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This methodological framework will be closely scrutinized because methodological choices often are, in fact, political decisions: for example, analyzing environmentally harmful expenditures or looking only at those that are favorable to the environment is obviously not a simple technical choice.
This dynamic is good news. As I4CE summarized in its October report on green budgeting experiences around the world, environmental budget tagging improves transparency on public spending on climate; and this transparency is particularly welcome at a time when the idea of special treatment for climate spending in European budget rules is gaining ground. They also, and above all, make it possible to improve the way climate is taken into account in all budgetary decisions and negotiations, in particular by reinforcing the knowledge and involvement of finance ministries.
However, if these tagging exercises are useful and necessary, whether for a State or a local authority, one should keep in mind that they are only one piece of the puzzle. As Morgane Nicol from I4CE reminded us in a recent post, a green budget tells us how "green" a budget is, it does not tell us what a country's budget should look like to be consistent with its climate ambition. What every country needs is a comprehensive climate finance strategy. A technical tool such as the green budget can provide elements for the development of such a strategy and monitor its implementation. But the decision to develop a climate finance strategy and the broad orientations of this strategy - starting with the distribution between public and private financing - are political choices.
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