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Applying a green lens -- Laura KEVANY, Ireland

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This presentation was made by Laura KEVANY, Ireland, at the Introductory Workshop on Green Budgeting Tools held at the OECD, Paris, on 29 April 20

  • Good to see this is taking place. David Pearce wrote Blueprint for a Green Economy in 1989. There is plenty of work done in this pace since then to ensure that Ireland can set up appropriate budgetary models
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Applying a green lens -- Laura KEVANY, Ireland

  1. 1. The Implementation of Green Budgeting in Ireland Laura Kevany OECD Paris Collaborative on Green Budgeting 29th April 2019
  2. 2. The role of the Department of Public Expenditure and Reform To serve the public interest by supporting the delivery of well-managed, well-targeted and sustainable public spending through modernised, effective and accountable public services.
  3. 3. The Introduction of Green Budgeting in Ireland Why green budgeting? • Budgetary process is not a neutral administrative process but reflects long standing societal choices • Need to ensure budgetary processes are conducive to effective decision making • Builds on work on gender/diversity/equality budgeting
  4. 4. Meeting Ireland’s EU 2020/2030 targets Ireland has been exceeding our annual greenhouse gas emissions limits since 2016.
  5. 5. Ireland’s 2050 National Policy Position Climate Change Advisory Council’s illustrative linear trajectory towards 2050 National Policy Position (CCAC First Annual Review of Climate Policy)
  6. 6. Why introduce Green Budgeting practices? Principal Objectives • Transparency  To give policy makers and the public insight into Government action on climate change • Effectiveness  Provide better information for policy makers on the specific effects of individual climate measures (and ultimately on the climate impact of other measures) Facilitates reporting for investors in our Sovereign Green Bond
  7. 7. Ireland’s Budgetary cycle We made the decision that green budgeting should be integrated into existing budgetary procedures and documents rather than stand alone “green budget statements” Key Dates: • October: Draft budget is published for the following year and presented to the Dáil. • December: The Revised Estimates Volume for the Public Service (also called ‘the REV’) is published. It provides more detail on the allocations that were announced in the Budget.
  8. 8. The First Step in the Process • 2018: Identifying and “tagging” all Exchequer climate-related expenditure • This does not determine whether Govt spending on climate is sufficient or indeed effective but is a necessary first step to answer these questions • Vehicle chosen - Revised Estimates Volume for the Public Service • Key challenge – determining what constitutes “climate-related” expenditure and agreeing this across Government
  9. 9. Methodological issues • No clear internationally accepted definitions • For climate finance and EU structural funds – Climate “Rio” Markers used • These consider a proportion of expenditure to be climate-related, depending on the degree to which climate concerns are reflected in programme objectives • We rejected this approach as too imprecise e.g. research budgets, water investment
  10. 10. Final Approach • Definition: “Any expenditure which promotes, in whole or in part and whether directly or indirectly, Ireland’s transition to a low carbon, climate- resilient and environmentally sustainable economy.” • A derivation of International Capital Markets Association definition used for green bonds However, in practice we applied a conservative approach to classification
  11. 11. Body Level One Body Level Two Body Level Three Body Level Four Body Level Five 11 Rialtas na hÉireann | Government of Ireland
  12. 12. Direct Exchequer Climate- related Expenditure • €1.61bn in direct Exchequer climate-related expenditure • Includes only those expenditure items which we believe directly contribute to emissions reductions • In reality, there is significant other Govt expenditure on climate matters: • Support for innovation, upgrades to schools, school transport, water investment • These were reflected as narrative in the report
  13. 13. Lessons learnt • Given the inevitable challenges of introducing green budgeting practices, it will be an iterative process • Start with a simple process that is scalable • May not be tangible benefits initially, but each step will feed into more impactful reporting in the long run & help to socialise climate related reporting
  14. 14. Next steps for Green Budgeting in Ireland 2019 measures likely to include: • Further refining programme selection, trying to disaggregate expenditure in areas where this wasn’t possible in 2018 • High level impact analysis of climate expenditure (how effective are the identified measures at delivering emissions savings) • Potential direct negative climate/environmental impacts of existing Government spending
  15. 15. Contact us: Laura.kevany@per.gov.ie Ken.cleary@per.gov.ie