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• Integrating climate and nature related issues into the various stages of the budget cycle. Actions focusing on supporting PFM systems, and budget support operations have the capacity to encourage fiscal reforms addressing nature and climate challenges influencing processes that are centre to government.

Potential entry points for integrating the green dimension along the budget cycle include ¹ :

• • Strategic Planning and Fiscal Framework: medium term fiscal frameworks (MTFFs), fiscal risk assessments and fiscal strategies.
  • Budget preparation: budget circular, policy impact assessments, budget tagging (to compare allocations vis-à-vis policy objectives), medium-term budgetary frameworks.
  • Budget execution, accounting and reporting: adapting chart of accounts and financial management information system (FMIS), expenditure tagging ² (to compare actual vs planned spending), greening public procurement and public investment management systems.
  • Control and audit: internal and external audits, oversight bodies.

• Determining finance options, potentially implying a mix of budgetary resources including fiscal tools and the phasing out of harmful subsidies, stemming from dialogue between ministries of finance and line ministries. These can be accompanied by risk-sharing instruments and private and public insurance tailored to the local risks.
• Strengthening of internal controls and external audit, building the capacity of partner authorities, legislature and civil society organisations to analyse climate and environmental issues (including in the relevant reports) and to assess to what extent they are being integrated in the different stages of the budget cycle.
• Improving oversight, information and analysis of public climate and environmental action. This can be done through environmental expenditure reviews and technical, non-partisan organisations that act as “honest brokers” to national or territorial stakeholders facing issues in ensuring a just transition. Available information and analysis can help institutions in strengthening governmental commitments, addressing political economy issues, and increasing credibility of green public action.
• Extending a green PFM approach to subnational governments, and in line with the promotion of a green and circular economy, to State Owned Enterprises.
• Encouraging explicit high-level support from government (e.g. Minister of Finance, Prime Minister, President).

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