objectives, and enhance the transparency and accountability of their climate and environmental action. It is also a tool that subnational governments can use to prioritise low-carbon investments and identify funding gaps, as well as to mobilise additional sources of both private and public climate finance. In order for subnational governments to make full use of green budgeting however, more methodological, technical, and financial support is needed. This report presents a first stocktake of subnational green budgeting practices in OECD and EU countries as well as a set of guidelines for subnational governments to use in developing and launching a green budgeting practice. It is accompanied by two green budgeting case studies – one with the Region of Brittany (France) and one with the City of Venice (Italy) – and a self-assessment tool. The self-assessment tool allows regions and cities to measure their capacity to launch a green budgeting practice or strengthen an existing one, and is available on the OECD Subnational Government Climate Finance Hub as a downloadable Excel file.

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Brittany case study

The French region of Brittany began working on developing its own green budgeting practice at the end of 2020. These efforts led to the development of a climate budget tagging methodology that was piloted on the region’s 2020 closed accounts and is now being consolidated in order to be applied to the 2023 draft budget. The exercise has highlighted the operational, methodological, political, and organisational challenges for implementing green budgeting at the regional level as well as key elements necessary to achieve success.

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