The Evolution of Green Budgeting

Abstract

The terms climate budgeting, green budgeting, and green fiscal policy are defined and illustrated, together with key environmental concepts and taxonomies. The two-way interactions between fiscal policies and the natural environment are described—the impacts on all environmental domains of taxation and spending, and the fiscal costs and risks from environmental degradation. Some quantitative evidence of environmental and fiscal impacts is cited. The evolution over the last decade of climate budgeting and green budgeting is described together with the associated development of technical guidance on these important practices. A wide range of developing, middle income, and advanced country practices are described including the latest cutting-edge practices. The chapter concludes with assessments of how green the initial COVID-19 pandemic responses by major countries have been.