How to Make the Management of Public Finances Climate-Sensitive–“Green PFM”

IMF How To Notes, December 8, 2022

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How to Make the Management of Public Finances Climate-Sensitive–“Green PFM”

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Bibliographic details

• Authors: Bryn Battersby, Fabien Gonguet, Claude P Wendling, Jacques Charaoui, Murray Petrie
• Published: December 8, 2022
• Series: IMF How To Notes
• DOI: https://doi.org/10.5089/9798400221682.061

Overview and purpose

• Develops the “green public financial management (PFM)” framework briefly outlined in an earlier Staff Climate Note (2021/002, published in August 2021).
• Illustrates how climate change and environmental concerns can be mainstreamed into governments’ institutional arrangements to facilitate implementation of fiscal policies.
• Emphasizes practical guidance for implementation of a green PFM strategy, underscoring the need for a tailored approach adapted to country specificities and for a strong stewardship role of the Ministry of Finance.

Major entry points for Green PFM (as illustrated)

• Phases in the budget cycle:
  • Strategic planning and fiscal framework
  • Budget preparation
  • Budget execution and accounting
  • Control and audit
• Legal framework issues and cross-cutting considerations:
  • Fiscal transparency
  • Coordination with State Owned Enterprises
  • Coordination with subnational governments

Practical guidance and implementation priorities

• Tailor green PFM approaches to country specificities rather than adopting a one-size-fits-all model.
• Strengthen the stewardship role of the Ministry of Finance to mainstream climate and environmental objectives across PFM functions.
• Use country examples and multiple entry points across the budget cycle to operationalize green PFM reforms.

Subjects and keywords covered

• Subjects: Budget planning and preparation, Climate change, Climate policy, Environment, Public financial management (PFM)
• Keywords: Budget planning and preparation, Climate change, climate change adaptation, climate change mitigation, Climate policy, Global, green budgeting, green public financial management, mainstreaming, PFM function, PFM practice, PFM reform, public finances, Public financial management, view of Green PFM

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• How to Make the Management of Public Finances Climate Sensitive—“Green PFM”
  • How to Make the Management of Public Finances Climate Sensitive—“Green PFM” (Markdown version)
  • How to Make the Management of Public Finances Climate Sensitive—“Green PFM” (PDF)