Green budgets: how regional governments are turning climate ambition into spending

States and regions are increasingly using their budgetary powers to drive climate action. They’re aligning public spending with climate targets and sharing lessons across borders through a growing network of sub-national governments worldwide. The Under2 Coalition is the largest global network of states and regions pursuing net zero emissions by 2050.

It counts more than 270 members representing over half of world’s GDP, with the nonprofit Climate Group serving as its secretariat. Climate Group’s executive director Champa Patel points to the high degree of autonomy states and regions have when it comes to making impactful decisions. “State and regional governments in Europe, as in many other regions in the world, often have quite a lot of devolved powers,” she explains. “Whether that’s fiscal, regulatory, financial, technical; there are many policy areas where they can make most decisions themselves.” “They’re not necessarily reliant on national governments to set the direction. They can actually set more ambitious targets,” Patel says. To help turn that ambition into action, Climate Group launched its Next Generation Budgets project over two years ago. Bringing together 11 states and regions across Europe and the United States, the project aimed to integrate climate considerations into the budgetary processes of these subnational governments, and bolster climate finance and private investment. Budgets, Patel argues, reveal governments’ true priorities. “That’s really where ambition becomes implementation. If you want to know what people really want to do, look at what they spend their money on.” “The intention of the project was firstly to help governments to have budgets in place that made their net zero commitments real, but also to enable governments to learn from each other so they can share best practices.” One important way to align a government’s expenditures with its climate targets, is addressing a potential disconnect at the policymaking level. “Climate goals and decarbonisation policies are competences of the ministries of climate and environment, but important budgetary decisions that can actually help achieve these goals are made by the ministry of finance or the treasury,” Patel points out. “So the goal is to get those colleagues in the room together,” she continues.

Key points

• It counts more than 270 members representing over half of world’s GDP, with the nonprofit Climate Group serving as its secretariat.
• Climate Group’s executive director Champa Patel points to the high degree of autonomy states and regions have when it comes to making impactful decisions.
• “State and regional governments in Europe, as in many other regions in the world, often have quite a lot of devolved powers,” she explains.
• “Whether that’s fiscal, regulatory, financial, technical; there are many policy areas where they can make most decisions themselves.” “They’re not necessarily reliant on national governments to set…
• They can actually set more ambitious targets,” Patel says.