Climate Commitments and National Budgets: Identification and Alignment: Case Studies of Argentina, Colombia, Jamaica, Mexico, and Peru

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Ferro, Pamela;
Almeida, Dolores;
Rodríguez, Gabriela
Sep 2020
The successful implementation of NDCs will require specific efforts agreed among various actors including the ministries of finance and of planning to integrate climate and sustainable development into the national public planning, decision-making, and administrative processes. Public expenditure plays a key role in this task, since it represents one of the main official tools that governments use to finance the public policy responses to climate change. Therefore, it is a pillar for any financing strategy of NDCs and reflects the public investment priorities so it contributes to create a favorable environment to increase financing from the private sector and thus facilitate access to international climate finance. However, there is no clear evidence with respect to whether the ministries of finance of the region systematically envisage considerations on climate change when allocating the public budget, or how these considerations could be included in the future to make public policy decisions aimed at improving the efficiency, effectiveness and quality of public expenditure.

In this study, a practical exercise was conducted and the national budgets in five countries of Latin America and the Caribbean (Argentina, Colombia, Jamaica, Mexico and Peru) were reviewed in order to identify gaps, best practices and/or factors within budget processes which allow or hinder the inclusion of climate change components. Budgetary allocations were also analyzed in key sectors included in the NDCs (energy, transport, agriculture, natural resources and environment, and disaster risk management) to analyze the level of expenditure in activities that may help fight climate change or that may otherwise increase GHG emissions.