Post-Paris Climate Governance Enhancing Predictability of Climate
Finance in the Post-2020 Period:
HOW COMPATIBLE ARE DEVELOPED COUNTRIES’ NATIONAL
BUDGETARY PROCESSES WITH THE EX-ANTE FINANCE
REPORTING MANDATE IN THE PARIS AGREEMENT?
Chris Ververis, Sylvia Lima, and Soomin Kim
AMERICAN UNIVERSITY, SCHOOL OF INTERNATIONAL SERVICE | MAY 2016
May 2016
A research project prepared for:
Joe Thwaites, Research Analyst, Finance Center, World Resources Institute
Prepared by American University, School of International Service, Practicum participant team:
Chris Ververis, M.A. Candidate in Global Environmental Policy
Sylvia Lima, M.A. Candidate in International Service
Soomin Kim, M.A. Candidate in Global Environmental Policy
Practicum Project Advisor:
Sikina Jinnah, Associate Professor, School of International Service, American University
Post-Paris Climate Governance - Enhancing
Predictability of Climate Finance in the Post2020 Period:
HOW COMPATIBLE ARE DEVELOPED COUNTRIES’ NATIONAL BUDGETARY
PROCESSES WITH THE EX-ANTE FINANCE REPORTING MANDATE IN THE
PARIS AGREEMENT?
Chris Ververis, Sylvia Lima, and Soomin Kim
AMERICAN UNIVERSITY, SCHOOL OF INTERNATIONAL SERVICE | MAY 2016
Contents
Executive Summary .................................................................................................................................................................. i
1. Introduction ........................................................................................................................................................................ 1
2. Methodology ....................................................................................................................................................................... 4
2.1.
Scope of Research ...............................................................................................................................................................................4
2.2.
Analytical Approach ............................................................................................................................................................................5
3. Existing and future mechanisms for reporting climate finance under the UNFCCC ........................................................... 6
3.1.
National Communications...................................................................................................................................................................6
3.2.
Biennial Reports ..................................................................................................................................................................................6
3.3.
Biennial submissions on strategies and approaches for scaling up climate finance ...........................................................................7
3.4.
Reporting processes to be developed under the Paris Agreement ....................................................................................................8
4. Assessment of the information provided in the biennial submissions on strategies and approaches for scaling up climate
finance ............................................................................................................................................................................... 10
4.1.
General and Cross-cutting Observations ..........................................................................................................................................10
4.2.
Information to increase clarity on the expected levels of climate finance .......................................................................................12
4.3.
Information on policies, programmes and priorities ........................................................................................................................15
4.4.
Information on actions and plans to mobilize additional finance .....................................................................................................15
4.5.
Information on ensuring the balance between adaptation and mitigation......................................................................................16
4.6.
Information on steps taken to enhance their enabling environments .............................................................................................17
5. Official development assistance, climate finance and forward spending plans ............................................................... 18
5.1.
Overview of how predictability evolved for official development assistance ..................................................................................18
5.2.
Providing ex-ante information for ODA and implications for climate finance ..................................................................................20
5.3.
Climate finance earmarking ..............................................................................................................................................................21
6. Analysis of the national budgetary processes used by Annex II Parties ........................................................................... 23
6.1.
Overview of information collected on Annex II Parties’ budgetary processes .................................................................................23
6.2.
Timing of budget cycles for Annex II Parties .....................................................................................................................................24
6.3.
Nature of Annex II Parties’ budgetary processes ..............................................................................................................................24
6.4.
Appropriating and tracking climate finance in the budgetary process .............................................................................................29
7. Feasibility of what ex-ante information that Annex II Parties could report ..................................................................... 31
7.1.
General observations ........................................................................................................................................................................32
7.2.
Quantitative and qualitative information on projected levels of public financial resources ............................................................33
7.3.
Considerations for negotiators in determining what quantitative and qualitative information should be reported ......................36
7.4.
Timing of the provision of ex-ante climate finance information ......................................................................................................38
7.5.
Timing of the provision of ex-ante climate finance information ......................................................................................................39
7.6.
Process and Format for the reporting of ex-ante climate finance information ................................................................................43
8. Key Findings and Recommendations ................................................................................................................................ 46
8.1.
Next steps for developing guidelines under the COP for the 2016 to 2020 period ..........................................................................47
8.2.
Ex-ante climate finance information developed country Parties could feasibly report ...................................................................48
8.3.
Next steps for developing guidelines under the COP for the 2016 to 2020 period ..........................................................................50
8.4.
Ex-ante climate finance information developed country Parties could feasibly report ...................................................................51
9. Annex ................................................................................................................................................................................ 54
9.1.
Current finance reporting requirements and related COP decisions ................................................................................................54
9.2.
Overview of budgetary processes used by Annex II Parties .............................................................................................................56
9.3.
Budgetary processes used by Annex II Parties ..................................................................................................................................57
List of Tables
Table 1 – The current 24 Annex II Parties under the UNFCCCC ........................................................................................................................................ 4
Table 2 – Summary of key meta-data on Annex II Parties’ submissions on strategies and approaches for scaling up climate finance to 2020 ............ 11
Table 3 – Comparison of the language used in the provisions of the submissions on strategies and approaches, and the ex-ante finance reporting
mandate of the Paris Agreement ................................................................................................................................................................................... 12
Table 4 – Annual budget cycle for Annex II Parties ........................................................................................................................................................ 24
Table 5 – Multiannual budgeting practiced at the national level by Annex II Parties .................................................................................................... 27
Table 6 – Multiannual planning for bilateral development cooperation practiced by Annex II Parties ......................................................................... 28
Table 7 – Comparison between announced pledges for climate finance in 2015 .......................................................................................................... 30
Table 8 – Overview of types of information provided through common tabular format (CTF) portion of the Biennial Reports ................................... 33
Table 9 – Types of quantitative and qualitative information on projected levels of public financial resources that could be provided ...................... 35
Table 10 – Sample timeline overview of the relationship between quantitative and qualitative information available on future climate finance flows
........................................................................................................................................................................................................................................ 36
Table 11 – Considerations for negotiators in identifying the ex-ante information to be reported ................................................................................ 36
Table 12 – Considerations for negotiators in addressing issues related to the timing of the provision of ex-ante climate finance information .......... 39
Table 13 – Overview of how potential submission periods relate to the start of Annex II Parties fiscal years (and their budget time scales) ............. 40
Table 14 – Considerations for how the ex-ante reporting mandate of the Paris Agreement could be submitted ......................................................... 43
Table 15 – Considerations for negotiators with regards to whether information is presented in either tabular or narrative form in the ex-ante reporting
process ........................................................................................................................................................................................................................... 44
Table 16 – Sample Biennial Report CTF, Table 7: “Provision of public financial support” .............................................................................................. 45
Table 17 – Example synthesis table for how the aggregate of projected levels finance included in developed country Parties’ ex-ante reports could be
presented ....................................................................................................................................................................................................................... 45
Table 18 – Current finance reporting requirements and related COP decisions ............................................................................................................ 54
Table 19 – Overview of budgetary processes used by Annex II Parties .......................................................................................................................... 56
List of Figures
Figure 1 – Overview of the analytical approach used in this report ................................................................................................................................. ii
Figure 2 – Timeline for developing the ex-ante finance reporting process under Article 9.5........................................................................................... 2
Figure 3 – Overview timeline of existing and future mechanisms for reporting climate finance under the UNFCCC ...................................................... 9
Figure 4 — Number of Annex II Parties that provide information on climate finance at various levels of governance within their domestic budgetary
processes ........................................................................................................................................................................................................................ 25
Figure 5 – Factors influencing the feasibility for a Party to provide a given type of ex-ante information on climate finance ....................................... 32
Figure 6 – Overview timeline of the possible relationship between ex-post and ex-ante reporting processes in the post-2020 period ...................... 41
Abbreviations
Annex II Party
APA
Article 9.5
BR
BUR
CMA
CMA1
COP
COP21
CPA
CTF
DAC
FY
GCF
GEF
GHG
IAR
ICA
IPCC
LTF
MDB
MTBF
NC
NC6
ODA
OECD
OFF
PA
SA
SCF
UNFCCC
Party included in Annex II to the Convention
Ad Hoc Working Group on the Paris Agreement
Article 9, paragraph 5, of the Paris Agreement
Biennial Report
Biennial Update Report
Conference of the Parties serving as the meeting of the Parties to the Paris Agreement
first session of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement
Conference of the Parties
twenty-first session of the Conference of the Parties
Country Programmable Aid
common tabular format
OECD Development Assistance Committee
Fiscal year
Green Climate Fund
Global Environment Facility
Greenhouse gas
international analysis and review
international consultation and analysis
Intergovernmental Panel on Climate Change
extended work programme on long-term finance
multilateral development bank
medium-term budgetary framework
National Communication
sixth National Communication
official development assistance
Organisation for Economic Co-operation and Development
Other Official Flows
Paris Agreement
Biennial submission on strategies and approaches for scaling up climate finance to 2020
Standing Committee on Finance
United Nations Framework Convention on Climate Change (or ‘the Convention’)
Enhancing Predictability
of Climate Finance in the
Post-2020 Period:
How Compatible Are Developing Countries’ National
Budgetary Processes with the Ex-ante Finance Reporting
Mandate in the Paris Agreement?
Authors: Chris Ververis, Sylvia Lima, Soomin Kim
Executive Summary
The Paris Agreement, adopted by the United Nations
Framework Convention on Climate Change (UNFCCC) in
December 2015, establishes a new requirement for developed
countries to biennially communicate indicative quantitative and
qualitative information on projected levels of public financial
resources to be provided to developing countries (Article 9,
paragraph 5). This requirement must implemented by the end of
2016, initiating a process to identify the information that
developed countries can provide.
A central challenge for this new reporting process is how to
design a system that can strike a balance between developing
country Parties’ need for transparency and predictability of
climate finance flows, and the capability of developed country
Parties to provide such information. Crucially, such a reporting
system must adapt to the constraints imposed by developed
countries’ rules, and laws. In particular, the system must (1)
conform to the legal constraints imposed by developed country
Parties’ national budgetary processes and (2) adapt to actual
operational capabilities of those Parties’ to track the provision
of future climate finance.
This report provides the World Resources Institute (WRI) with a
feasibility analysis of what for Annex II countries could report
biennially to help enhance the predictability of climate finance
and, therefore, support WRI´s engagement with UNFCCC
negotiators on implementing this provision of the Paris
Agreement.
Our approach involves the following interrelated tasks to
identify what information could be feasible for developed
country Parties to communicate:
Section 3: A review of existing and future mechanisms under the
UNFCCC that include reporting on the provision of climate
finance;
Section 4: An assessment of the quality of information already
provided through an existing UNFCCC reporting mechanisms
that includes information on developed country Parties
efforts to scale up future climate finance;
Section 5: An overview of existing reporting processes outside of
the UNFCCC that report on official development assistance
(ODA), including climate finance;
Section 6: An analysis of the budgetary processes of 24
developed countries (Annex II countries Parties to the
UNFCCC), including the EU, to identify key legal constraints
and operational capacities to track the provision of future
climate finance;
Section 7: A discussion of the feasibility of types of information
that could be provided based on the findings of Sections 3 to
6 and considerations for negotiators to consider in
developing guidelines for the reporting process.
Figure 1 provides an overview of the analytical approach used in
this report. To identify what information developed country
Parties could feasibly report under Article 9.5, this report
explores reporting processes within (Section 3 and 4) and
outside (Section 5) the UNFCCC system, and analyzes national
systems to understand how information on climate finance is
tracked and appropriated. Each of these approaches feeds into
a discussion of what information could be feasible for developed
country Parties to provide (Section 7). Key findings and
recommendations are discussed in Section 8.
Section 3 Summary: Existing and future mechanisms for
reporting climate finance under the UNFCCC
Over the years, the Convention has adopted several reporting
processes aimed at ensuring that the COP has accurate,
consistent, and relevant information to review implementation
of the Convention. Currently there are three primary reporting
processes for information on climate finance: the National
Communications (NCs), the Biennial Reports (BRs) and Biennial
Update Reports (BURs), and ‘the biennial submissions on
strategies and approaches for scaling up climate finance to 2020’
(hereinafter ‘submissions on strategies and approaches’). The
NCs and BRs require the reporting of climate finance provided in
the past (ex-post). In contrast, the submissions on strategies and
approaches serves as the only current reporting requirement
i
Figure 1 – Overview of the analytical approach used in this report
UNFCCC reporting system
Other reporting National Systems
systems
Section 3
Section 4
Section 5
Section 6
Review of
existing and future
mechanisms
under the UNFCCC
Assessment of
ex-ante info
already provided
under the UNFCCC
Overview of
existing reporting
processes outside
of the UNFCCC
Analysis of
the budgetary
processes of
Annex II Parties
Section 7
Discussion of what ex-ante information could be feasible
for developed country Parties to provide
designed to provide information on future climate finance (see
Figure 2 for a timeline overview of the reporting systems).
The Paris Agreement establishes several new and related
reporting requirements for the post-2020 period. The COP21
outcome states that this new system is to “build on” and
eventually “supersede” the existing transparency arrangements
under the
Convention (decision 1/CP.21). The COP21 outcome explicitly
states that this mandate include the BRs and BURs, however, it
is silent on whether the ex-ante reporting process is also
included in this mandate.
Recommendation #1:
 Build on existing Convention mechanisms to develop an ex
ante reporting system: The biennial submission on
strategies and approaches should be considered an
existing mechanism through which Parties can begin to
improve the reporting of ex-ante information on climate
finance in the pre-2020 period.
Section 4 Summary: Information provided in the biennial
submissions on strategies and approaches for scaling up
climate finance
Currently, the biennial submissions on strategies and
approaches only provide some utility in communicating
“information on quantitative and qualitative elements of a
pathway” to scaling up climate finance to 2020, as is requested
by the 2013 COP decision that established the reporting process.
The information in the 2014 submissions varies between Parties
in terms consistency in type, level of detail, structure of the
information provided.
In terms of type of information included in the submissions,
Parties largely provided qualitative information. Quantitative
information, when included, was predominantly climate finance
provided in past years. However, some Parties did provide clear
indications of future financial flows. These issues may be due, in
part, to a lack of specificity in the reporting guidelines, which are
substantially less detailed than other reporting processes under
the Convention.
It is also worth noting that the language used in the mandate for
the submissions on strategies and approaches (from COP 19 and
20) is quite similar to the ex-ante reporting mandate of the Paris
Agreement (see Table 3). This similarity suggests that there may
be an important link for negotiators to consider in developing
guidelines for reporting under Article 9.5 of the Paris Agreement
and in its work to identify the information that could be
provided.
Recommendation #2:
 Parties should further modify the reporting mandate, as
has been done in COP20, for the biennial submissions over
the 2016 to 2020 period to begin developing and testing
guidelines for providing information on “projected levels of
public financial resources”.
ii
Section 5 Summary: Official development assistance, climate
finance and forward spending plans
Many developed countries already provide some forwardlooking information on official development assistance (ODA) in
other forums (e.g. OECD DAC) and are striving to set collective
and individual goals for adjusting their national budget
processes to improve the quality of forward-looking
information.
The fact that OECD countries have agreed and are able to
provide limited forward spending plans for up to three years is a
strong indication that these countries’ domestic budgetary
processes are at least somewhat compatible with providing
indicative information on projected levels of finance resources
(particularly for general ODA). However, methodological issues
in tracking international climate finance remain a challenge for
ex-post flows and it remains unclear how these methodologies
could be used well for projecting future flows of climate finance.
Recommendation #3:
 UNFCCC negotiators should consider whether practice
used in other forums to provide forward spending plans for
ODA could also be applied to the climate process. Annex II
Parties should work cooperatively to improve the quality of
climate finance information over time, as they do in other
forums.
Section 6 Summary: National budgetary processes used by
Annex II Parties
This section explores how Annex II Parties’ budgetary processes
appropriate climate finance and whether Parties have mediumterm planning processes in place that could provide indicative
information on spending plans beyond the annual budget cycle.
This analysis identifies key constraints and operational
capabilities to track the provision of future climate finance.
Annex II Parties approve their annual budgets at different times
during the year. This variation impacts how much forward
spending information from annual appropriations is available for
reporting from each Party at any given time during the year.
We observe a number of general dynamics about how
information on climate finance is tracked in similar ways across
annual and multiannual budgets, within and between Parties.
Granularity of information on climate finance varies in key ways
across national budget documents, national policies or
strategies, and department- or agency-level policies and
programmes –within and between developed country Parties.
The relationship between levels of governance in the budgetary
process described above reveals that there is an important
diversity of multiannual planning processes to be considered in
identifying indicative information on Annex II Parties’ future
spending plans that go beyond the current fiscal year.
Most of the Annex II Parties have some form of multiannual
national budget in place. These budgets are generally indicative;
less detailed than annual appropriations, and are used to guide
annual appropriations processes in future years. Meanwhile, all
of the Annex II Parties, apart from their multiannual national
budgeting systems, have multiannual bilateral cooperation
development programmes and strategies with timeframes that
depend on the donor-recipient’s partnership contracts and
agreements. Climate finance is mostly allocated under these
bilateral programmes managed by agencies or delivered under
ODA in national budgets.
A starting point for tracking future climate finance are the
pledges countries announce to the UNFCCC and to the
international community. However, there is still a gap between
what countries pledge and what they can really deliver, since
pledges are not legally binding, and there is lack of clarity on how
such funding is planned and allocated within the domestic
budget process.
Recommendation #4:
 Differences in the type of climate finance information
available at various levels of governance should be taken
into account in developing the guidelines for reporting.
Parties should make the indicative information on future
spending plans as available as possible. Recognizing how
different types of information complements one another
can aid in improving overall transparency and predictability
of future financial flows.
Analysis and Conclusions: Feasibility of what ex-ante
information that Annex II Parties could report
Developed country Parties’ national budget processes are
compatible with ex-ante climate finance reporting in a limited
and nuanced way. Overall, all Annex II Parties are able to provide
some indicative qualitative or quantitative information on
projected levels of public financial resources. However, the
extent that such information can be provided from each level of
governance is highly dependent on the specific legal and
operational contexts of each Party, and its political willingness
to provide such information. Understanding the constraints
iii
posed by domestic budgetary processes is key to effectively
assessing what ex-ante information developed country Parties
can provided on climate finance.
This report identified three categories of factors that serve as
potential barriers for reporting forward-looking information (see
Figure 5):
 Legal: Domestic legal processes strictly control the use of
public finance. Such processes can determine when
information can be available, in what quantities, and how
such information is qualified with regards to its intended
use.
 Political: Political dynamics tend to drive how climate
finance is prioritized and characterized within domestic
strategic planning and policy-making process as it
competes with other priorities. Such factors can include a
Party’s risk aversion to having international indicative exante information construed as commitments, or domestic
political perception that climate finance ‘takes away’ from
competing priorities.
 Operational: Operational factors within Parties’
institutions can significantly impact the availability of
forward-looking information due to how climate finance is
managed and what methodologies those institutions use
to track climate finance. Such factors can include how
departments and agencies develop bilateral spending
plans with partner countries, formulate strategic or policy
goals, and how climate finance is operationally defined and
tracked in a way that allows for ex-ante information to be
available.
Table 9 provides an overview of the types of quantitative and
qualitative information on projected levels of public financial
resources that this report considers feasible to provide, as
applicable, and as available. Table 10 provides a sample timeline
overview of the relationship between quantitative and
qualitative information available on future climate finance
flows.
For quantitative information, it appears feasible for developed
country Parties to provide some information on expected levels
of future ‘public financial resources’. Methodological limitations
constrain how climate finance is appropriated and tracked
within budget processes. This inhibits the quantification of
climate-specific finance over Parties’ annual and medium-term
spending plans at the national or department level. However,
quantitative information on forward spending plans for general
international development cooperation does broadly appear to
be available for most Parties, with information such as spending
ceilings, floors, qualifiers, baselines, and distribution periods.
With regards to pledges for climate finance, it appears to be
quite reasonable to expect or encourage Parties to include a full
reiteration of their various pledges in the new UNFCCC ex-ante
reporting process. In line with the mandate of Article 9.5, it
appears feasible that Parties include more detailed information,
“as available”, about current pledges. The elaboration on the
details of the pledges over time would likely also be supportive
of a credible and ‘clear pathway to scaling up climate finance’.
For qualitative information, it appears feasible that developed
country Parties can provide information that can meaningfully
qualify how projected levels of public financial resources will be
used for climate finance. Such information can be useful or
unhelpful on its own for improving the predictability of future
climate finance flows if complementing quantitative information
(as discussed above) by ‘filling information gaps’ on how
national or ministry budgets will be used for climate-specific
purposes.
Among a number of considerations for negotiators to take into
account in determining what quantitative and qualitative
information should be reported, we identify the following
elements/factors:
Identifying the ex-ante information to be reported (Table 11)
 Balance between the provision of quantitative and
qualitative information
 Consistency of the information provided between different
Parties’ submissions
 Level of accountability incumbent upon Parties for
implementing actions based on the information
communicated
Timing of the provision of ex-ante climate finance information
(Table 12)
 Timing of when reports are submitted to the Convention
 Time frames covered by projected levels of public financial
resources
 Evolution of the reporting guidelines over time
Process and format for the reporting of ex-ante climate finance
information (Table 14 and Table 15)
 The process through which ex-ante information may be
communicated
 Format of the ex-ante information under the reporting
process
iv
General Recommendations:
 Compatibility: An analysis of the budgetary processes of
Annex II Parties makes clear that some level of multiannual
quantitative information is available from most Parties.
However, given that most budget processes are designed
to allocate for general ODA and not specifically climate
finance, negotiators need to consider how the availability
of such information can be utilized in the UNFCCC reporting
process.
 Mutual role of quantitative and qualitative information:
Quantitative and qualitative information play a mutually
supportive role. Specifically, the provision of qualitative
information should be approached as a way to ‘fill the gap’
in providing clarity where forward-looking quantitative
information is not yet available.
 Expected levels of future public financial resources: It is
possible for most Parties to provide information on their
planned contributions to multilateral channels since most
of such funds are directly allocated through the budget
process. Bilateral, regional, or other channels may be more
challenging to expect to be provided because the allocation
and management of such funds are usually controlled at
the department- or agency-level and are subject to project
planning constraints, particularly in light of the role of
‘country-ownership’ in development cooperation with
developing countries. All current climate finance pledges
should be included in ex-ante reporting which in the form
of aggregate spending levels, or thematic or regional goals.
o Qualifiers for future spending plans: Any quantitative
information should be qualified as applicable and as
available along the same categories used in ex-post
reporting. Information unique to ex-ante reporting
should include the type of spending plan (e.g. ceiling,
floor, projected, etc) and its status (e.g. committed,
pledged, indicative, etc).
 Qualitative information related to scaling up climate
finance: Parties should continue to communicate
information on policies, programmes, and priorities
(including actions and plans); efforts to ensure a balance
between adaptation and mitigation; and steps taken to
enhance enabling environments as they are currently
doing under the biennial submissions on strategies and
approaches.
Next Steps looking forward:
 Getting specific on the mandate of the process initiated at
COP22: The brevity of the COP21 decision to simply ‘initiate
a process’ at COP22 suggests that the outcome of this
session will be a mandate for a subsidiary body to conduct
the process from 2017 until CMA1. During 2016,
negotiators should develop a clear mandate to enable the
body to move quickly into its work in 2017.
 Initiating a ‘technical’ process in 2016: Parties should
request a subsidiary body to begin a ‘technical process’ at
COP22 to identify the information mandated in Article 9.5
of the Paris agreement. The objective of this process, inter
alia, should be to understand the characteristics of the
budgetary process and national policies of Annex II Parties
to identify what information is feasible to report.
Key Takeaways
 Annex II Parties’ budget processes are compatible with the
ex-ante finance reporting mandate of the Paris Agreement,
however specific national circumstances will need to be
taken into account in developing the reporting guidelines
to optimize what is most feasible for each Party to
communicate.
 Many of the same developed countries are working
through other forums, such as the OECD DAC, to provide
regular forward spending plans for general ODA, indicating
precedent for developed country Parties to the UNFCCC to
adopt similar practices.
 Annex II Parties’ budgetary processes reveal that the
majority have some form of multiannual planning that
incorporates climate finance, although the majority of
these processes are currently designed to track ODA and
do not often systematically tracking appropriations to
climate finance (but some do).
v
1. Introduction
The capacity of countries to respond to climate change varies
enormously. One way that the United Nations Framework
Convention on Climate Change (UNFCCC, or the Convention) 1
seeks to address this is by providing mechanisms through which
Parties with more resources and more financial capacity may
assist those countries with less resources and less capacity to
both mitigate greenhouse gas emissions and adapt to the
impacts of climate change.2
The Paris Agreement, adopted by the UNFCCC in December
2015, is considered to be an important step in the evolution of
climate governance and a reaffirmation of environmental
multilateralism, 3 however, it remains an open question the
extent that this new international treaty will improve the
transparency and predictability of the provision of climate
finance to developing country Parties. What is clear though is
that climate finance will be key to effectively implementing the
Paris Agreement, and that accurate, transparent reporting of
climate finance by developed country Parties, particularly
information on projected levels of public financial resources, is
essential to ensure that accountability of climate finance flows.
The stated purpose of the Paris Agreement with regards to
finance is to aim “to strengthen the global response to the threat
of climate change… including by… making finance flows
consistent with a pathway towards low greenhouse gas
emissions and climate-resilient development” (Article 2.1).4 One
way that this objective will be operationalized is through
improving the predictability of financial resources by requiring
1
UNFCCC. (1992). INFORMAL/84, “United Nations Framework
Convention on Climate Change”.
2 UNFCCC, (n.d.). Climate Finance. Retrieved April 29, 2016, from
http://unfccc.int/cooperation_and_support/financial_mechanism/ite
ms/2807.php
3 Earth Negotiations Bulletin, (2015) Summary of the Paris Climate
Change Conference. Volume 12 Number 663. Retrieved March 30,
2016, from http://www.iisd.ca/vol12/enb12663e.html
4 UNFCCC. (2015, December). Decision 1/CP.21 Adoption of the Paris
Agreement
5 For a complete list of tasks arising from COP21 with regards to
preparation for entry into force of the Paris Agreement, see 1/CP.21
and this note by the UNFCCC secretariat: UNFCCC, “Taking the Paris
Agreement forward: Tasks arising from decision 1/CP.21”. January
2016.
6 UNFCCC. “1/CP.21 Adoption of the Paris Agreement”. December
2015, Article 9, paragraph 5. In addition to requirements for
developed country Parties to provide indicative information on
future levels of climate finance. Article 9, paragraph 5, of the
Paris Agreement states: 5
“Developed country Parties shall biennially communicate
indicative quantitative and qualitative information related to
paragraphs 1 and 3 of this Article, as applicable, including, as
available, projected levels of public financial resources to be
provided to developing country Parties. Other Parties providing
resources are encouraged to communicate biennially such
information on a voluntary basis.” (emphasis added) 6
This mandate for developed country Parties to communicate
projected levels of public financial resources is a new type of
development under the Convention. Climate finance reporting
requirements have generally been limited to the provision of expost information so it is not yet clear how countries will be able
to provide such information, or even how such an ex-ante
reporting system would be designed for climate finance. To
begin to address these questions, the Conference of the Parties
(COP) will begin a process at COP 22 to identify the information
that developed country Parties will provide under this reporting
requirement as set out in Decision 1/CP.21:
“[The COP] [d]ecides to initiate, at its twenty-second session, a
process to identify the information to be provided by Parties, in
accordance with Article 9, paragraph 5, of the Agreement with a
view to providing a recommendation for consideration and
adoption by the Conference of the Parties serving as the meeting
of the Parties to the Paris Agreement at its first session;”
(emphasis added)7
The requirement provides an indication of the time frame
anticipated for the COP’s work.8 The first session of the Meeting
of the Parties of the Paris Agreement (CMA1) is to take place in
developed country Parties, the Paris Agreement states that “other
Parties providing resources are encouraged to communicate biennially
such information on a voluntary basis”. This report, however, focuses
exclusively on the types of information which developed country
Parties may provide given that they are explicitly named in the
Agreement as having to comply with such reporting and that the
majority of public finance provided is expected to flow from these
Parties.
UNFCCC. “1/CP.21 Adoption of the Paris Agreement”. December
2015, paragraph 55.
8 The Conference of the Parties serving as the meeting of the Parties
to the Paris Agreement (or CMA) is to be the governing body of the
Paris Agreement after the agreement enters into force (Article 16).
7
1
conjunction with the next session of the COP after entry into
force of the agreement (Article 16.6) which will occur only after
the conditions for entry into force are met. 9 Although it is not
possible to predict when this may occur, the CMA may choose
to accept any recommendations from the COP at CMA1 and
continue to develop and eventually adopt final guidelines for the
reporting process mandated in Article 9.5. Figure 2 provides an
overview of the timeline for developing the ex-ante finance
reporting process under Article 9.5.
A central challenge in developing recommendations for this new
reporting process is how to design a system that can strike a
balance between developing country Parties’ desire for
adequate information on future financial support and the
capability of developed country Parties to provide such
information. Developing country Parties have long argued for
the need to improve the transparency and predictability of
climate finance, particularly the timing, scale, reliability, and
directionality of future support. Crucially, such a reporting
system must also (1) conform to the legal constraints imposed
by developed country Parties’ national budgetary processes and
(2) adapt to actual operational capabilities of those Parties’ to
track the provision of future climate finance on an ex-ante basis.
Although Parties will have a number of years to negotiate the
details of the reporting guidelines before 2020, it will remain to
be seen how such a balance will be struck.
The objective of this report is to provide the World Resources
Institute (WRI) with an understanding of what information is
feasible for Annex II country Parties to report biennially to help
enhance the predictability of climate finance and, therefore,
support WRI´s engagement with UNFCCC negotiators on
implementing this provision of the Paris Agreement. Since at
least 2013, some developed country Parties have noted that
“constraints imposed by budgetary practices, rules and laws” are
key factors that determine the information that developed
country Parties can provide in relation to public finance. 10 In
light of these observations, the approach of this report seeks to
Figure 2 – Timeline for developing the ex-ante finance reporting process under Article 9.5
9
The Paris Agreement will enter into force after 55% of Parties to the
UNFCCC representing a total global GHGs have ratified the agreement
(Article 21). Although a year for entry into force is not stipulated in the
treaty, it is generally understood to be intended to take effect in the
post-2020 period after the end of the second commitment period of
the Kyoto Protocol ends in 2020. See more information here: UNFCCC,
“Entry into force of the Paris Agreement: legal requirements and
implications”. Informal note prepared by the UNFCCC Legal Affairs
Programme. January 2016. Or Here: Eliza Northrop and Katherine
Ross. “After COP21: What Needs to Happen for the Paris Agreement
to Take Effect?”. World Resources Institute. January 2016. Status of
ratification is available here on the UNFCCC website.
10
In its 2013 summary report, the extended work programme on longterm finance (LTF) under the UNFCCC identifies a number of technical
challenges encountered by developed country Parties with regards to
providing a clear pathway to scaling up climate finance. Relevant here,
the LTF noted key factors that constrain “the extent to which
[developed country Parties] are able to provide information on
budgets and/or forecasts of public expenditures in future years”,
including “national legislation, policies, rules and practices”. (UNFCCC,
(2013). CP/2013/7. Report on the outcomes of the extended work
programme on long-term finance, Note by the co-chairs.).
2
examine the compatibility of developed country Parties’
national budgetary processes with the ex-ante finance reporting
mandate in the Paris Agreement through 4 key questions:
1.
2.
3.
4.
How much upfront information do developed country
Parties give on future provision of climate finance now,
and are there observable best practices or ways to
improve the current system?
Do developed country Parties under the UNFCCC
currently provide ex-ante information on public finance
for
development
assistance
through
other
international forums, and if so, what lessons can be
learned that are relevant to providing such information
on climate finance?
How do developed country Parties’ budgetary
processes appropriate climate finance and are there
medium-term planning processes in place that would
provide indicative information on spending plans
beyond the annual budget cycle?
Given the findings of (1) through (3), what information
can developed country Parties feasibly report under the
ex-ante finance reporting mandate in the Paris
Agreement?
feasible for developed country Parties to provide biennially on
the basis of their observed actions inside and outside the
UNFCCC process and on the basis of their limitations posed by
their national processes. Finally, Section 8 details
recommendations on information that may be feasible for
Parties to report, potential next steps for developing guidelines
under the COP for the 2016 to 2020 period, and suggestions for
future research.
This report provides findings and recommendations to World
Resources Institute (WRI) to utilize in its engagement with
UNFCCC negotiators on implementing the ex-ante climate
finance reporting requirement of the Paris Agreement.
Section 2 outlines the methodology used to answer the above
questions. To the address first question, Section 3 reviews the
existing UNFCCC mechanisms through which developed country
Parties report climate finance, including mechanisms to be
developed under the Paris Agreement. Section 4 then assesses
quality of information provided through one of these existing
mechanisms to identify the types of ex-ante information that
developed country Parties already provide -- a reporting process
known as “the biennial submissions on strategies and
approaches for scaling up climate finance to 2020”. To address
the second question, Section 5 presents an overview of financing
for official development assistance (ODA) and how countries
relate climate finance to its framework, highlighting the
elements of ex-ante information on the ODA programming
processes and forward spending plans that could be used as
examples for the country biennial submissions on climate
finance.
Section 6 addresses the third question by analyzing the
budgetary processes of 24 developed country Parties, including
the European Union, to identify key legal constraints and
operational capacities to track the provision of future climate
finance. Section 7 addresses the last question by analyzing the
findings of Sections 3 to 6 to explore what information may be
3
2. Methodology
The methodology used in this report is comprised of two
principal elements: a qualitative document analysis, and a
feasibility study approach. While the first provides with the
empirical data for the analysis, the second defines the criteria to
qualify the information acquired.
The report was further informed by desk research and a nonexhaustive literature review conducted by the authors. When
following these steps the research aims to extract evidence of
what it is feasible for the Annex II Parties to provide as ex-ante
information in light of legal and operational constraints posed by
those countries’ national processes.
2.1. Scope of Research
The objects of analysis, for the purpose of this research, are the
“developed country Parties” required to report information
under Article 9, paragraph 5, as stated in the Paris Agreement.
However, the agreement does not explicitly define this term and
therefore, for the purpose of this research, this report defines
“developed country Parties” as the 24 Parties currently included
in Annex II to the Convention, including the European Union. 11
Table 1 shows current Annex II Parties of the Convention.
The qualitative document analysis focuses on the assessment of
information in documents from Annex II countries parties’ to the
UNFCCC that can indicate:
1. How countries currently provide information on climate
finance according to UNFCCC mandates,
2. How these countries provide ex ante information on
financing foreign development assistance,
3. To what extent national budgetary processes allow for the
provision of ex ante information on climate finance.
11
Annex II Parties are a subset of Annex I Parties to the Convention.
Therefore, all obligations pursuant to Annex I Parties are necessarily
pursuant to Annex II Parties. Annex I Parties include the industrialized
countries that were members of the OECD in 1992, plus countries with
economies in transition (the EIT Parties), including the Russian
Federation, the Baltic States, and several Central and Eastern
European States. Annex II Parties consist of the OECD members of
Annex I, but not the EIT Parties. (UNFCCC, (n.d.). Parties & Observers.
Retrieved March 30, 2016, from
http://unfccc.int/parties_and_observers/items/2704.php.) Although
Table 1 – The current 24 Annex II Parties under the UNFCCCC
Australia
Austria
Belgium
Canada
Denmark
European Union
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
United States
With regards to a definition for ‘climate finance’, this research
allows the term to be defined by the donor country Party and
does not seek to propose a singular definition. Although a
precise definition for climate finance remains contentious
among Parties and there is no agreed definitions of ‘climate
finance’12, climate finance generally refer to “local, national or
transnational financing—drawn from public, private and
alternative sources of financing—that seeks to support
mitigation and adaptation actions that will address climate
change”13.
The definition for what consists predictable climate finance in
this research draws on the broader definition used by the
Organization for Economic Cooperation and Development
(OECD) to define foreign aid predictability for which, it states
that states:
“Aid is predictable when partner countries can be confident about
the amounts and the timing of aid disbursements, and identifies
two complementary dimensions: transparency (timely availability
of information on expected aid flows with the appropriate degree
of detail) and reliability (the extent to which partner countries can
Turkey was originally included in Annex II, it is excluded from this
analysis because it has since been removed from Annex II.
12 Report on the outcomes of the extended work programme on longterm finance
13 (UNFCCC, (n.d.). “What is climate finance?” Retrieved March 30,
2016, from http://bigpicture.unfccc.int/content/understanding-theunfccc.html#content-climate-finance.
4
rely on donor pledges/commitments being translated into actual
flows).”14
2.2. Analytical Approach
For the qualitative document analysis, this report analyzes peer
reviewed technical papers and reports, and publicly available
government documents. These documents included, inter alia,
the following:
 Reports submitted by Annex II Parties to the UNFCCC
including recent National Communications, Biennial
Reports, and ‘submissions on strategies and approaches
for scaling up climate finance’;
 Relevant documents form UNFCCC subsidiary bodies,
including the work programme on long-term finance;
 Decisions of the Conference of the Parties to the UNFCCC
(COP decisions), including the Paris Agreement);
 Reports from non-UNFCCC forums including the OECD
generally and the OECD DAC;
 Publically available government documents;
 Academic literature and reports by nongovernmental and
intergovernmental organizations (e.g. WRI, ODI, and World
Bank).




Overall budget framework
Climate finance in the budget process
Planning at operational level
Availability of projected levels of public financial resources
The information gathered from the analysis done in sections 6
and 7 was organized and summarized in tables to facilitate
comprehension and visualization of commonalities and
differences. The elements of comparison that composed the
tables consist of aspects that can provide insights on possible exante information countries are able to provide regarding climate
finance. Those aspects were predefined as being relevant for
increasing predictability of climate financial flows such as: a)
when the information is available, b) what is the scale of the
financial allocation, c) how reliable the information is in terms of
being either committed in the budget or just planned and d) if
the financial allocation have any specific target (region or
country, specific type of projects).
Publically available government documents were accessed for
the analysis of budgetary processes. Some limitations may incur
in this approach since the information publicly available varies
considerably among countries depending on domestic policies
and on the level of detail of budget documentation and public
disclosure.
When analyzing the reports submitted by Annex II Parties,
analysis focused on evaluating commonalities and differences
among Parties in reporting climate finance and comparing and
contrasting the type of quantitative and qualitative information
provided.
The budget process of each of the 24 Annex II Parties (Annex to
this report) is organized in a standard format as “fact sheets” to
allow for comparisons to be made between national processes.
Information in the fact sheets summarize the four following
aspects:
14
OECD DAC (2011) Aid Predictability – Synthesis of Findings and Good
Practices. DAC Working Party on Aid Effectiveness – Task Team on
Transparency and Predictability, Vol.1.
5
3. Existing and future mechanisms for
reporting climate finance under the
UNFCCC
In order to understand what ex-ante information on climate
finance developed country Parties could provide in the post2020 period, it is necessary to review what information is
presently being provided by those Parties through existing
mechanisms, as well as understand the mechanisms to be
developed for the Paris Agreement. Through this review, one
can then determine how the existing system might be built on.
Over the years, the Convention has adopted a number reporting
procedures in order to ensure that the COP has accurate,
consistent, and relevant information in order to review its
implementation. The Convention currently has three primary
reporting processes for information on climate finance: the
National Communications (NCs), the Biennial Reports (BRs) and
Biennial Update Reports (BURs), and ‘the biennial submissions
on strategies and approaches for scaling up climate finance to
2020’. The Paris Agreement and decision 1/CP.21 Adoption of
the Paris Agreement also establish a number of new and related
reporting requirements for the post-2020 period.
Each process is summarized below and a more detailed
assessment of the submissions on strategies and approaches is
provided in Section 4 due to its unique orientation to providing
current and future information on climate finance. In contrast,
both the NCs and BRs are primarily ex-post reports outlining
financial support already provided (or at least ‘committed’). See
the table provided in Section 9.1 of the annex for more detailed
information on reporting requirements for each process
described below.
15
Submitted NCs are available on the UNFCCC website at:
http://unfccc.int/national_reports/annex_i_natcom/submitted_natco
m/items/7742.php. 6th National Communications were submitted
between August 2013 and July 2015. Submissions ranged from 183 to
536 pages in length with an average of 310 pages (note: some
submissions include a previously submitted Biennial Report).
16 UNFCCC. (n.d.). National Reports. Retrieved March 30, 2016. from
http://unfccc.int/national_reports/items/1408.php.
17 A compilation of financial information submitted through NCs from
Annex I Parties is available on the Financial Portal for Climate Change
on the UNFCCC website.
3.1. National Communications
National Communications (NCs)15 were the first major reporting
process under the Convention. NCs have been submitted by
Annex I Parties (which includes Annex II Parties) every 4 years
since 1994 and “provide information on emissions and removals
of greenhouse gases (GHGs); national circumstances; policies
and measures; vulnerability assessment; financial resources and
transfer of technology; education, training, and public
awareness; and any other details of the activities a Party has
undertaken to implement the Convention”. 16 Requirements
with regards to climate finance include detailed information on
the financial assistance provided to developing country Parties
through bilateral, regional and other multilateral channels. 17
Developing country Parties (non-Annex I Parties) have also
submitted NCs since as early as 1997 but are subject to different,
and less stringent reporting requirements. The NCs undergo a
technical review process - see Section 3.2 below and associated
footnotes for more information.
3.2. Biennial Reports
The Biennial Reports (BRs)18 were established at COP16 in 2010,
the year after the failed negotiations at COP15 in Copenhagen,
as a means to further improve the tracking of implementation of
the Convention. BRs have been submitted biennially by Annex I
Parties since 2013 and outline “progress in achieving emission
reductions and the provision of financial, technology, and
capacity-building support to non-Annex I Parties”.19 BRs are to
be submitted in sequence with Parties’ NCs such that every
other BR is published in conjunction with its NC. The information
in BRs is submitted in narrative form, as well as presented in a
“common tabular format” (CTF) to standardize the presentation
of information. BRs, additionally undergo a review process
referred to as an international analysis and review (IAR). 20
18
Submitted BRs are available on the UNFCCC website at:
http://unfccc.int/national_reports/biennial_reports_and_iar/submitte
d_biennial_reports/items/7550.php. Second Biennial Reports were
submitted between December 2015 and March 2016. Submissions
ranged from 40 to 241 pages in length with an average of 108 pages.
19 UNFCCC. (n.d.). National Reports. Retrieved March 30, 2016. from
http://unfccc.int/national_reports/items/1408.php
20 UNFCCC. (n.d.). International Assessment and Review Process.
Retrieved March 30, 2016, from
http://unfccc.int/focus/mitigation/the_multilateral_assessment_proc
ess_under_the_iar/items/7549.php.
6
Requirements with regards to climate finance include the
provision of information on the financial support it has provided,
committed and/or pledged to assist non-Annex I Parties and to
present such information in a textual and tabular format.21 NonAnnex I Parties also submit reports called Biennial Update
Reports (BURs) but are subject to different, and less stringent
reporting requirements, 22 including its own technical review
process referred to as an international consultation and analysis
(ICA).23 The technical review processes for the BRs and BURs is
are designed to review the information reported in such
documents, seek to assist Parties in improving their reporting of
information over time, and ensure that the COP has accurate,
consistent, and relevant information in order to review the
implementation of the Convention.24
3.3. Biennial submissions on strategies and
approaches for scaling up climate finance
The “biennial submissions on strategies and approaches for
scaling up climate finance to 2020” (or ‘submissions on
strategies and approaches’) 25 have been submitted by
developed country Parties since 2014 and provide information
on developed country Parties’ efforts to scale up finance along 5
thematic areas. This reporting process came about as a part of
the work programme on long-term finance (LTF) in 2013 and is
21
A compilation of financial information submitted through BRs from
Annex I Parties is available on the Biennial Reports Data Interface (BRDI) on the UNFCCC website.
22 The finance component of BURs for developing country Parties are
to contain “constraints and gaps, and related financial, technical and
capacity needs”. (UNFCCC, (2011, December) “Decision 2/CP.17
Outcome of the Ad Hoc Working Group on Long-term Cooperative
Action under the Convention”, Annex III, paragraph 2(d)).
23 UNFCCC. (n.d.). ICA International Consultation and Analysis.
Retrieved March 30, 2016, from
http://unfccc.int/national_reports/nonannex_i_parties/ica/items/8621.php
24 The technical review processes apply to Parties NCs and BRs/BURs.
Detailed information for this process can be found in the establishing
COP decision. See here: “Decision 20/CP. 19 Composition, modalities
and procedures of the team of technical experts under international
consultation and analysis”, Annex I, and “Decision 23/CP.19 Work
programme on the revision of the guidelines for the review of biennial
reports and national communications, including national inventory
reviews, for developed country Parties”, Annex.
25 Submitted biennial submissions on strategies and approaches are
available on the Submission Portal of the UNFCCC website. Search
“biennial submissions”, sort with filters: ‘body’ (COP) and ‘year’ (2014
intended to support developed country Parties’ demonstration
of a credible pathway to scaling up finance in the medium
term. 26 COP19 also decided that a biennial workshops and
biennial high-level ministerial dialogues would be conducted
through 2020 to discuss submissions related to issues on longterm finance. 27 The reporting guidelines for the 2013 COP
decision states:
“[The COP] [r]equests developed country Parties to prepare
biennial submissions on their updated strategies and approaches
for scaling up climate finance from 2014 to 2020, including any
available information on quantitative and qualitative elements of
a pathway, on the following:
(a) Information to increase clarity on the expected levels of
climate finance mobilized from different sources;
(b) Information on their policies, programmes and priorities;
(c) Information on actions and plans to mobilize additional
finance;
(d) Information on how Parties are ensuring the balance
between adaptation and mitigation, in particular the needs
of developing countries that are particularly vulnerable to
the adverse effects of climate change;
(e) Information on steps taken to enhance their enabling
environments, following on from the report of the co-chairs
of the extended work programme on long-term finance;” 28
The first round of submissions on strategies and approaches
were submitted in late-2014, the majority of which were
& 2016). Submissions on strategies and approaches were submitted
between September 2014 and December 2014. Submissions ranged
from 3 to 25 pages in length with an average of 6 pages (note:
Australia, Austria, Greece, Iceland, and Luxembourg did not submit a
report).
26 A key finding of the work programme on long-term finance (LTF) is
that “constraints imposed by budgetary practices, rules and laws in
relation to public finances” are important issues for providing greater
predictability and assurance around advancing a pathway to mobilize
climate finance by 2020. (UNFCCC. “Report on the outcomes of the
extended work programme on long-term finance, Note by the cochairs”.)
27 Decision 3/CP.19. A summary of the workshop on long-term finance
at COP20 is available here, and a summary of the biennial high-level
ministerial dialogue at COP20 is available here. A compilation and
synthesis report of the biennial submissions on the strategies and
approaches, prepared by the secretariat for COP21, is available here.
Also see: UNFCCC. “Long-term Climate Finance”.
28 UNFCCC. “Decision 3/CP.19 Long-term climate finance”, paragraph
10.
7
received prior to the start of COP 20 where the first biennial
workshop and high-level ministerial dialogue discussed the
information provided in the submissions. 29 In response to those
discussions, the 2014 COP decision states:
“[The COP [r]equests developed country Parties, in preparing their
next round of updated biennial submissions on strategies and
approaches for scaling up climate finance for the period 2016–2020,
to enhance the available quantitative and qualitative elements of a
pathway, placing greater emphasis on transparency and
predictability of financial flows, as per decision 3/CP.19, paragraph
10;” (emphasis added) 30
The request for developed country Parties to provide
information on quantitative and qualitative elements of a
pathway to scale up climate finance appears to position this
reporting process towards the provision of ex-ante information,
relative to the NCs and BRs. This unique characteristic was then
furthered clarified in 2014 when the COP requested that those
Parties “place[e] greater emphasis on transparency and
predictability of financial flows” in their 2016 submissions. An
assessment of the quality of information provided in the 2014
submissions on strategies and approaches is provided in Section
4 in order to identify the types of ex-ante information that
developed country Parties already provide, and therefore could
provide in the ex-ante reporting mandate of the Paris
Agreement.
3.4. Reporting processes to be developed under the
Paris Agreement
The Paris Agreement establishes two distinct processes for
reporting climate finance - an ex-post reporting process and an
ex-ante reporting process - both of which are to be developed in
the 2016 to 2020 period prior to entry into force of the Paris
Agreement.31
29
A summary of the workshop on long-term finance at COP20 is
available here, and a summary of the biennial high-level ministerial
dialogue at COP20 is available here. A compilation and synthesis
report of the biennial submissions on the strategies and approaches,
prepared by the secretariat for COP21, is available here.
30 UNFCCC. (2014) “Decision 5/CP.20 Long-term climate finance”,
paragraph 10.
31 UNFCCC. (2015) “Decision 1/CP.21 Adoption of the Paris
Agreement”.
32 Paragraph 98 of 1/CP.21 states that the COP “decides that the
modalities, procedures and guidelines of this transparency framework
The ex-post reporting process is a “transparency framework for
action and support” (Article 13.1) which is to provide clarity on
support provided and received with regards to climate finance
and provides a full overview of aggregate financial support
provided by “relevant individual Parties” (Article 13.6).
Developed country Parties are required to provide information
on support for developing country Parties provided and
mobilized through public interventions biennially (Article 9.7
and 13.9). Those biennial submissions will undergo a technical
expert review (Article 13.11). Developing country Parties are to
also submit information but are subject to different reporting
requirements under a reporting process called the Biennial
Update Reports (BURs). Notably, this reporting framework is
stated to “build on and enhance”, and “eventually supersede”,
the existing transparency arrangements under the Convention –
specifically the BRs, the BURs, and their respective technical
review processes (1/CP.21, para 98; and Article 13.3).32
The ex-ante reporting mandate, which is the focus on this report,
states that “developed country Parties shall biennially
communicate indicative quantitative and qualitative
information [...] as applicable, including, as available, projected
levels of public financial resources to be provided to developing
country Parties” (Article 9.5). To develop the guidelines for this
reporting requirement, the Parties will “initiate, at [COP 22], a
process to identify the information to be provided by Parties”
(1/CP.21, para 55).
The brevity of this ex-ante mandate is notable for a few key
reasons. First, the mandate for the post-2016 process was left
open at COP21, with it unspecified which body under the
Convention will conduct the process and undefined what such a
process is to entail beyond simply “providing recommendations
for consideration and adoption by [the CMA]”. The process to
identify what information should be provided will need to be
decided at UNFCCC sessions in 2016. Further, the mandate does
not explicitly refer to any current reporting process in place,
shall build upon and eventually supersede the measurement,
reporting and verification system established by decision 1/CP.16,
paragraphs 40–47 and 60–64, and decision 2/CP.17, paragraphs 12–
62, immediately following the submission of the final biennial reports
and biennial update reports”. The 1/CP.16 decision refers to the
establishment of the Biennial Reports and Biennial Update Reports.
The 2/CP.17 decision refers to the adoption of detailed guidelines on
the preparation of BRs and BURs.
8
Figure 3 – Overview timeline of existing and future mechanisms for reporting climate finance under the UNFCCC
whereas, in contrast, the ex-post reporting process is quite
explicit in its request for the Ad Hoc Working Group on the Paris
Agreement (APA) to “develop recommendations for modalities,
procedures, and guidelines” (1/CP.21, para 91), and its decision
for the post-2020 framework to “eventually supersede” the
current BR and BUR processes. Notably, the COP21 outcome is
quiet as to whether the ex-ante reporting process will be created
anew or build on any existing processes.
Nevertheless, the 2014 submissions on strategies and
approaches do already provide some limited ex-ante
information on future provisions of climate finance by
developed country Parties. Section 4 discusses the evident
linkages between these two reporting processes and assesses
how the information currently being provided in the biennial
submissions might serve as a useful starting point to identify
what type of information developed countries could provide in
the post-2020 period.
Figure 3 provides an overview of the timeline of existing and
future mechanisms for reporting climate finance under the
UNFCCC. The right end of a reporting cycle represents the due
date of that report. For example, the sixth National
Communications (NC6) were due on 1 January 2014. This
timeline assumes that the Paris Agreement enters into force in
2020 and its transparency framework begins after the next
rounds of reports are submitted (See Section 3.4: the BR and
BUR processes are to be ‘superseded’ by the ex-post and ex-ante
reporting processes under the Paris Agreement).
9
4. Assessment of the information provided in
the biennial submissions on strategies and
approaches for scaling up climate finance
This section explores how much upfront information developed
country Parties give on future provision of climate finance
through assessing the quality of information supplied through
the ‘submissions on strategies and approaches’. As discussed in
Section 3, Parties already provide some forward looking
information on climate finance under the UNFCCC in this
reporting process. This assessment therefore seeks to examine
how the information provided through this process might serve
as a useful starting point to identify what type of information
developed countries could provide in the post-2020 period.
The following subsection provides general and cross-cutting
observations. The subsequent subsections are organized to
parallel the five thematic areas as outlined in the reporting
mandate of the biennial submissions on strategies and
approaches: information on expected levels of climate finance;
policies, programmes, and priorities; actions and plans to
mobilize additional finance; ensuring a balance between
adaptation and mitigation; and steps taken to enhance enabling
environments (see Section 3.3 for overview of the reporting
mandate). Each thematic subsection qualifies the type and
format of information provided by Parties, suggests how such
reporting might be improved, and highlights notable best
practices, and lack thereof, in the provision of such information
by specific Parties.
4.1. General and Cross-cutting Observations
Currently, the biennial submissions on strategies and
approaches only provide some utility in communicating
“information on quantitative and qualitative elements of a
pathway” to scaling up climate finance to 2020, as is requested
by the 2013 COP decision that established the reporting process.
The information in the 2014 submissions varies between Parties
in terms consistency in type, level of detail, structure of the
information provided. Submissions ranged from 3 to 25 pages in
length with an average of just 6 pages, in contrast to the recent
33
Of the 24 Annex II Parties, 4 Parties did not submit reports
(Australia, Greece, Iceland, and Luxembourg).
34 For comparison of guidelines for finance reporting requirements
under the UNFCCC, see section 9.1 of the annex which provides an
overview of the reporting requirements of National Communications
NCs and BRs which averaged 310 and 108 pages respectively. 33
Of the 20 Parties that did submit reports, only 1 Party structured
their report in the same thematic order as the subparagraphs in
the COP decision requesting the submissions. Whereas 13
Parties, all European, structured their submission by combining
information on policies, programmes, priorities, and information
on actions and plans to mobilize additional finance. The other 6
Parties did not structure the submission using the defined
thematic areas. Table 2Error! Reference source not found.
provides a summary of key meta-data on Annex II Parties’
submissions on strategies and approaches for scaling up climate
finance to 2020.
In terms of type of information included in the submissions,
Parties largely provided qualitative information. Quantitative
information, when included, was predominantly climate finance
provided in past years. However, some Parties did provide clear
indications of future financial flows. Qualitative information in
the submissions largely took the form of examples of national
policies or agency-level strategies. Submissions substantially
lacked, however, in quantitative elements and most developed
country Parties did not provide a clear forward spending plan.
For example, with regards to sources of finance, many Parties
emphasized the intention to draw on a variety of sources but
provided limited information on actual scale of finance,
instruments, channels pursued, and access modalities that
would be utilized. This was particularly evident with regards
Parties’ stated intention to leverage private finance: Parties
emphasized the important role of private finance and gave
examples of previous actions taken, but provided almost no
information for how and at what scale such finance would be
mobilized in the future.
The above-mentioned issues on the inconsistent structure and
quality and quantity of information in the submissions may be
due, in part, to a lack of specificity in the reporting guidelines,
which are substantially less detailed than other reporting
processes under the Convention, namely the NCs and BRs. 34 The
fact that COP20 modified the original COP19 reporting mandate
indicates a few important considerations about the potential
future of the biennial submissions when the decision requested
(NCs), Biennial Reports (BRs), Strategies and Approaches, and the
forthcoming reporting processes under the Paris Agreement. In
particular, see the footnoted references within section 9 to review the
detailed guidelines for NCs and BRs.
10
Table 2 – Summary of key meta-data on Annex II Parties’ submissions on strategies and approaches for scaling
up climate finance to 2020
Annex II Party
Number of
pages
Did the organization of the document follow the five
sub-paragraphs of the mandate in 3/CP.19?
Yes, but combined “policies,
No, used its
Yes priorities and programmes”
own headings
with “actions and plans”
Australia
Austria
No submission
6
Belgium
Canada
Denmark
3
5
6
X
16
4
3
8
No submission
No submission
7
4
X
X
X
X
European Union
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
X
Included tables or
figures with
quantitative data?
Yes, previous
contributions only
No
X
X
Yes, previous
contributions only
No
No
No
No
X
X
3
X
Luxembourg
Netherlands
No submission
4
New Zealand
Norway
Portugal
6
17
4
X
X
Spain
Sweden
3
5
X
X
Switzerland
United Kingdom
United States
3
5
25
X
X
X
X
X
No
Yes, previous
contributions only
Yes, previous
contributions only
Yes, previous
contributions only
No
No
Yes, previous
contributions only
No
Yes, previous
contributions only
No
No
Yes, previous
contributions only
11
that Parties “[place] greater emphasis on transparency and
predictability of financial flows”. First, there is precedent that
future COPs may continue to further modify and elaborate on
this relatively new reporting process, and second, that the
submissions may be increasingly looked to by Parties to improve
the ‘transparency and predictability’ flows in terms of the
provision of ex-ante information during the pre-2020 period.
It is also worth noting that the language used in the mandate for
the submissions on strategies and approaches (from COP19 and
20) is quite similar to the ex-ante reporting mandate of the Paris
Agreement (see Table 3). This similarity suggests that there may
be an important link for negotiators to consider in developing
guidelines for reporting under Article 9.5 of the Paris Agreement
and in its work to identify the information that could be
provided.
These observations are important because the transparency
framework of the Paris Agreement is to “build on the
transparency arrangements under the Convention” (Article
13.3). This provision would suggest that one approach Parties
might use to develop guidelines for post-2020 ex-ante reporting
mandate under the Paris Agreement to further modify the
strategies and approaches reporting mandate to test types of
information that might be useful. This would also allow for
Parties to more seamlessly transition to post-2020 reporting
framework and minimize challenges with the transition period.
Lastly, from a legal or political perspective, COP decisions to
incrementally modify existing decisions during the 2016 to 2020
period would also likely be easier and less controversial than
negotiating a wholly new mechanism to be adopted from 2020.
4.2. Information to increase clarity on the expected
levels of climate finance
Developed country Parties provided information in their 2014
Strategies and Approaches submissions intended to increase
clarity on the expected levels of climate finance mobilized from
different sources to 2020. This type of information is particularly
helpful in that it can help encourage planning and
implementation of low-emission development strategies and
national adaptation plans by recipient country Parties. 35
Most Parties provided various examples of information on their
past or current provision of climate finance. This information
Table 3 – Comparison of the language used in the provisions of the submissions on strategies and approaches, and the ex-ante
finance reporting mandate of the Paris Agreement
(identical phrasing is underlined for comparison)
Submissions on strategies and approaches for scaling up
climate finance to 2020
3/CP.19, para 10: “Requests developed country Parties to
prepare biennial submissions on their updated strategies and
approaches for scaling up climate finance from 2014 to 2020,
including any available information on quantitative and
qualitative elements of a pathway, on the following:[...]”
(emphasis added)
5/CP.20, para 10: “Requests developed country Parties, in
preparing their next round of updated biennial submissions on
strategies and approaches for scaling up climate finance for the
period 2016–2020, to enhance the available quantitative and
qualitative elements of a pathway, placing greater emphasis on
transparency and predictability of financial flows, as per decision
3/CP.19, paragraph 10;” (emphasis added)
35
Some participants of the COP 20 finance workshop were of the view
that “information on expected levels of climate finance should be
informed by the factors underlying climate finance trends in the past
and the current levels of support [and]...if used to define future
Ex-ante reporting mandate of the Paris Agreement
Article 9.5: “Developed country Parties shall biennially
communicate indicative quantitative and qualitative
information related to paragraphs 1 and 3 of this Article, as
applicable, including, as available, projected levels of public
financial resources to be provided to developing country Parties.
Other Parties providing resources are encouraged to
communicate biennially such information on a voluntary basis.”
(emphasis added)
projections, could enhance transparency and increase the
predictability of future climate finance and hence encourage the
planning and implementation of low-emission development strategies
and national adaptation plans in developing countries.”
12
was generally provided in a quantitative form, such as
contributions made to multilateral funds, project-based
investments, etc. Although this information is helpful in some
regards, helping contextualize or illustrate the actions Parties
have taken, it is not always linked to clear messages of how
previous provision may relate to future provision of financial
support. Without the inclusion of statements on how, and on
what scale, such actions might take place in the future, it does
not improve predictability of future finance. This type of
information should be included in ex-post reporting processes
under the Convention but such information itself does not add
value unless the information is both novel and provided in the
interim between BRs. Because this information does not provide
direct clarity of a pathway to scale up finance, no
recommendations are presented for improving the provision of
this type of information. A few examples from the 2014
submissions on strategies and approaches:
 New Zealand was one of the countries to offer a clear
quantitative commitment on finance by stating that: “New
Zealand will now invest more than NZ$100 million on clean
energy projects in seven countries in the Pacific and further
afield in the Caribbean and Indian Ocean over the next
three years”.
 Switzerland pledged USD 100 million to the Green Climate
Fund (GCF) as part of the Initial Resource Mobilization
process to be disbursed over three years from 2015 to 2017
 Japan informed that to achieve the goal of mobilizing
jointly $ 100 billion annually from developed countries by
2020, it is essential to scale up private finance substantially
and that they will make the best possible use of its
development financial institutions and export credit
agencies. In particular co-financing equity participation and
guarantee facility by the Japan Bank for International
Cooperation (JBIC) and insurance by the Nippon Export
Investment Insurance (NEXI).
Parties also reiterated the collective goal to mobilize USD 100
billion per year by 2020, and reiterated current pledges or
previous commitments to the GCF for this purpose. Little or no
information was provided on how developed country Parties will
cooperate to share the financial burden for reaching this target.
Because there has not yet been a formal process established to
capture and track pledges under the Convention, it’s difficult to
36
Notably, this type of effort has happened recently, such as through
the secretariat’s work to aggregate climate funding announcements in
2015 in the lead up to COP21, available here with an interactive
assess if Parties did re-communicate their pledges for future
climate finance in the biennial submissions. If this was done, a
single entity such the secretariat or Standing Committee on
Finance (SCF) could regularly aggregate the reported indicative
information through a centralized process. 36 This would
additionally open up the possibility to analyze the information
to provide clarity on specific subsets of climate finance, such as
by sector, region, income level of recipient countries, whether
intended for mitigation or adaptation, etc. A few examples from
the 2014 submissions on strategies and approaches:
 United States announced its intention to contribute with
$3 billion to the Green Climate Fund’s initial capitalization,
with a significant portion aimed at supporting the Private
Sector Facility.
Few Parties stated expected levels of climate finance to be
provided for either the following year or subsequent years.
Although many Parties did reiterate details on their current or
previous provisions of climate finance, few included quantitative
forward spending plans for public finance. This information in
the 2014 submissions could be limited, for example, because
developed country Parties do not want to create the perception
that quantitative ex-ante information could be interpreted by
other Parties as a commitment to provide such finance.
Nevertheless, this type of information is particularly helpful in
providing clarity on the pathway to scaling up climate finance.
To improve the inclusion of such information by Parties in future
submissions, modified reporting guidelines could help specify
the types of future quantitative and indicative information on
public finance based on lessons learned from previous rounds of
submissions.
A more qualitative form of information on future levels of
climate finance that some Parties provided is in the form of
information referencing possible future levels of climate finance.
For example, a number of Parties expressed intentions or
objectives for the provision of future finance to follow a trend
(as either remaining at current levels or increasing from a
baseline), or through policies established to set climate finance
as a proportion of total international assistance. Although this
information is generally qualitative in nature, such information
clearly contains quantifiable implications for future climate
finance and could be useful to include in future submissions in
cases where Parties’ national budgets may provide limited
graphic. However this type of activity has not been formally integrated
into Convention’s process of tracking future climate finance.
13
indicative information. These types of qualifiers of future funds
might also be applied to thematic areas, channels, etc, rather
than simply the aggregate level of overall climate finance
provided by a Party.
Most Parties also reiterated various quantitative pledges they
have made to climate finance under the Convention, and
particularly to the GCF and GEF. Little information on pledges for
climate finance, however, was provided beyond these specific
examples, and it’s unclear, and perhaps unlikely, that the
pledges included in these submissions were exhaustive of the
number of pledges Parties had made under the Convention at
the time of submission in 2014. Often Parties make pledges in
the indicative spending plans, thematic goals, regional targets,
or other forms and it remains very unclear how pledges made in
one forum, such as a simple aggregate pledge made to the GCF,
relate to pledges made in other forum, such as statements made
on increasing finance for thematic areas (such as adaptation
funding). It’s often left unclear to both observers and other
Parties what information does not appear to be double
counting. To improve reporting on this type of information,
Parties might again consider amending the guidelines to request
further clarification on the details of outstanding pledges made
under the Convention. A few examples from the 2014
submissions on strategies and approaches:
 In its submission, EU announced its plans to commit about
€1.7 billion of public grant funding to support climate
relevant activities in developing countries in the period of
2014-2015. EU also clarified that this pledge was the first
step to achieve the objective of committing at least 20% of
the EU's external assistance budget to climate relevant
actions during the period 2014- 2020.
 At the High-Level Pledging Conference in Berlin on
November 20th, Japan announced its intention to make a
contribution of up to $1.5 billion, or 15% of the total
contributions as of the end of COP20.
 Norway announces a contribution to the Green Climate
Fund of USD 129 million for the period 2015-2018.
The majority of Parties mentioned the need to improve the scale
and clarity of finance mobilized through the private sector and
alternative sources. Many also provided information on previous
levels of finance leveraged from these sources. Very few,
37
There is a substantial amount of ongoing research with regards to
methodological challenges in quantifying the extent public finance
leverages private sector finance. The reader may like to refer to OECD
however, clarified future-oriented information about the way
that these sources would be leveraged or at what scale such
sources could be leveraged -- neither qualitatively nor
quantitatively. Notably, however, most Parties appeared to
implicitly convey that finance from such sources may continue
into the future, but fell short of clarifying this in any detail. This
is unsurprising in light of the ongoing methodological debate
between Parties in how to define and track private finance,
particularly as it relates to public finance used to leverage such
funds. 37 If Parties can make methodological progress on this
issue, then more future-oriented information may be able to be
provided in subsequent submissions. Although these sources of
funding are not included in Parties budgetary processes, Parties
could communicate such information as a function of leveraged
public finance. A few examples from the 2014 submissions on
strategies and approaches:
 New Zealand informs that in the short term, climaterelated finance and investment from them to developing
countries will continue to have a focus on public finance
but outwards, foreign direct investment from New Zealand
flows mainly to their traditional trade and economic
partners.
 Switzerland is engaged in a series of private investment
initiatives such as: reducing greenhouse gas emissions
through official export insurance and financing
architecture; support and promotion of export and transfer
of low-carbon technologies and providing seed money and
technical advice for promising climate change initiatives.
In addition to information on Parties’ efforts to scale up their
own provision of finance, most Parties included suggestions,
expressed support, or shared experiences in working addressing
larger ongoing issues in the reporting, tracking, or scaling up of
climate finance. For example, such information included, inter
alia, progress on alternative sources, improvement in tracking of
leveraged private finance, and measures to curb emissions from
international aviation and maritime sectors. The provision of
such information could be useful for Parties to highlight ongoing
or emerging issues, if continued. Future submissions could also
address issues related to the how to improve the clarity and
predictability of climate finance in the submissions on strategies
and approaches in light of the predominantly qualitative
information provided in the 2014 submissions. If the submission
Research Collaborative on tracking private climate finance for further
research.
14
process is to serve as a potential predecessor or testing ground
for information that will be included in the ex-ante reporting
mandate of the Paris Agreement, Parties could be invited to
further experiment with the information that they provide on a
biennial basis. A few examples from the 2014 submissions on
strategies and approaches:
 Progress on alternative sources
 Improvement in tracking of leveraged private finance
 Measures to curb emissions from international aviation
and maritime sectors
4.3. Information on policies, programmes and
priorities
Developed country Parties provided information in their 2014
submissions on strategies and approaches on their policies,
programmes, and priorities for scaling up climate finance to
2020. Although largely qualitative in nature, this type of
information appears to be quite helpful in improving
transparency and predictability, and is particularly helpful if
quantitative information is unavailable due to constraints in
national processes.
All Parties included some level of information on their policies
and programmes related to the provision of climate finance. This
included information on various national and agency-level
policies, laws, strategies, and guiding principles to address issues
such as, most notably, the relationship between climate finance
and development assistance and the effectiveness of climate
finance. Programmatic examples of various measures
undertaken by Parties at the programme level to implement
support to developing country Parties such as government-togovernment cooperation and engagement of the private sector.
This information is helpful in providing clarity with how funds
may be used if and when funds are allocated to international
assistance, however it is not consistently clear how information
on policies programmes directly improves transparency and
predictability of future climate finance, particularly when such
information lacks sufficient context, such as how such climatecompatible goals are to be provided through broader
development cooperation financing (such as ODA) which has
more mature systems to track forward spending plans. When
38
An observation from the 2015 Compilation and Synthesis report
prepared by the secretariat was that “bilateral cooperation emerged
from the submissions as the delivery channel mostly used by the
majority of developed country Parties. Some developed country
such information is provided in conjunction with other
information, such as expected levels of future flows, it can give
a useful indication of the type of funding sources and institutions
or channels that may be used. A few examples from the 2014
submissions on strategies and approaches:
Many Parties also included various levels of information on their
priorities for providing climate finance. Types of priorities
ranged from geographical (providing finance to specified
regions), thematic, and in terms of how finance would be
channeled. Thematic priorities generally included intent to
support types of countries (e.g. most vulnerable) or whether
support is provided for mitigation or adaptation purposes, and
how Parties view seeking a balance between the two. Channel
priorities generally included views on how Parties viewed
support provided through bilateral versus multilateral means.38
Similar to information on Parties’ priorities, this information is
helpful in providing clarity with how funds may be used if and
when funds are allocated to international assistance. This type
of information primarily exists at the agency-level and tends to
have a multi-year character. Parties could provide more granular
information on priorities and the value of such information
would be enhanced substantially if it could be explicitly linked to
any indicative forward-spending plans. A few examples from the
2014 submissions on strategies and approaches:
 New Zealand deliver climate-related support through the
New Zealand Aid Programme, particularly to the small
island developing states in the Pacific.
 Norway informs that their climate finance is concentrated
in three main areas; REDD+, clean energy and climate
adaptation.
 Canada informs it has been actively engaged in supporting
disaster risk reduction projects through its Caribbean
Regional Development Programme.
4.4. Information on actions and plans to mobilize
additional finance
Developed country Parties provided information in their 2014
Strategies and Approaches submissions on their actions and
plans to mobilize additional finance to 2020. This information
generally took the form of illustrative examples of actions and
Parties, however, reported to have also used multilateral channels in
order to enhance the predictability of funding.”
15
plans Parties have taken in the recent past, but accompanying
information does not consistently provide an indication of how
such actions might continue to be carried out in the future. The
broad mandate of ‘actions and plans’ also lends itself to overlap
rather easily with the other aspects of the mandate.
All Parties described various examples of actions they have
taken and plans they have made to mobilize additional finance.
Very little information, however, was presented in a manner
that provided indications of how, and on what scale, such
actions would continue or be scaled up in the future. 39 In other
words, much of the information in the submissions on strategies
and approaches was largely ex-post oriented and lacked
specificity. Actions and plans included, inter alia, (1)
collaboration with stakeholders, (2) use of innovative financial
instruments, (3) approaches to leverage climate finance, (4)
efforts to support alternative sources.
The provision of specific ex-ante information to improve
transparency and predictability is overall quite limited given the
constrained nature of forward planning at the programme level
(e.g. ministry or agency level planning). Such information,
however, may be supportive when clearly linked and
contextualized within a larger policy framework. As a final note,
this reporting category was not always explicitly addressed in
Parties’ submissions. Rather, many submissions utilized other
conceptual frameworks to organize the information presented
which led to overlap and a lack of distinction, and complex
interlinkages, between the five categories. Parties may like to
clarify expectations information intended for this category is to
be distinction from the other four thematic areas. A few
examples from the 2014 submissions on strategies and
approaches:
 United States informs that it is using a range of public
financial instruments and interventions to mobilize climate
finance via a diverse set of bilateral and multilateral
channels including: grant-based technical assistance, risk
mitigation tools; and low-cost, long tenor debt financing.
 New Zealand intends to work with recipient countries on
political and regulatory risk that are significant barriers to
private investment.
39
Some participants of the COP20 finance workshop emphasized a
distinction between (2) “transparency of information on action and
plans”, seen in the context of ex-ante information to improve
4.5. Information on ensuring the balance between
adaptation and mitigation
Developed country Parties provided information in their 2014
Strategies and Approaches submissions on how they are
ensuring a balance between adaptation and mitigation to 2020.
Some insight on Parties’ views and priorities was gleaned,
however little information was provided in a form that would
allow for ex-ante quantification of either the national or global
balance between the two.
The majority of Parties expressed their views on how they strive
to improve the balance between adaptation and mitigation.
Information included views on, inter alia, (1) the relationship
between a global or national balance, (2) national strategies,
plans, and priorities, and (3) the roles of institutions and
channels, most notably the GCF. Overall, Parties provided a
variety of views for how such a balance should be pursued, and
some Parties clarified in some level of detail their national
priorities between the two objectives. Such information is
particularly helpful for informing ongoing discussions under the
UNFCCC for how such a balance may be defined -- whether it be
defined at the Convention level, defined globally or nationally as
an amount or ratio, or be driven by needs-based determinations
of recipient Parties. Parties should continue to elaborate on their
national or agency-level policies and views in future submissions
in order to improve the predictability of progress being made to
ensure the balance and additionally reference whether Parties’
strategies with regards to climate finance provided bilaterally or
multilaterally differs on this issue and why. A few examples from
the 2014 submissions on strategies and approaches:
 United States informs that its appropriated grant-based
assistance is categorized under the three thematic pillars:
Adaptation (increasing resilience to the impacts of climate
change), Clean Energy (reducing greenhouse gas emissions
from energy, industry, and transportation by greater
utilization of renewable energy, increased energy
efficiency, and other means); and Sustainable Landscapes
(reducing greenhouse gas emissions from forests and land
use).
predictability, and (2) “transparency of information on climate finance
provided”, seen in the context of ex-post information to improve
understanding of support provided.
16
4.6. Information on steps taken to enhance their
enabling environments
Developed country Parties provided information in their 2014
Strategies and Approaches submissions on steps taken to
enhance their enabling environments to 2020. The provision
examples of efforts taken is helpful in providing transparency of
Parties efforts to overcome barriers to climate investment.
Predictability, however, could be improved through increased
clarity on how such actions are contextualized within wider
policy objectives and how such actions will continue to be
carried out into the future.
 The majority of Parties provided examples of steps taken
to enhance enabling environments in developing
countries, while some Parties also highlighted efforts to
enhance them domestically. Such information included
examples of steps taken to improve national or
international policy, regulatory, and governance
frameworks to reduce investment barriers and support the
effective use of climate finance. Parties also highlighted
areas of barriers to investment and pointed to potential
means of addressing such barriers through, inter alia,
improved cooperation between countries, support for
readiness activities, and the strengthening of countryownership. Such information appears to be quite helpful
for sharing lessons learned, best practices, and
perspectives on overcoming ongoing challenges and
discussions under the Convention. In terms of improving
transparency and predictability, helpful when Parties
anecdotes of efforts were shared in the context of policies
that guide Parties overall efforts. Such contextual
information can assist other actors anticipate and plan for
the form and way in which climate finance is provided multilaterally and bilaterally. A few examples from the
2014 submissions on strategies and approaches:
 New Zealand presents The Pacific Energy Summit as a
tangible demonstration of how enabling environments can
effectively mobilize finance from different sources. The
Summit focused on a regional approach (Pacific small
island countries) to renewable energy and energy
efficiency. The Summit, which happened in 2013 and was
co-hosted by New Zealand and the European Union,
brought together the major aid and development partners
in the Pacific region and connected Pacific Island leaders
with finance and private-sector expertise to accelerate
their countries' energy plans. According to the New
Zealand report, donor coordination and private sector
engagement secured NZ$635 million over a three-year
period, and 18 months after the Summit more than 50
projects were under development.
 Canada highlights that capacity-building for governments
and institutions and support for the development of
financeable projects can be an effective use of climate
finance. Without providing details on how Canada can
leverage private climate finance for capacity-building,
Canada states that they should support and facilitate the
implementation of effective domestic policy environments
in developing countries as some policies, such as harmful
fossil fuel subsidies, can create disincentives for the private
sector to invest in low-emissions, climate resilient
development. On the other hand, Canada states that
transparent, predictable and credible climate–related
policies and enabling environments can create incentives
for climate-smart growth.
 An example provided by EU of enabling conditions is the EU
Emissions Trading Scheme that puts a positive price on
carbon emissions. According to their submission, parts of
the off-sets have been realized outside the EU, thus
contributing to enhancing the global enabling environment
and thereby to reducing global greenhouse gas emissions.
 United States reinforces its commitment to work with
development partners to identify complementary
solutions for addressing domestic investment barriers and
achieving their low-carbon, climate-resilient development
strategies.
17
5. Official development assistance, climate
finance and forward spending plans
As indicated by the previous section, the current UNFCCC
reporting process on scaling up climate finance only provides
some utility in communicating quantitative and qualitative
information on future climate finance flows. An analysis of
other, non-UNFCCC fora on general development assistance can
provide evidence of types of information already being shared
by donor countries that improves the predictability of future
flows of development assistance. Therefore, this section
assesses donor countries’ commitments in providing
information of indicative future spending plans within official
development assistance (ODA). ODA has been the global
standard for measuring donor efforts in supporting
development co-operation objectives 40 and, accounting,
reporting systems and methodologies for ODA have a far longer
history than for climate finance. Additionally, this section
attempts to address whether it is possible for the ex-ante
climate finance reporting system to replicate some of the efforts
made so far to enhance ODA predictability.
This assessment is important because, under the current
UNFCCC climate finance reporting system, the primary form of
aid transfer that Annex II Parties use to provide financing for
climate mitigation and adaptation is in the form of ODA.
5.1. Overview of how predictability evolved for
official development assistance
The discussion on predictability of climate finance is
comparatively new and has inherited elements and concerns
from the development assistance arena. Since 2003, developed
countries have committed to improve their capacity as donors
to provide more adequate and predictable information about
40
World Bank, (2013) Financing for Development Post-2015.
Retrieved April 15, 2016 from:
https://www.worldbank.org/content/dam/Worldbank/document/Pov
erty%20documents/WB-PREM%20financing-for-development-pub-1011-13web.pdf.
41 These were: The Rome Declaration on Harmonisation, Rome (2003)
– (See: http://www.oecd.org/dac/effectiveness/31451637.pdf); The
Paris Declaration on Aid Effectiveness, Paris (2005); the Accra Agenda
for Action, Accra (2008) – (See:
http://www.oecd.org/dac/effectiveness/34428351.pdf) and The
Busan Partnership for Effective Development Co-Operation, Busan
(2011) – (See: http://www.oecd.org/dac/effectiveness/49650173.pdf)
42 The European Union is not a member as a block but as individual
nations. For a complete list of OECD members see:
future aid provisions within the High-Level Fora on Aid
Effectiveness41 organized by the Organisation for Economic Cooperation and Development (OECD), of which all of the Annex II
Parties under the UNFCCC are party to as well. 42 Some of the
most recent discussions within these High-level fora have
included climate finance.
In the “Paris Declaration of 2005”, an outcome of the Second
High Level Forum on Aid Effectiveness (2005), OECD countries
agreed on setting measurable commitments and targets to be
achieved by 2011 and committed “to provide reliable indicative
commitments of aid over a multi-year framework and disburse
aid in a timely and predictable fashion according to agreed
schedules” (Article 26) 43 . The subsequent Accra Agenda for
Action in 2008 strengthened this commitment:
“Beginning now, donors will provide developing countries with
regular and timely information on their rolling three- to five-year
forward expenditure and/or implementation plans, with at least
indicative resource allocations that developing countries can
integrate in their medium-term planning and macroeconomic
frameworks” (Article 26)44.
In 2011, OECD countries and international institutions came
together in Korea for the Fourth High Level Forum on Aid
Effectiveness, where they established the Busan Partnership for
Effective Development Co-Operation 45 . This agreement was
built up from decisions and lessons-learned from the previous
High Level Fora (Rome 2003, Paris 2005 and Accra 2008). Article
24 in the Busan Partnership states:
“We will also work to make development co-operation more
predictable in its nature. Those of us who committed, through the
Accra Agenda for Action, to improve medium-term predictability
will implement fully our commitments in this area, introducing
reforms where needed.”
The 2011 Busan Partnership did more than just reaffirm donor
countries’ development aid commitments and to take action to
http://www.oecd.org/about/membersandpartners/list-oecd-membercountries.htm
43 Paris Declaration on Aid Effectiveness (2005) - 2 March 2005 DCD/DAC/EFF (2005) 1/FINAL. Retrieved March 2, 2016 from:
http://acts.oecd.org/Instruments/ShowInstrumentView.aspx?Instrum
entID=141&Lang=en.
44 Paris Declaration on Aid Effectiveness (2005) and The Accra Agenda
for Action (2008). Retrieved March 6, 2016 from:
http://www.oecd.org/dac/effectiveness/34428351.pdf.
45 Busan Partnership for Effective Development Co-Operation Fourth
High Level Forum on Aid Effectiveness, Busan, Republic Of Korea, 29
November-1 December 2011. Retrieved March 14, 2016 from:
http://www.oecd.org/dac/effectiveness/49650173.pdf.
18
facilitate, leverage and strengthen the impact of finance to
support sustainable development, including climate change
finance. The agreement endorsed countries’ commitment to
“implement a common, open standard for electronic publication
of timely, comprehensive and forward-looking information on
resources provided through development co-operation” (Article
23(c)). The Busan Partnership contains a chapter on climate
change finance which states the following in its Article 34:
“Global climate change finance is expected to increase
substantially in the medium term. Recognising that this resource
flow brings with it new opportunities and challenges, we will
endeavour to promote coherence, transparency and
predictability across our approaches for effective climate finance
and broader development co-operation, including to: a) Continue
to support national climate change policy and planning as an
integral part of developing countries’ overall national
development plans, and ensure that – where appropriate – these
measures are financed, delivered and monitored through
developing countries’ systems in a transparent manner. b)
Continue to share lessons learned in development effectiveness
with those entities engaged in climate activities and ensure that
broader development co-operation is also informed by
innovations in climate finance.”
In fact, during the Busan forum, public climate finance was
signaled as a priority for effective international development,
leading to the creation of the Partnership for Climate Finance
and Development. 46 This initiative brings together the
international development co-operation and climate change
communities for a few purposes: to apply lessons from
development co-operation to the use of climate finance, to
support diverse actors in climate-related development co46
OECD (2014), “Partnership for Climate Finance and Development”.
See: http://www.oecd.org/dac/environment-development/climatepartnership.htm
47 For a definition of what consists Official Development Aid see OEDC
2008 “Is it ODA?” - Factsheet Retrieved April 28, 2016 from:
https://www.oecd.org/dac/stats/34086975.pdf, and for details on the
information provided see: OECD - International Development Statistics
(IDS) online databases at
http://www.oecd.org/dac/stats/idsonline.htm
48 Nakhooda, S.; Fransen, T.; Kuramochi, T.; Caravani A., Prizzon, A.;
Shimizu, N.; Tilley, H.; Halimanjaya, A. and Welham, B. (2015)
Mobilizing International Climate, Lessons from the Fast-Start Finance
Period, Open Climate Network, revised edition. Retrieved March 23,
2016 from:
http://www.wri.org/sites/default/files/mobilising_international_clima
te_finance_final_0.pdf.
operation and to have them work together and learn from each
other in an environment that is external to the climate change
negotiations.
As seen in Section 4 of this report, Parties to the UNFCCC report
climate finance at various levels of detail and the information
provided varies substantially in terms of consistency, in type and
structure. Compared with the High Level Fora on Aid
Effectiveness requirements to report future spending plans for
ODA 47 , information provided on climate finance under the
UNFCCC generally contains less detail on specific projects (some
data is reported only at the aggregate level), on disbursements
(as opposed to commitments), on instrumentality and financing
terms, and on recipients and implementing channels. The
majority of Annex II Parties report that climate finance comes
from their budgets for development assistance, a fact that can
be observed from a brief analysis of examples from the NCs and
BRs.
On the Second Biennial Reports (covering years 2013 and 2014),
all countries indicated ODA grants as the “funding source” for
the large majority of the funds reported, some countries also
reported funds coming from “other official flows” besides ODA.
An estimated 80% of climate finance reported for fast start
financing period of 2010-2012 was in the form of ODA,48 and was
identified by “Rio Markers”,49 where donors indicate whether a
project has a “principal” or “significant” objective of climate
mitigation, adaptation, or both.50
diversity and desertification. The Rio Markers comprise of a scoring
system of three values in which development co-operation activities
are “marked” as targeting the Rio Conventions themes as the
“principal" objective or a “significant" objective, or as not targeting
the objective. The Rio markers are applicable to Official Development
Assistance (ODA) and recently also to other official flows (OOF) (nonconcessional developmental flows, excluding export credits) starting
from 2010. The climate change theme was developed in collaboration
with the UNFCCC Secretariat and captures information on every aid
activity that targets climate change mitigation (since 1998) and climate
change adaptation (since 2010). Reporting on the Rio markers is
systematic and comprehensive across all DAC member governments
for ODA.
50
Kharas, H. (2015) Aid and Climate Finance. Global Economy and
Development, Brookings Institution. Retrieved March 17, 2016 from:
http://www.brookings.edu/~/media/Research/Files/Reports/2015/11/
16-paris-climate-talks/aid-climate-finance-kharas.pdf?la=en.
49
The Rio Markers methodology was developed to track the themes
covered by the 1992 Rio Conventions, climate change, biological
19
Taking some European countries and the European Union as
examples, the second BRs clearly express how Parties define the
relationship of climate finance and development assistance:
 The European Union’s 2016 BR mentions that development
and climate finance, both for adaptation and mitigation,
are intrinsically linked and that achieving synergies
between ODA, other official flows and climate finance will
be crucial for EU.
 Germany stated in their 2016 BR that, in implementing its
policies, the government takes guidance both from the
resolutions of the Parties to the UNFCCC and from the
principles of the Paris/Accra/Busan Agenda to increase aid
effectiveness, which include ownership by the partner
countries, supporting and using the partner institutions,
national programmes, strategies and procedures,
coordination among donors, results orientation and
mutual accountability on the part of partners and donors.
For Germany, climate change mitigation and adaptation
are important cross-cutting issues in development
cooperation and are therefore taken into consideration in
all bilateral development cooperation projects. In terms of
climate finance from budgetary sources, for Germany,
climate finance provided from the public budget is
recorded in this category.
 Norway, in its BR, reinforced its commitment to increase
the climate relevant share of its ODA and, recognizes the
inter-linkages between climate change and development.
UK states the need to integrate climate and development
finance. By recognizing that climate change is a threat to
achieving the goal to eradicate poverty, their report
justifies why climate finance forms a part of their ODA.
France stated in its BR that it provides financial aid and
technological cooperation through a number of bilateral
and multilateral channels, particularly through
development aid. France’s development aid is delivered
primarily through the French Development Agency (AFD),
as well as other institutions. AFD has a “climate51
The OECD Development Assistance Committee became part of the
OECD by Ministerial Resolution on 23 July 1961. It is a unique
international forum of many of the largest funders of aid, including 29
DAC Members. The World Bank, IMF and UNDP participate as
observers. For a complete list of all the OECD-DAC members see:
http://www.oecd.org/dac/dacmembers.htm
52 See the Global Aid Outlook statistics on Country Programmmable
Aid (CPA) at
http://www.oecd.org/development/effectiveness/aidpredictability.ht
m
development” action plan for 2012-2016, based on three
pillars: a set of quantified annual “climate” targets (50% of
its activity in developing countries, and 30% for Proparco,
its private sector subsidiary); a systematic climate impact
assessment system for all projects that it funds; and a
selection policy based on climate impact.
 Outside of the EU, Australia’s climate support is also largely
drawn from its development assistance program.
Recognizing the long-term importance of incorporating
climate considerations into development assistance more
broadly, Australia began mainstreaming climate support
through its aid programme at the end of the fast-start
finance period (2010-2012), while also maintaining
climate-specific budget measures.
5.2. Providing ex-ante information for ODA and
implications for climate finance
Existing tracking processes of ODA may provide relevant insights
for future improvement to enhance the predictability of climate
finance reporting. The OECD DAC51 conducts an annual Survey
on Donors’ Forward Spending Plans,52 with DAC members and
the largest 23 multilateral agencies in order to track the
commitments of the High Level Fora on Aid Effectiveness and to
help efforts toward greater predictability and better assessment
of future aid delivery. The survey, implemented in 2007, focuses
on Country Programmable Aid (CPA)53, which is a core subset of
ODA, and brings together most bilateral and multilateral aid
spending plans for up to three years. The Survey requests DAC
member countries’ information on: how does the country plan
development activities at operational level, the country current
availability of forward information in the country’s agencies
level and an description of operational practices in providing
53
According to the OECD, Country programmable aid (CPA) is defined
as “the portion of aid that providers can programme for individual
countries or regions, and over which partner countries could have a
significant say. Developed in 2007, CPA is a closer proxy of aid that
goes to partner countries than the concept of official development
assistance (ODA)”. For statistics on CPA see:
http://www.oecd.org/dac/aid-architecture/cpa.htm
20
partner countries with indicative information on future
development expenditures. 54
broader definition including some or all of the finance toward
any development project that includes climate benefits. 57
A report prepared by DAC, titled “The Global Outlook on Aid”,
builds on the annual DAC Survey on Donors’ Forward Spending
Plans and examines the issues of aid predictability, aid providers’
policies and procedures and the progress and obstacles in
achieving commitments. In the 2014 edition of the Survey55 it is
reported an attempt to collect information on future financing
towards, inter alia, climate change mitigation and adaptation.
The report states that the task proved to be difficult as only a
small number of donor countries could provide this information.
According to the report, of all the countries surveyed by the
OECD, a total of 19 were able to report global or regional
estimates by sector for at least one year ahead, representing
only one-third of the total number of countries surveyed.
From this brief analysis above, it is not clear how Annex II Parties
identify a specific financial flow as being “climate finance” or if
the country considers all its provisions for climate as part of its
development assistance. While on the one hand, it is desirable
and there are many positive aspects of the synergy between
climate actions and development support,58 on the other hand,
the mainstreaming of climate into development projects will
make earmarking climate finance more difficult, as the
distinction between the two becomes less clear. Tagging climate
finance is important for enabling the tracking of financial flows
and for enhancing the transparency and predictability for
developing countries to make effective, long-term plans to
achieve the objective of the Convention.59
5.3. Climate finance earmarking
Specifying what corresponds to climate finance from within ODA
in general is a challenge inherent in all climate finance
monitoring efforts, whether by a country donor or by a
recipient. 56 Countries and funding institutions may have
different definitions and approaches to what constitutes climate
finance and this variation in methodologies has direct impact on
how it is measured. Some countries use a narrower definition of
climate finance including finance that supports specific climate
activities, but excludes activities in which climate considerations
are mainstreamed into traditional development assistance
through a “climate-proofing” process. Other countries use a
54
See the statistics provided by the OECD for the Survey on Donors
Forward Spending Plans at:
https://stats.oecd.org/Index.aspx?DataSetCode=FSS
55 OECD. (2014). 2014 Global Outlook on Aid: Results of the 2014 DAC
Survey on Donors’ Forward Spending Plans and Prospects for
Improving Aid Predictabilities, 1–127.
56 Tirpak, D.; Brown L., and Ronquillo-Ballesteros, A. (2014) Monitoring
Climate Finance in Developing Countries: Challenges and Next Steps.
Working Paper. Washington, DC: World Resources Institute. Retrieved
March 19, 2016 from http://www.wri.org/publication/monitoringclimate-finance-developing-countries-challengesand-next-steps
57 Falconer, A. and Stadelmann M. (2014) What is climate finance?
Definitions to improve tracking and scale up climate finance. A Climate
Policy Initiative (CPI) Brief. Retrieved from:
http://climatepolicyinitiative.org/wpcontent/uploads/2014/09/Climate-Finance-Brief-Definitions-toImprove-Tracking-and-Scale-Up.pdf
While the UNFCCC does not define or establish a criteria for
climate finance, there are a few proposed methodologies being
systematically applied to earmarking climate finance such as the
“Rio Markers” and the “Common Principles for Climate
Mitigation Finance Tracking” 60 methodology.
The “Rio Markers”, mentioned in section 5.1, is the methodology
adopted by many OECD countries to track the themes of the Rio
Conventions including climate change. It was developed through
collaboration between the OECD Development Assistance
Committee (DAC) and the UNFCCC Secretariat and it captures
information on every aid activity that targets climate change
mitigation (since 1998) and climate change adaptation (since
2010). Reporting on the Rio Markers is systematic and
comprehensive across all DAC member governments for official
development assistance.61
58
UNDP-UNEP Poverty-Environment Initiative (2011) Mainstreaming
Climate Change Adaptation into Development Planning: A Guide for
Practitioners. Environment for the MDGs. Retrieved March 9, 2016
from: http://www.unep.org/pdf/mainstreaming-cc-adaptationweb.pdf.
59 World Bank (2015) Common Principles for Climate Mitigation
Finance Tracking. Version 2 – 15th June 2015. Retrieved April 23, 2016,
from:
http://www.worldbank.org/content/dam/Worldbank/document/Clim
ate/MDB%20IDFC%20Mitigation%20Finance%20Tracking%20Common
%20Principles%20-%20V2%2015062015.pdf.
60 World Bank (2015).
61 The members of the Development Assistance Committee (DAC) are
Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Japan, Korea, Luxembourg, the
Netherlands, New Zealand, Norway, Portugal, Spain, Sweden,
21
Another system for reporting climate finance is the “Common
Principles for Climate Mitigation Finance Tracking”, developed
by the joint climate finance group of multilateral development
banks (MDBs)62 and the International Development Finance Club
(IDFC), 63 based on their experience on the topic and with the
intention to be shared with other institutions that are looking for
common approaches for tracking and reporting. The “Principles”
consist of a set of common definitions and guidelines including
the list of activities reflect the approach that both groups (MDBs
and IDFC) have been following for tracking climate change
mitigation activities for the past 4 years, and are based on the
application of harmonized terms.
The use of climate earmarking methodologies might not be free
of limitations. For example, according to some authors64,65, 66,
tracking climate finance with different markers and indicators
may produce very distinct accounting. While each MDB has its
own sector classification system, the OECD DAC requires its
members to report using common and fairly detailed sector
codes. It is unclear how countries use indicators for climate
finance in the case of projects that have multiple objectives. The
use of indicators is also challenging for cross-sectoral projects
that include climate-related benefits, but do not primarily focus
on climate (for example, projects in the health or agriculture
sectors that include an element of integrating climate resilience,
but not as a primary objective). The accurate use of these
indicators also depends on the context and intent behind the
projects. For example developing precise indicators for
adaptation finance can be difficult, since many projects that
enhance adaptive capacity or resilience to climate impacts cobenefits development projects that account for potential
climate change impacts in their design.67 There might be even
other influences on climate finance coding beyond its technical
limitations. An exploratory testing evaluation of the OECD-DAC
Rio Markers methodology show, for example, that discrepancies
in climate earmarking of aid projects reported by DAC might be
Switzerland, the United Kingdom, the United States and the European
Union.
62 The African Development Bank (AfDB), the Asian Development Bank
(ADB), the European Bank for Reconstruction and Development
(EBRD), the European Investment Bank (EIB), the Inter-American
Development Bank (IDB), and the International Finance Corporation
(IFC), World Bank (IDA/IBRD) from the World Bank Group (WBG)
63 see www.idfc.org
64 Michaelowa A. and Michaelowa, K (2011). “Coding error or
statistical embellishment? The Political economy of reporting climate
aid”. World Development vol. 39, No. 11 pp. 2010-2020.
65 Jones L., Mitchell T., Villaneuva S. P., and Standley S. (2012) Coding
and tracking adaptation finance: lessons and opportunities for
motivated by political factors or simply misunderstanding of the
coding concepts.68
Therefore, the current coding methodologies available to
earmark climate finance might still allow for highly variable
outcomes, restricting the capacity for qualitative comparisons
and quantitative additions among countries. This is an
important aspect to be taken in consideration in future
discussions on climate finance under the auspices of the UNFCCC
and one that requires clear definitions and guidelines elaborated
and understood by both donors and recipient countries.
Moreover, since earmarking ex-post flows of climate finance
remain challenging, it is unclear how these methodologies could
be used well for projecting future flows of climate finance.
However, the fact that OECD countries have agreed on and some
are able to provide, to a certain extent, forward spending plans
for up to three years69 is a strong indication that these countries’
domestic budgetary processes are at least somewhat
compatible with providing indicative information on projected
levels of finance resources (particularly for general ODA).
Therefore, this report turns to directly analyzing the budgetary
processes of the Annex II Parties to explore how climate finance
is managed and appropriated within those domestic systems.
monitoring adaptation finance across international and national
scales. ODI – Overseas Development Institute.
66 Junghans, L. and Harmeling, S. (2012) Different Tales from Different
Countries: a First Assessment of The OECD "Adaptation Marker"
German Watch. Retrieved from:
http://germanwatch.org/fr/download/7083.pdf
67 Tirpak, D.; Brown L., and Ronquillo-Ballesteros, A. (2014)
68 Michaelowa A. and Michaelowa, K (2011)
69 See the statistics provided by the OECD for the Survey on Donors
Forward Spending Plans at:
https://stats.oecd.org/Index.aspx?DataSetCode=FSS
22
6. Analysis of the national budgetary
processes used by Annex II Parties
6.1. Overview of information collected on Annex II
Parties’ budgetary processes
The previous section demonstrates that many Annex II Parties
provide information on forward spending plans for general ODA
for up to three years out. In order to help identify what ex-ante
information on climate finance could be provided, this section
explores how Annex II Parties’ budgetary processes appropriate
climate finance and whether Parties have medium-term
planning processes in place that could provide indicative
information on spending plans beyond the annual budget cycle.
This analysis identifies key legal constraints and operational
capabilities to track the provision of future climate finance that
are then considered in Section 7 in its discussion of what ex-ante
information could be feasible for developed country Parties to
report under Article 9.5 of the Paris Agreement.
To establish a basis for analyzing Annex II Parties’ budgetary
processes, standard information has been collected on each
Party to facilitate comparability and identify trends in how
climate finance is allocated. Information collected is organized
into “fact sheets” for each Party which can be found in the
Annex, Section 10.3. The fact sheets have a common structure
which examines (1) the overall budget framework for annual and
multiannual budgeting, (2) the role of climate finance within this
process, (3) how climate finance is operationally planned and
managed at the department- and agency- level, and (4) a
summary of the availability of projected levels of public financial
resources. Each subsection of the fact sheets covers the
following aspects of the budget process:
Section 6.1 is an overview of information collected on Annex II
Parties budgetary processes. It covers basic description about
the budget process, the timeline of the fiscal cycle and agencies
and programs dedicated for climate finance. The factsheets
contained in Annex Section 9.3 profile the budgetary processes
of each Party in more detail. Section 6.2 explores the timing of
the annual cycle of the budgets and investigates multi-year
budget plans in each of the Annex II Parties. By analyzing both
national level and sub-national level of multi-year budget
methods we can grasp information on what countries are
opening in advance to their official annual budget. This part
arranged the timeframe of when the official annual budget
documentation is released to the public. The timing of annual
budgeting is essential as it will help settle the timing for the exante reporting. Section 6.3, the nature of Annex II Parties
budgetary processes, investigates multi-year budget plans in
each of the Annex II Parties. By analyzing both national level and
sub-national level of multi-year budget methods we can grasp
information on what countries are opening in advance to their
official annual budget. Lastly, Section 6.4, on how Annex II
Parties track and appropriate climate finance, explores how
climate finance is tracked and appropriated within the budget
processes. In this part, different types of climate finance
information is identified that can be developed in the ex-ante
reporting.





“Overall budget framework”: Provides a brief description
of the annual budget cycle and multi-year planning
processes if used, including key facts such as the fiscal year
start date, when the budget is proposed, when it is
approved, and who approves it. A table summarizing the
steps involved in the annual budget is included.
“Climate finance in the budget process”: Describes, to the
extent possible, how climate finance is specifically
appropriated in the national budget and it is tracked within
the process. This includes observed differences in how
funds are appropriated to multilateral and bilateral
channels.
“Planning at operational level”: Describes the operational
features of how climate finance managed at the
department- and agency-level, including which
government bodies control priorities and how they channel
multilateral and/or bilateral funds.
“Availability of projected levels of public financial
resources”: Summarizes the findings from the former the
subsections into a concise list of when ex-ante information
on climate finance becomes available based on the Party’s
budget process.
The following subsections analyze and discuss Annex II
Parties’ budgetary processes on the basis of the
information collected in the fact sheets in Annex, Section
10.3.
23
6.2. Timing of budget cycles for Annex II Parties
All Annex II Parties approve annual budgets to cover the
governments’ expenditures for the current fiscal year, and these
budget cycles are approved at different times of the year. This
variation in the timing of fiscal years determines when annual
budgets are proposed and when those budgets are approved,
and consequently impacts how much forward spending
information from annual appropriations is available at a given
time of year for each Party. Although multi-annual budgets, if
used, do cover time frames beyond the current fiscal year, they
are often adopted at the same time as annual budgets and so
are subject to similar variability in the amount of forward
information available at a given time. All EU member states,
with the exception of the UK, use the calendar year as their fiscal
year and therefore propose their budgets to their legislatures
between August and October each year. Non-EU countries,
including UK, begin their fiscal year between April and October,
and so submit their proposed budgets to their respective
legislatures between January and May. provides an overview of
the annual budget cycle for Annex II Parties.
Table 4 – Annual budget cycle for Annex II Parties70
When budget
is proposed
August
September
October
January
February
March
May
February
Annex II Party
Denmark
European Union, Finland,
Germany, Iceland, Italy,
Netherlands, Switzerland,
Sweden
Austria, Belgium, France,
Greece, Ireland,
Luxembourg, Norway,
Portugal, Spain
Japan
Canada
United Kingdom
Australia, New Zealand
United States
Fiscal year
start date
January
April
July
October
All EU member states, with the exception of the UK, use the
calendar year as their fiscal year and therefore propose their
budgets to their legislatures between August and October each
70
This table is modelled off of the table on page 24 of the OECD DAC
report “2014 Global Outlook on Aid: Results of the 2014 DAC Survey
on Donor’s Forward Spending Plans and Prospects for Improving Aid
year. Non-EU countries, including UK, begin their fiscal year
between April and October, and so submit their proposed
budgets to their respective legislatures between January and
May.
6.3. Nature of Annex II Parties’ budgetary processes
The nature of Annex II Parties’ budgetary processes vary in
important ways that are critical for UNFCCC negotiators to
consider in identifying what information is feasible for those
Parties to report in the ex-ante climate finance reporting
mandate of the Paris Agreement. There are, however, also key
commonalities between those systems in terms of the types of
multiannual budgeting processes used, if any are used, and the
quality of information available at varying levels of governance
within each country.
6.3.1. Relationship between levels of governance in
the budgetary process
With regards to the relationship between levels of governance
within countries’ overall budgetary processes, we observed a
number of general dynamics about how information on climate
finance is tracked in similar ways across annual and multiannual
budgets, within and between Parties. Granularity of information
on climate finance varies in key ways across national budget
documents, national policies or strategies, and department- or
agency-level policies and programmes –within and between
developed country Parties. However, some commonalities
emerged in the way that climate finance is characterized within
each level of governance across developed countries. Figure 4
below visualizes the observed relationship between levels of
governance with the granularity of information provided and the
number of Annex II Parties that provide information on climate
finance within these processes.
Budget documents: Most Annex II Parties have specific ministries
that are responsible for developing the national budget and
receive annual requests for appropriations from implementing
departments and agencies based on their upcoming annual or
mid-term spending plans (see top portion of triangle in Figure 4).
Information on climate finance in national budget documents, if
Predictability”. Data reflects original research by the authors of this
report.
24
Figure 4 — Number of Annex II Parties that provide information on climate finance at various levels of governance
within their domestic budgetary processes
available, is presented in aggregate quantities with limited
information for how such funds will be utilized. The majority of
overall international development support and goals to increase
climate finance over time (see Section 4.2 for specific examples).
Parties allocate resources to agency core funds in a manner that
does not explicitly earmark funds for climate-specific purposes,
but rather primarily use other categories to direct the use of
Department- or agency level policies and programmes: All
Parties have department- or agency-level policies and
programmes that contain some information about the role
climate finance plays in its overall portfolio, however the
availability and character of such information varies quite a bit
between each Party. And specifically, all Parties utilize some
form of multiannual strategic planning that guides bilateral
development cooperation. Information at this level tends to
include more detailed information than the latter two levels of
governance. Such information typically includes country- or
region-specific planning, thematic priorities (e.g. mitigation,
adaptation, ODA, etc), and information on specific activities (e.g.
clean energy development, drought resistance, infrastructure
development to prepare for sea-level rise, etc).
funding. A number of Parties also complement direct agency
funding
appropriations
through
representing
those
appropriations through cross-cutting thematic goals, such as
through tracking total international development or ODA
funding across all ministries. However, a few Parties do have
national budget documents that explicitly allocate financial
resources to climate finance.
National policies and strategies: Many Parties have national
policies or strategies that guide department and agency actions
and provide some indication of how climate finance may be
prioritized within overall international assistance (see middle
portion of triangle in Figure 4). Nation policies and strategies
generally provides more detailed information than budget
documents for how funds will used in the future, but such
information also tends to be qualitative in nature. 71 Examples
tend to include variations of efforts to mainstream climate into
71 However, information on policies and strategies for climate finance
can also be quantifiable in ways that can complement non-climatespecific national budgetary information to provide clarity on the
provision of future climate finance. For example, if information on a
Party’s overall planned spending on international financial support is
presented alongside quantifiable policy information on climate finance
6.3.2. Role of multiannual planning in the budgetary
process
The relationship between levels of governance in the budgetary
process described above reveals that there is an important
diversity of multiannual planning processes to be considered in
(such as a 20% target for climate-compatible development aid), it can
be possible to indicatively quantify the total planned climate finance
from that Party where each type of information would not provide
such clarity by itself.
25
identifying indicative information on Annex II Parties’ future
spending plans that go beyond the current fiscal year. Although
there is a diversity of planning processes at the programmatic
level (e.g. department- and agency-level), this analysis highlights
the differences between Parties’ multiannual national budget
processes and their bilateral cooperation development
programmes. Bilateral cooperation, unlike many other
programmes, was found to be quite consistent between Parties
and so was selected for elaboration here.
A ‘multi-year budget’ refers to an adopted or indicative
budgetary plan providing relatively detailed forward estimates
for spending departments and agencies for periods beyond the
current annual budget cycle.72 All of the 24 Annex II Parties, with
the exception of United States have some form of multiannual
national budget or financial plan in place. These budgets are
generally indicative in nature, less detailed than annual
appropriations, and are used to guide annual appropriations
process in future years. For example, many of the EU member
states adopted a medium-term budgetary framework (MTBF) to
provide three to four-year projection of the national budget to
EU. Some nations settle budget ceilings to ministries that
prevent them from over projecting. Table 5 provides an
overview of the types of multiannual budgeting practiced at the
national level by Annex II Parties.
In contrast to multiannual national budgeting, all Annex II Parties
use multiannual bilateral cooperation development
programmes and strategies to manage their work with partner
countries (within which climate is incorporated). Parties
generally use standard time frames for establishing multiannual
agreements with partner countries so exact start and end times
vary according to each established partnership (e.g. a
partnership with country X may run from 2012 to 2016, while a
partnership with country Y runs from 2014 to 2018). Specific
actions planned often under such agreements and may detail
country- or region-specific plans, and thematic priorities (e.g.,
such as mitigation, adaptation, capacity building and different
environmental sectors). Table 6 provides an overview of the
multiannual planning processes used by Annex II Parties for
bilateral development cooperation.
72
Multi-Year Expenditure Programming Approaches. (1995). Retrieved
from http://www.internationalbudget.org/publications/multi-yearexpenditure-programming-approaches/
26
Table 5 – Multiannual budgeting practiced at the national level by Annex II Parties
Annex II Parties
Period
(years)
Australia
Austria
Belgium
Canada
Denmark
European Union
Finland
France
3
4
4
1
4
7
3
3
Germany
5
Greece
4
Iceland
3
Ireland
3
Italy
4
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
3
4
4
3
4
3
Spain
3
Sweden
3
Switzerland
United Kingdom
United States
3
3
1
Multiannual budgeting practiced at the national level by Annex II
Parties
3 year multi-annual planning framework
4-year multi-annual budget framework
4-year multi-annual framework
Annual budget (3-year expenditure plan for departments)
4 year medium-term budgetary framework
Consecutive 7-year spending plans with annual spending limits
Multi-year framework with 2 year ceiling projections
3-year indicative budget outline
Multi-year budget framework with a non-binding five-year
Financial Plan
4-year medium term fiscal strategy framework
Multi-year budget framework (ceilings) for the fiscal year and
additional 2 years
3-year Medium-term budgetary framework
Multi-year budget framework (current year and additional three
years)
3-year Medium-term Fiscal Framework
4-year multiannual framework
4-year Multi-term budgetary framework
3-year medium-term budgetary framework
Multi-year budget framework (current fiscal year plus 3 years)
Multi-year (for some elements of the budget)
Multi-year budget framework (current fiscal year and additional 2
years)
Multi-year budget framework (current fiscal year plus next two
years)
3-year budgetary framework
3-year Medium-term budgetary framework
Annual budget only
27
Table 6 – Multiannual planning for bilateral development cooperation practiced by Annex II Parties
Annex II Parties
Australia
Austria
Belgium
Canada
Denmark
European Union
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
United States
Period
(years)
3-5
3-4
Multiannual planning for bilateral development cooperation practiced by
Annex II Parties
Partnerships for Development
4
5
5
Up to
7
4
5
2-4
5
4
3-5
4
5
4-5
4
3
5
6
4
4
3
5
5
Indicative Co-operation Programmes (PIC)
Country Strategies
Partner Country Policy Papers
National Indicative Programmes (NIPs) and Regional Indicative Programmes
(RIPs)
Country Strategies
Partnership framework documents (DCP)
Country Strategy Papers (CSP) and National Indicative Programmes
Development Co-operation and Assistance Programs
Country Strategy Plans
Country Strategy Papers (CSPs)
Country Programmes
Country Assistance Policies (CAPs)
Indicative Cooperation Programs (PICs)
Multi-Annual Strategic Plans (MASPs)
Aid partnerships
Strategic Partnerships
Indicative Cooperation Programmes (ICPs)
Multi-annual Country Partnership Frameworks (MAP)
Strategies for Development Cooperation
Cooperation Strategies
Strategic Partnerships
Country Development Cooperation Strategies (CDCS) or Regional
Development Cooperation Strategies (RDCS)
Indicative Cooperation Programmes (PIC)
28
6.4. Appropriating and tracking climate finance in
the budgetary process
This subsection overviews country processes used to track
climate finance. We identified the types of climate finance
information available in the annual budget as well as in the
multi-year budget programmes. It seems hard to track climate
finance at the national level and a clear connection between
pledges announced by countries and actual budgetary
information demonstrating the allocation for that pledge is not
a straightforward task. This section addresses the complex
system of tracking climate finance and the gap between the
pledges and the actual information presented by the countries’
budgetary processes.
6.4.1. Challenges with tracking appropriations to
climate finance
Most countries’ budget documents don´t allocate specific funds
for climate finance. It is mostly allocated by under ODA at the
national budget level or specified at the Ministry, agency or
program levels. This makes it hard to describe a general system
for channeling climate finance. As Section 5 noted, most Annex
II countries include climate finance expenditures in an ODA form
or as other form of aid. The parliament of New Zealand, for
example, directly appropriates ODA budgets to New Zealand
Aid. New Zealand’s climate-related assistance is delivered
bilaterally as ODA through the New Zealand Aid Programme.
Climate finance channel in France is also allocated under ODA.
The budget for climate is directed under a single inter-ministerial
“Mission” for “official development assistance.” In the interdepartmental policy document released by France, it sets out inyear disbursement schedules for “missions” (ODA) and across
programmes. As climate finance is not addressed specifically in
the document, we can only assume that the fund is allocated to
this route because most of the foreign aid (including climate
finance) is allocated in ODA form. Nevertheless, the “Mission” is
a useful mechanism as it points out which thematic sectors
France focus.
On the other hand, countries such as the Netherlands and
United Kingdom have strong ministries that directly deal with
climate finance with their own annual or multi-year budgets still
in form of ODA. For example, the Department of International
Development (DFID) in United Kingdom has its own authority for
73
Italian Presidency of the Council of the European Union. (2014).
Submission by Italy and The European Commission on Behalf of the
appropriating funding for climate projects in developing
countries. Their internal budget is not subject to further
parliamentary approval, which gives them more freedom to
allocate money to climate finance. International Climate Fund
(ICF), UK’s main organization for climate finance is operated and
managed by three ministries; Department for Environment Food
and Rural Affairs, Department for International Development,
and Department of Energy & Climate Change. In addition, the
Ministry of Foreign Affairs of the Netherlands is the main actor
to climate finance, which is designed as a part of their
international cooperation programme. It is the Minister for
Foreign Trade and Development Cooperation who is responsible
for the programming, planning and allocating of climate
finance.73 Diverse Ministries contribute to climate finance and
they all have forward spending proposals submitted to the
Government. However, the information is not organized in the
national budgets but scattered in different forms. These
circumstances make it harder to track climate finance.
6.4.2. Challenges with tracking pledges for climate
finance
Analyzing the national and programmatic level of budgetary
processes we recognized that there is diverse information on
how climate finance is allocated. The only problem is that it is
not systematically organized. Moreover, pledges work as a basic
ex-ante information that is already given. Parties announced
pledges and this is essentially the primary way future funds
appear to be maintained/tracked. Therefore, this is a significant
piece of information about future flows. Pledges can take the
form of indicative spending plans, thematic goals, or regional
targets, and be presented through national multi-year budgets,
multi-year programmatic plans or strategies, or purely political
statements.
However, there is still a gap between the information
announced by the government and the truth beneath the
national budget process. There is a big substantive gap in clarity
on how such funding will be used and when/how provided. This
is often a political commitment and there is a lack of clarity on
how such funding is planned within the domestic budget
process. Such announcements are not systematically tracked
under the UNFCCC and Parties do not appear to voluntarily
report and further explain their announcements through followup reporting processes.
Subject : EU submission 2014 on strategies and approaches for scaling
up climate finance. 1–81.
29
For example, the United Kingdom announced to the UNFCCC
that it would increase support for international climate finance
by at least 50 percent, providing at least GBP 5.8 billion between
2016 and 2021, aiming to spend half on adaptation. On the other
hand, in the government policy paper for ICF, it states that “UK
government will provide £5.8 billion from the existing 0.7% ODA
budget to ICF between April 2016 and March 2021, including at
least £1.76 billion in 2020.”75
The information which UK missed to report to UNFCCC, but was
able for access, is that the amount they will fund comes from the
0.7% ODA budget. In addition, even though the governmental
policy paper addressed that UK has a specific amount already
settled for 2020, it was not pointed out in their announcement
to the UNFCCC.
Table 7 – Comparison between announced pledges for climate finance in 2015
74
Annex II Party
As available on the UNFCCC Information on the pledge attained
website
from public government documents or
website
(additional, if any, is underlined)
United Kingdom74
“The United Kingdom recalled that it
would increase support for
international climate finance by at
least 50 per cent, providing at least
GBP 5.8 billion between 2016-2021,
aiming to spend half on adaptation.”
The UK pledge on the UNFCCC announced pledge is available here,
and information on the announcement from public UK government
documents is available here.
“The Prime Minister has said that the UK
government will provide £5.8 billion from
the existing 0.7% official development
assistance (ODA) budget to the
International Climate Fund between April
2016 and March 2021, including at least
£1.76 billion in 2020.”
75
International Climate Fund. Policy paper. (2015). Retrieved March
30, 2016, from
https://www.gov.uk/government/publications/international-climatefund/international-climate-fund
30
7. Feasibility of what ex-ante information
that Annex II Parties could report
In order to determine what ex-ante information developed
country Parties should report biennially under the reporting
mandate in the Paris Agreement, it is necessary to explore what
information is feasible for those Parties to provide. This section
explores this question of feasibility by analyzing and synthesizing
the findings of Sections 3 to 6 -- drawing on observations of what
those Parties’ already provide in terms of ex-ante information
within (Section 3 and 4) and outside (Section 5) of the UNFCCC
process, and with consideration for the limitations of their
national processes (Section 6).
Article 9.5 of the Paris Agreement states that developed country
Parties are required to “communicate indicative quantitative
and qualitative information related to... as applicable, including,
as available, projected levels of public financial resources to be
provided to developing country Parties” (emphasis added). As
discussed in the previous sections of this report, Parties already
provide some level of ex-ante information on climate finance
through their submissions on strategies and approaches and
through other fora outside of the Convention. As the work
programme on long-term finance noted in 2013, key factors that
continue to constrain “the extent to which [developed country
Parties] are able to provide information on budgets and/or
forecasts of public expenditures in future years” include
“national legislation, policies, rules and practices”.76
With this in mind, this section seeks to technically examine the
capability of Parties’ domestic processes to allow for the
provision of ex-ante information and how such information
informs upon the ex-ante reporting process to be developed
under the Paris Agreement. As a feasibility analysis, this report
identifies 3 categories of factors that serve as potential barriers
for reporting forward looking information:
 Legal: Domestic legal processes strictly control the use of
public finance. Such processes can determine when
information can be available, in what quantities, and how
such information is qualified with regards to its intended
use.
 Political: Political dynamics tend to drive how climate
finance is prioritized and characterized within domestic
strategic planning and policy-making process as it
competes with other priorities. Such factors can include a
Party’s risk aversion to having international indicative exante information construed as commitments, or domestic
political perception that climate finance ‘takes away’ from
competing priorities.
 Operational: Operational factors within Parties’
institutions can significantly impact the availability of
forward looking information due to how climate finance is
managed and what methodologies those institutions use
to track climate finance. Such factors can include how
departments and agencies develop bilateral spending
plans with partner countries, formulate strategic or policy
goals, and how climate finance is operationally defined and
tracked in a way that allows for ex-ante information to be
available.
These factors interact in important ways that are essential to
consider - in terms of near-term considerations for identifying
the information to be reported under Article 9.5 and longerterm, post-2020 considerations for how reporting on ex-ante
information could evolve in the coming years. Each factor can
independently function as a barrier for each Party in reporting
any specific type of information at a given point in time. For
example, a Party might be politically willing and operationally
able to provide a given type of information, but it might not be
legally permitted to share such information due to restrictions in
its budget process. Alternatively, a Party might be legally able
and operationally capable to provide a given type of
information, but it may not be politically willing to report such
forward-looking information. Lastly, a Party might be legally able
and politically willing to provide a given type of information, but
it may not be operationally capable to provide such information
in the ex-ante. These relationships are shown below in Figure 5.
The intersections between the legal, political and operational
areas represent the different arrangements of feasibility
discussed above and what factor represents a barrier. If a
country has restrictions in all 3 of this factors, then it is probably
not possible to provide any kind of ex-ante information.
76
UNFCCC, (2013). CP/2013/7. Report on the outcomes of the
extended work programme on long-term finance, Note by the cochairs.
31
Figure 5 – Factors influencing the feasibility for a Party to
provide a given type of ex-ante information on climate
finance



The following subsections discuss what information may be
feasible for Annex II Parties to report with consideration to the
above factors with regards to general observations (Section 7.1),
qualitative and quantitative information on projected levels of
public financial resources (Sections 7.2), issues related to timing
(Section 7.3), and possible reporting formats for ex-ante climate
finance information (Section 7.4).
7.1. General observations
Understanding the constraints posed by domestic budgetary
processes are key to effectively assessing what ex-ante
information developed country Parties can provided on climate
finance.
Overall, all Annex II Parties are able to provide some indicative
qualitative or quantitative information on projected levels of
public financial resources. However, the extent that such
information can be provided from each level of governance is
highly dependent on the specific legal and operational contexts
of each Party, and its political willingness to provide such
information.
As discussed in Section 6, the systematic differences between
the information available at each level of governance is key for
negotiators to consider (e.g. national budget documents,
national policies and strategies, and department- and agencylevel policies and programmes).
Budget documents: This type of information is very
helpful for understanding the overall aggregate
potential future levels of support, but such information
is limited in its level of detail. The primary limiting factor
providing this information is political agreement how
such information could be helpful to report if it is not
always clearly climate-specific.
National policies and strategies: While somewhat
helpful for anticipating future flows of climate finance,
is very limited in improving predictability of future
climate finance without some level of quantitative data
such as the information available in the aggregate
national or department/agency level budget plans
(whether defined as ‘climate specific’ in those figures
or not).
Department- or agency level policies and programmes:
Information at this level tends to include more detail
that is not available from the latter two level, and
serves a unique role for improving transparency and
predictability of climate finance because it can include
country- or region-specific planning, thematic
priorities, and information on specific activities.
However, it appears that operational barriers tend to
restrict the availability of such information due to
challenges in project planning, although the availability
of such information is improving for ex-post reporting.
In developing requirements for the ex-ante climate finance
reporting mandate, negotiators should pay particular attention
to the complementary nature of the information available at
each level. Although information at each level may not
significantly improve overall predictability of flows, the
combination of such information can significantly improve the
quality of indicative information on projected levels of climate
finance from each developed country Party.
Are developed country Parties’ national budget processes
compatible with ex-ante climate finance reporting? Yes, in a
limited and nuanced way. Designing a reporting process that can
leverage the information available to improve predictability of
flows requires negotiators to continue technical deliberations on
how the various types of available information can complement
each other. Since most budget processes do not explicitly
appropriate funds to ‘climate finance’ (but rather ODA or
international assistance generally), it is particularly important to
complement such figures with clarifying national policies or
strategies with how such funds may be used in the future (e.g.
32
such as goals on mainstreaming climate to a specified percent of
international development assistance). As explored in Section 5,
since most developed country Parties utilize multi-year
budgetary planning in some form, it appears feasible that such
ex-ante information could be provided and non-budgetary
information (e.g. policies and strategies) might ‘fill in the gaps’
or extend projections beyond what limitations dictated by the
budget process itself.
7.2. Quantitative and qualitative information on
projected levels of public financial resources
It’s clear from this report’s assessment of the submissions on
strategies and approaches (Section 4), its review of finance
reporting processes outside the Convention (Section 5), and its
analysis of Annex II Party budget processes (Section 6) that there
are various types of information that could be reported on
climate finance. This subsection outlines what types of
information is broadly feasible to include in the ex-ante
reporting mandate and discusses key options and tradeoffs that
negotiators will need to consider in developing the guidelines for
the process.
To evaluate what ex-ante information could be provided, it’s
informative to also start from a baseline of the types of
information that Parties already provide in their ex-post
reporting. As a general matter, most Parties have been
supportive of improving clarity on past climate finance flows due
to more established practices in tracking climate finance expost. Therefore, it may be reasonable to expect that that the
type of forward-looking information Parties might provide
would include at least a subset of this type of information, in
addition to aspects unique to ex-ante tracking of climate finance.
Table 8 provides an overview of types of information provided
through common tabular format (CTF) portion of the Biennial
Reports.
Given this baseline, we can explore what information is feasible
for Parties to report by using the above information as a baseline
template. Table 9 below provides an overview of the types of
quantitative and qualitative information on projected levels of
public financial resources that developed country Parties could
be provided, and includes various ‘qualifiers’ that might be
considered that could be unique to forward-looking information.
For quantitative information, it appears feasible for developed
country Parties to provide some level of information on
expected levels of future ‘public financial resources’. As
discussed in Section 7, methodological limitations constrain how
climate finance is appropriated and tracked within budget
processes. This inhibits the quantification of climate-specific
Table 8 – Overview of types of information provided through common tabular format (CTF) portion of the Biennial Reports
Type of Channel
Allocation channels
Multilateral
contributions
Quantity of finance provided:
Bilateral
contributions




Total contributions through multilateral channels
Multilateral climate change funds
Other multilateral climate change funds
Multilateral financial institutions, including regional
development banks
 Specialized United Nations bodies
Quantity of finance provided:
 Total contributions through bilateral, regional and
other channels
 Specific contributions through bilateral, regional and
other channels
Qualifiers
Status
 Provided
 Committed
 Pledged
Sector (examples)
 Energy
 Forestry
 Agriculture
 Cross-cutting
Type of support
 Core/general
 Mitigation
 Adaptation
 Cross-cutting
 Other
Financial instrument
(examples)
 Grant
 Loan
Funding source
(examples)
 ODA
 Climate
Additional info
 Included if applicable
33
finance over Parties’ annual and medium-term spending plans at
the national or department level. However, quantitative
information on forward spending plans for general international
development cooperation does broadly appear to be available
for most Parties, with information such as spending ceilings,
floors, qualifiers, baselines, and distribution periods.
With regards to Parties’ annual budget processes specifically,
there appears to be reasonable that Parties provide more
detailed forward spending information for 1 year forward (up to
the end of their fiscal year) and then provide varying levels of
indicative information about spending plans beyond that time
frame. The inclusion of such information in reporting is certainly
feasible, however, in line with the mandate of Article 9.5,
negotiators would need to consider how and why such
information would “applicable” for being included in light of how
other qualitative information (e.g. policies, etc) can indicatively
quantify climate finance flows within that overall budget.
With regards to pledges for climate finance, it appears to be
quite reasonable that Parties be expected or encouraged to
include a full reiteration of their various pledges in the reporting
process. As discussed Section 6.4, pledges take forms such as
indicative spending plans, thematic goals, or regional targets,
and are should be expected to be accounted for in Parties’
national multi-year budgets, multi-year programmatic plans or
strategies, or to remain as purely political statements until they
can be incorporated into the budget process. In line with the
mandate of Article 9.5, it appears feasible that Parties include
more detailed information, “as available”, about current
pledges. The elaboration on the details of the pledges over time
would likely also be supportive of a credible and ‘clear pathway
to scaling up climate finance’. Such information could include
updated timelines for distributing funds, and channels and
instruments to be utilized. This clarity would also improve
uncertainties with regards to how various pledges supplement
or overlap with one another (e.g. such as uncertainties with
overlap thematic pledges, and pledges to the GCF or other
multilateral funds).
on the important role of private finance in their submissions on
strategies and approaches, this type of information may receive
more attention over time for this reporting process. The
leveraging of finance from alternative sources would likely
receive similar attention for its inclusion in ex-ante reporting.
For qualitative information, it appears feasible that developed
country Parties can provide information that can meaningfully
qualify how projected levels of public financial resources will be
used for climate finance. As discussed in Section 7.1, such
information can be useful or unhelpful on its own in improving
the predictability of future climate finance flows, or it can be
effective in complementing quantitative information (as
discussed above) by ‘filling information gaps’ on how national or
ministry budgets will be used for climate-specific purposes.
Developed country Parties submissions on strategies and
approaches, as discussed in Section 4, provide some indication
of the type of information that could be included, such as
Parties’ policies, programmes, priorities, national- or agencylevel plans, efforts to balance finance for adaptation and
mitigation, and steps taken to enhance enabling environments.
In particular, well-formulated national- or agency-level policies
can meaningfully clarify how broader agency budgets will be
strategically used in the Parties overall development
cooperation agenda. Programmatic information can provide
more nuanced indications of how future finance may be used,
although it is more operationally limited in terms of how far into
the future such information can be accurate. Such information
could include information on channels used to direct funds (e.g.
bilateral and regional plans), sources (e.g. extent public, private,
or alternative sources are utilized), and which institutions lead
on climate finance and what methodologies they use to track
and direct climate finance.
As methodologies for tracking and leveraging private finance
improves over time, it is also feasible that reporting could
include information about how, and to what scale, private sector
finance will be leveraged in the future from public financial
resources and instruments. 77 Given Annex II Parties’ emphasis
77
In the workshop summary from the work programme on long-term
climate finance, the co-chairs noted that “[d]ue to their ability to
channel finance from private sources to climate projects by using
leveraging instruments, multilateral and bilateral entities become a
source of additional/new funds.”
34
Table 9 – Types of quantitative and qualitative information on projected levels of public financial resources that
could be provided
Quantitative information
Expected levels of future public financial
resources included in annual and mediumterm spending plans, including
contributions to:
 Multilateral channels (multilateral
funds, specialized UN bodies)
 Bilateral, regional, or other channels
 Pledges, including:
 Expected levels
 Thematic goals
 Regional goals
Private finance leveraged from public
resources
Alternative sources
Qualifiers
Overall, specific information could be provided up to end of current
fiscal year, with less detailed information for following years. The
following information should be included as applicable, and as
available:
Type of spending plan





ceiling
Floor
Expected/projected
Qualifiers
Baselines
Timeline
 Distribution time frame
Funding source (examples)
 ODA
 Climate
Status
 Provided
 Committed
 Pledged
 Indicative
Sector (examples)
 Energy
 Agriculture
 Cross-cutting
 Other
Type of support
 Core/general
 Mitigation
 Adaptation
 Cross-cutting
 Other
Financial instrument (examples)
 Grant
 Loan
Additional info
 Included if applicable
As Parties make progress on tracking of leveraged private sector
finance, and as alternative sources are increasingly utilized, they
might consider including the scale expected to be leveraged from
public resources in ex-ante reporting.
Qualitative information
Policies, programmes and priorities
(including actions and plans)
Efforts to balance support for adaptation
and mitigation
Steps taken to enhance enabling
environments
When quantitative information is unavailable, qualitative information
can ‘fill the gap’ to clarity how broader department and agency
planning will manage climate finance within their overall planning
framework. When possible, information on the above qualifiers is
helpful in providing insight into how funds may be used in the future,
when available.
35
Table 10 – Sample timeline overview of the relationship between quantitative and qualitative information available on future
climate finance flows
Type of
Information
Quantitative
Qualitative
N
Mix of indicative and
committed funds
$3bn for mitigation
projects in partner
countries; $1bn to LDCF;
prioritize African nations
Year (N = current year)
N+1
N+2
Indicative only
Indicative only
N+3
pledged
N+4
Not available
Year-N funding to
be baseline for
future
contributions
Contribution for
GCF; goal of 50%
climate funding to
adaptation
End fossil fuel
export credits
by N+4
The relationship of how quantitative information could relate to
each other can also be visualized over future time periods.
Overall, clear quantitative information on levels of future
climate finance is relatively short-term due to time constraints
and allocation processes in Parties’ annual and multiannual
budgetary systems (although pledges for climate finance
overcome these barriers but are only maintained as political
pledges until national budgetary processes can integrate those
statements into their national planning). Qualitative
information, however, can ‘fill the gaps’ in providing some level
of transparency and predictability where the budget system is
unable to provide future information. Table 10 provides a
sample timeline overview of the relationship between
quantitative and qualitative information available on future
climate finance flows.
Goal for 30% of ODA
to be climate
compatible by N+2
7.3. Considerations for negotiators in determining
what quantitative and qualitative information
should be reported
In developing the reporting guidelines for the ex-ante reporting
mandate of the Paris Agreement, negotiators will need to
consider a variety of tradeoffs that will likely drive deliberations
to some extent over the coming years. Specifically, negotiators
will need to consider (1) how the balance and relationship
between the provision of quantitative and qualitative
information, (2) issues of consistency between the information
provided between different Parties’ submissions, and (3) levels
of accountability incumbent upon Parties for implementing
actions based on the information communicated. Below details
a number of various options or tradeoffs for negotiators to
Table 11 – Considerations for negotiators in identifying the ex-ante information to be reported
Consideration
Tradeoff 1
Tradeoff 2
Balance between the
provision of quantitative
and qualitative
information
Emphasis on the provision of quantitative
information:
 Very useful
 Climate-specific info is relatively limited
 Can be contextualized by qualitative info
Consistency of the
information provided
between different Parties’
submissions
All Parties report the same type of information:
 More consistent and comparable
 Potential for Parties to not provide
information that is uniquely available to
them
Information is purely indicative:
 Potential for more info
 Less predictable
 More flexible in adjusting to role of countryownership in directing use of funds
Emphasis on the provision of qualitative
information:
 Varies in usefulness
 Can be climate-specific in nature
 Can be improved through if strategically paired
with quantitative info
Parties may report different types of information:
 Less consistent and comparable
 Allows Parties to provide unique info, but less
unclear whether Parties would chose to include
such info
Information can be considered committed:
 Less info
 More predictable
 Constrained by role of country-ownership in
directing use of funds
Level of accountability
incumbent upon Parties
for implementing actions
based on the information
communicated
36
consider. Table 11 provides an overview of considerations for
negotiators in identifying the ex-ante information to be
reported.
7.3.1. Balance between the provision of quantitative
and qualitative information:
A primary tension in determining what type of information
should be reported is in striking a balance between the amount
and character of quantitative and qualitative information that is
reported and how such information informs on each other. On
one hand, emphasis on the provision of quantitative information
can lead to very useful information on projected levels of public
financial resources. However, such information appears to be
relatively limited on providing ex-ante info on climate finance
specifically given constraints posed by how funding is allocated
and managed in in domestic budgetary processes. For this
reason negotiators will need to consider how the provision of
any quantitative information derived from budgetary processes
would be contextualized with additional qualitative
clarifications.
On the other hand, qualitative information appears to vary
substantially in its usefulness in improving the predictability of
future flows, although it is also more readily available (as
evidenced by the biennial submissions on strategies and
approaches). Since budgetary documents themselves tend to
not appropriate climate finance explicitly (but rather
development cooperation generally), qualitative information
will be important for providing clarity to how such funds will be
utilized in the future.
7.3.2. Consistency between the information provided
between different Parties’ submissions:
Another key consideration is whether or not the reporting
process is designed for Parties to provide the same or different
types of information. Providing the same types of information
would improve consistency and comparability between Parties
and for each individual Party over time. However, this may also
result in Parties providing less information overall they may have
otherwise given individual differences in their budget processes
and how they manage climate finance programmatically.
If the reporting system was designed for Parties to provide
different types of information, on the other hand, would lead to
potentially less consistent and comparable information, but it
would also allow Parties to include useful information that is
unique to each Party. Less stringent guidelines that may allow
for variations in the content of submissions might also result in
Parties simply choosing not to provide information that they
were able to provide. To offset this, negotiators would need to
explore ways to take this diversity into account and encourage
developed country Parties to voluntarily provide such additional
information. Codifying how such unique info would be included
through standardized submission formats or guidelines would
be one way forward.
7.3.3. Level of accountability incumbent upon Parties
for implementing actions based on the
information communicated:
The extent that developed country Parties are considered to be
accountable for the actions and financial information
communicated in their ex-ante finance reports will also be a key
issue of concern. On one hand, information in the submissions
could be considered as ‘committed’ (or somewhat committed)
future flows. This approach would place a level of burden on
developed country Parties to report accurately and only
information that has some high level of confidence in being
actually delivered. Information received through submissions
would likely be fairly conservative figures, but would provide
relatively high predictability that such flows would be
distributed. This approach may be a hard achieve.
On the other hand, information in the submissions could be
considered purely indicative of Parties’ plans for managing
future finance flows. This approach could result in Parties being
more willing to include more information in their submissions
than in the former approach, but this would also likely result in
relatively less predictability in future flows based on the
information provided overall.
A balance between these perspectives in accounting for and
accommodating the various technical constraints of Parties’
domestic planning processes. For example, all ex-ante
information could be considered purely indicative by default (as
it is in the DAC Survey on Donor’s Forward Spending Plans), but
the reporting process could allow for any funds or plans to be
tagged as ‘committed’ when applicable.
This intermediate position may also address a technical issue
influencing the extent that developed country Parties can
confidently project future financial flows. The growing
integration of ‘country-ownership’ into bilateral cooperation
efforts introduces a significant tension between donor country
Parties’ capability of being accountable for their stated plans to
use funds and how those funds are actually programmed and
37
dispersed when channeled through bilateral channels that are
partially driven by recipient country Parties’ priorities. This is a
particularly significant dynamic to consider in light of the fact
that bilateral cooperation appeared to have been the delivery
channel mostly used by the majority of developed country
Parties in their biennial submissions on strategies and
approaches.78
7.4. Timing of the provision of ex-ante climate
finance information
Another key consideration is whether or not the reporting
process is designed for Parties to provide the same or different
types of information. Providing the same types of information
would improve consistency and comparability between Parties
and for each individual Party over time. However, this may also
result in Parties providing less information overall they may have
otherwise given individual differences in their budget processes
and how they manage climate finance programmatically.
If the reporting system was designed for Parties to provide
different types of information, on the other hand, would lead to
potentially less consistent and comparable information, but it
would also allow Parties to include useful information that is
unique to each Party. Less stringent guidelines that may allow
for variations in the content of submissions might also result in
Parties simply choosing not to provide information that they
were able to provide. To offset this, negotiators would need to
explore ways to take this diversity into account and encourage
developed country Parties to voluntarily provide such additional
information. Codifying how such unique info would be included
through standardized submission formats or guidelines would
be one way forward.
7.4.1. Level of accountability incumbent upon Parties
for implementing actions based on the
information communicated:
developed country Parties to report accurately and only
information that has some high level of confidence in being
actually delivered. Information received through submissions
would likely be fairly conservative figures, but would provide
relatively high predictability that such flows would be
distributed. This approach may be a hard achieve.
On the other hand, information in the submissions could be
considered purely indicative of Parties’ plans for managing
future finance flows. This approach could result in Parties being
more willing to include more information in their submissions
than in the former approach, but this would also likely result in
relatively less predictability in future flows based on the
information provided overall.
A balance between these perspectives in accounting for and
accommodating the various technical constraints of Parties’
domestic planning processes. For example, all ex-ante
information could be considered purely indicative by default (as
it is in the DAC Survey on Donor’s Forward Spending Plans), but
the reporting process could allow for any funds or plans to be
tagged as ‘committed’ when applicable.
This intermediate position may also address a technical issue
influencing the extent that developed country Parties can
confidently project future financial flows. The growing
integration of ‘country-ownership’ into bilateral cooperation
efforts introduces a significant tension between donor country
Parties’ capability of being accountable for their stated plans to
use funds and how those funds are actually programmed and
dispersed when channeled through bilateral channels that are
partially driven by recipient country Parties’ priorities. This is a
particularly significant dynamic to consider in light of the fact
that bilateral cooperation appeared to have been the delivery
channel mostly used by the majority of developed country
Parties in their biennial submissions on strategies and
approaches.79
The extent that developed country Parties are considered to be
accountable for the actions and financial information
communicated in their ex-ante finance reports will also be a key
issue of concern. On one hand, information in the submissions
could be considered as ‘committed’ (or somewhat committed)
future flows. This approach would place a level of burden on
78
UNFCCC. (2015, May) “Compilation and synthesis of the biennial
submissions from developed country Parties on their strategies and
approaches for scaling up climate finance from 2014 to 2020, Note by
the secretariat.” Paragraph 29.
79 UNFCCC. (2015, May). Paragraph 29.
38
7.5. Timing of the provision of ex-ante climate
finance information
Beyond the challenge of identifying the types of substantive
information that developed Parties could provide under the
reporting process, there are a number of notable additional
challenges related to the timing of the provision of ex-ante
climate finance information. Specifically, negotiators will need
to consider (1) the timing of when reports are communicated to
the Convention, (2) the time frames covered by projected levels
of public financial resources, and (3) ways in which the reporting
guidelines might evolve over time. Each of these dynamics have
their own tradeoffs and play an important role in the type of
information that would be feasible for Parties to provide,
particularly in light of constraints posed by their national
budgetary systems. Table 12 provides considerations for
negotiators in addressing issues related to the timing of the
provision of ex-ante climate finance information.
Table 12 – Considerations for negotiators in addressing issues related to the timing of the provision of ex-ante climate finance
information
Consideration
Tradeoff 1
Tradeoff 2
Timing of when
reports are
submitted to the
Convention
All reports are to be submitted biennially at the
same time by all developed country Parties:
 Aggregate data is more easily assessed and
synthesized
 More consistent and comparable between
Parties submissions
 Can more readily feed into finance discussions
 Submission time could systematically reduce
the information some Parties can provide
 Could increase the reporting burden if
submitted at same time as BRs
All ex-ante reports cover the same period of time:
 More consistent and comparable
 Established rhythm for updating expected
finance flows
 Provides developed country Parties with a
concrete framework to organize their
submissions
 Potential for Parties to not include forward
information that is uniquely available to them
beyond a set period of time
The guidelines for reporting remain static after
adopted by the CMA:
 May be limited to what Parties’ domestic
processes can currently provide
 Unlikely to resolve issues related to
transparency and predictability of future
climate finance flows
Reports can be submitted biennially at different
times by developed country Parties:
 Aggregate data could be more difficult to assess
and synthesize
 Less consistent and comparable between Parties
submissions
 Potentially more challenging to integrate with
finance discussions
 Submissions could be sequenced with Parties’
budgetary processes to improve quality of
individual reporting
Time frames
covered by
projected levels of
public financial
resources
Evolution of the
reporting guidelines
over time
Ex-ante reports are allowed to cover different
periods:
 Less consistent and comparable
 Potentially less clear rhythm for updating
finance flows
 Allowance of differences can be mitigated
through more nuanced reporting guidelines
 Potential for Parties to include forward
information that is uniquely available to them
beyond a set period of time
The guidelines for reporting are changed over time
under the CMA:
 May be able to expand to adapt to what Parties’
domestic processes may eventually be able to
provide
 More likely to resolve issues related to
transparency and predictability of future climate
finance flows
 Potential to identify and encourage best
practices over time, and adapt reporting
guidelines accordingly
39
7.5.1. Timing of when reports are submitted to the
Convention:
Biennial reports could be submitted at the same time for all
Parties or at different times of the year. This could have
significant impact on the information that each Party could
include in its report. As discussed in Section 6, differences in
Parties’ national budgetary processes have an important
influence on the availability of forward information and
information contained in annual and multi-annual plans differs
in level of detail on how funds will be used.
If submissions are made at the same time for all developed
country Parties, then aggregate data could be more easily
assessed and synthesized to feed into finance discussions under
the Convention. Information may also be more consistent and
comparable. However, although it is possible that an adequate
common submission time could be found for all Parties to
submit their reports, a common time might also systematically
reduce the information some Parties could provide. 80 Table 13
Error! Reference source not found.provides an overview of how
potential submission periods relate to the start of Annex II
Parties fiscal years (and their budget time scales).
For example, if submissions are all required to be submitted in
the first quarter (January to March), most EU Parties would be
able to provide information on the full year ahead based on their
annual budgets as well as information from their multiannual
budget plans. However, Parties with fiscal years that start at
other times would not be able to provide as much forwardlooking information within their current fiscal year (e.g.
approximately only 6 months for Australia and New Zealand). On
the other hand, if submissions were made in the fourth quarter
(October to December) then more non-EU Parties could provide
projections farther out within their fiscal year, and the
submissions could serve as an input for finance discussions
during the COP in December. 81
Negotiators should also consider how the timing of biennial
submissions on ex-ante information would be synchronized with
the biennial ex-post reporting process. Requiring submissions on
the same year (and at the same time of year) will increase the
burden on reporting on developed country Parties. Offsetting
Table 13 – Overview of how potential submission periods relate to the start of Annex II Parties fiscal years (and their budget
time scales)
Submission period
(3 month periods)
Number of Parties
with fiscal years that
begin in this period
Fiscal year
start date
Annex II Party (# of years in multi-year budget)
Note: (1) = annual budget only
1st Quarter
(1 Jan – 31 March)
18
January
Austria (4), Belgium (4), Denmark (4), European Union (7),
Finland (3), France (3), Germany (5), Greece (TBD), Iceland
(1), Ireland (3), Italy (TBD), Luxembourg (TBD), Netherlands
(TBD), Norway (1), Portugal (TBD), Spain (TBD),Switzerland
(3), Sweden (TBD)
2nd Quarter
(1 April – 30 June)
3
April
Canada (3), Japan (1), United Kingdom (3)
3rd Quarter
(1 July – 30 Sept)
2
July
Australia (3), New Zealand (TBD)
4th Quarter
(1 Oct – 31 Dec)
1
October
United States (1)
80
If negotiators want to consider having submissions made at the
same time of year, they may also find that the role of information
provided through some Parties’ multiannual budget processes might
partially offset limitations what information could be provided
through just their annual budgets.
81
In this scenario, it may be possible for Parties with fiscal years
starting in January (most EU Parties) to provide projections based on
their submitted budget proposals which are usually submitted
between September and October. See Table 12 for more info on
timing of annual budget cycles for Annex II Parties.
40
submissions by one year would distribute this burden. Offsetting
submission times might also have other benefits. Ex-post reports
are currently submitted one full year following the period that it
is reporting on (e.g. BRs submitted on 1 January 2016 covered
years 2013 to 2014). If this sequence is used for biennial ex-post
reporting under the Paris Agreement, then submitting biennial
ex-ante reports out of sequence could allow for ex-ante reports
to cover the same periods as ex-post reports. See Figure 6 below
for an illustration of how this relationship could be designed.
the year. This may allow individual Parties to sequence the
communication of ex-ante information with their budgetary
processes to allow for better forward projections on climate
finance. However, this could also make analysis of the aggregate
of developed country Parties’ efforts more difficult to assess for
feeding into finance discussions under the Convention.
Rather than submitting at the same time, Parties could
alternatively submit their reports biennially at different times of
Figure 6 – Overview timeline of the possible relationship between ex-post and ex-ante reporting processes in the post-2020
period
(Note the assumptions made in the information boxes below)
41
7.5.2. Time frames covered by projected levels of
public financial resources:
Ex-ante reports could cover the same future period, or they
could be allowed to cover different periods. If all reports covered
the same period (e.g. 2 or 3 forward years), then information
contained in those reports would be likely to be more consistent
and comparable. It would also establish a more predictable
rhythm for updating forecasts of future flows. This would also
give developed country Parties a concrete framework to
organize their submissions around. Dependent on the timing of
when submissions are submitted, it’s not unreasonable for most
Parties to provide projections of climate finance up to a year out,
and longer depending on how climate finance is allocated in
Parties’ multiannual budgetary process. As discussed in Section
5, the OECD DAC’s Survey on Donors’ Forward Spending Plans
collects information from developed countries for the following
three years. Given this precedent, it may be reasonable to
consider whether developed country Parties could also work to
provide 2-3 year projections on climate finance. Notably, if
submissions if both the ex-ante and ex-post processes under the
Paris Agreement were to each cover two years, they could be
designed to cover the same periods. This dynamic is worth
considering, particularly for considering aspects of how the
technical review process for the ex-post transparency
framework will assess finance provided.
One the other hand, reports could also be allowed to cover
different periods of time. Compared to consistent time frames,
this could result in less consistency and comparability between
Party submissions and less clear rhythm for updating finance
flows. However, these issues could be partially mitigated if
negotiators can work to design more nuanced reporting
guidelines. For example, Parties could be required or
encouraged to report out on a minimum number of forward
years (e.g. such as a minimum of two years) or provide all
information in the form of annual allocations when possible. The
latter requirement could aim to seek clarity particularly on how
longer climate finance goals will be planned in the near term. For
instance, if a Party announced a pledge for $6 billion over the
following four years, that Party could be encouraged to include
this four-year pledge in its report (beyond a two-year minimum
requirement) and it could be required to include indicative plans
for how those funds will be distributed each year for the first two
years.
7.5.3. Evolution of the reporting guidelines over time:
Negotiators will need to consider how the reporting guidelines
may need to evolve over the coming years as the way developed
country Parties track and manage climate finance improves. As
discussed in Section 6, most Annex II Parties’ budgetary
processes are not well-designed to explicitly appropriate
financial resources to climate finance in a way that facilitates
predictability of future flows. However, various policies and
other supporting qualitative information are helpful, more
flexible, and are continuing to improve over time. Given this, it
is important that negotiators under the COP consider near- and
long-term feasibility of what Parties could report and how this
should inform the nature of the mandate and reporting
guidelines to be adopted by the CMA.
On one hand, the process initiated at COP22 to identify the
information to be reported under Article 9.5 of the Paris
Agreement could explore what information developed country
Parties are able to currently report given the legal and
operational constraints of their national processes. Although
this pre-2020 assessment will establish an important foundation
on what should be reported, it will not likely resolve contention
around all issues related to predictability of climate finance
flows. Some lessons can be learned from the submissions on
strategies and approaches on scaling up climate finance to 2020.
Negotiators may consider recommending to the CMA to change
the reporting guidelines over time rather than letting the system
only reflect what Parties were shown to be able to report during
the pre-2020 period. Continuous or periodic technical review of
developed country Parties’ national processes could help the
guidelines adjust to improved methodologies for tracking and
allocating climate finance over time. Such a review process
might also look to identify best practices and encourage Parties
to adopt such practices into their own national processes.
42
Table 14 – Considerations for how the ex-ante reporting mandate of the Paris Agreement could be submitted
Consideration
Tradeoff 1
Tradeoff 2
Whether or not
information from the
ex-ante reporting is
submitted together
with the ex-post
reporting
Submitted as part of the same report as the ex-post
reporting process:
 Requires all forward- and backward-looking
information to be submitted at the same time
 Additional reporting burden on Parties
 ‘Locks-in’ a specific relationship between the
processes (forward reporting only becomes
available after Parties complete their ex-post
finance analysis)
Submitted as a separate, stand-alone submission:
 Allows for all forward- and backward-looking
information to be submitted at different
times, or at the same time
 Potential for relatively less reporting burden
on Parties
 Allows for the timing and relationship
between ex-post and ex-ante to be more
freely defined
7.6. Process and Format for the reporting of ex-ante
climate finance information
7.6.2. Format of the ex-ante information under the
reporting process:
The process and format through which developed country
Parties communicate their ex-ante information on climate
finance will additionally be an important factor for negotiators
to consider during process initiated at COP22. Because the
format of such reporting is highly dependent on what
substantive information is ultimately included, this subsection
only provides a cursory look at how such information could be
formatted and the process under which they are submitted.
In addition to identifying the type of ex-ante information that
developed country Parties will provide under Article 9.5 of the
Paris Agreement, negotiators in the process initiated at COP22
will need to consider how the information identified will inform
how the overall structure of the reports should be designed and
how information might be presented in either narrative or
tabular form.
7.6.1. The process through which ex-ante information
may be communicated:
Article 9.5 of the Paris Agreement states that developed country
Parties are required to “communicate indicative quantitative
and qualitative information related to… projected levels of
public financial resources to be provided to developing country
Parties” (emphasis added). Further, decision 1/CP.21 simply
states that a “process to identify the information to be provided
by Parties” is to be initiated at COP21. This outcome leaves it
open how this ex-ante new transparency process will relate to
the new ex-post reporting process. One option is that they could
be included in the same physical report (and submitted at the
same time). Another option is that they could be submitted as
separate reports (and be submitted at different times, or also at
the same time). Choosing between these options would have
important implications for when information could become
available, reporting burden placed on Parties, and impacts on
the possible relationship between time frames covered by exante and ex-post reporting. A summary of these tradeoffs is
presented in Table 14.
Narrative form, like all current climate finance reporting in the
UNFCCC, is a good basis for Parties to begin reporting their exante information. The five key areas prompted in the mandate
on strategies and approaches (see Sections 3 and 4), although
brief, did allow Parties to tailor their communications to unique
national circumstances in providing some level of ex-ante
information. However, as shown in Table 2 (Section 4.1), no
Parties submitted ex-ante information in in tabular form in their
2014 submissions on strategies and approaches on scaling up
climate finance to 2020 (although did provide tabular
information on ex-post finance). This precedent shouldn’t
preclude the possibility of utilizing tabular formats in future
reporting, although negotiators will need to consider how such
information could be presented cogently, accurately, and add
value based on what Parties can ultimately report. Table 15
provides considerations for negotiators with regards to whether
information is presented in either tabular or narrative form in
the ex-ante reporting process.
43
Table 15 – Considerations for negotiators with regards to whether information is presented in either tabular or narrative form
in the ex-ante reporting process
Consideration
Tradeoff 1
Tradeoff 2
Whether specific
types of information
is presented in either
tabular or narrative
form
Presented in tabular form:
 Good organizing tool to support information in
narrative form
 More readily comparable
 Challenging to accurately represent how
future funds may be qualified
 Standard expectations with types of
information to include
 More challenging for Parties to agree on in
establishing guidelines
 Parties could voluntarily present information
in tabular form, or it could be standardized for
all Parties
Presented in narrative form:
 Good standard basis for reporting all or most
information
 Less readily comparable
 Information is more easily contextualized
 Potential for less consistency with what Parties
report
 Easier for Parties to agree on in establishing
reporting guidelines
 Can be used to learn lessons on what info
tends to be reported and develop standard
tabular formats over time, if needed
The information Parties’ provide, however should contain some
level of quantified or quantifiable information. If Parties do not
include information in tabular form in their reports, such
information could at least be able to be aggregated and
synthesized through a centralized process, or be assessed by
observers. Returning to the common tabular format (CTF) used
in the BRs, we can see that some of categories included in Table
7 could be assessed for each Party for a given year, or be
assessed in aggregate of all Parties’ indicative future spending
plans in a given year. Table 16 provides a sample of the Biennial
Report CTF, Table 7, called “Provision of public financial
support”. Green highlighted rows represent categories that are
likely able to be aggregated for each Party and across all Parties.
Yellow rows represent categories of funds that may be less likely
to be aggregated in a meaningful way if it turns out the Parties
are unable to provide consistent data on future contributions to
multilateral channels.
Taking just the total of multilateral and bilateral funding across
all Parties, it could be possible to project total allocations for
both multilateral, bilateral, and regional channels under the
Convention. Table 17 provides an example synthesis table for
how the aggregate of projected levels finance included in
developed country Parties’ ex-ante reports could be presented.
44
Table 16 – Sample Biennial Report CTF, Table 7: “Provision of public financial support”
Green rows represent categories likely able to be aggregated for each Party and across all Parties.
Yellow rows represent categories of funds less likely to be aggregated in a meaningful way.
Allocation channels
Year
Core/
Climate-specific
general
Mitigation
Adaptation
Cross-cutting
Total contributions through multilateral
$
$
$
$
channels:
Multilateral climate change funds
$
$
$
$
Other multilateral climate change funds
$
$
$
$
Multilateral financial institutions, including
$
$
$
$
regional development banks
Specialized United Nations bodies
$
$
$
$
Total contributions through bilateral, regional
$
$
$
$
and other channels
Total
$$$$$$
$$$$$$
$$$$$$
$$$$$$
Other
$
$
$
$
$
$
$$$$$$
Table 17 – Example synthesis table for how the aggregate of projected levels finance included in developed
country Parties’ ex-ante reports could be presented
Allocation channels
Total contributions through
multilateral channels
Total contributions through
bilateral, regional and other
channels
Total
$
Year (N = current year)
N+2
N+3
$
$
$
$
$
$
$$
$$
$$
N
N+1
N+4
N+5
$
$
$
$
$
$$
$$
$$
45
8. Key Findings and Recommendations
This section details our key findings and recommendations that
stem from:
 Findings from the review of existing mechanisms under the
Convention;
 Assessment of information provided in the 2014 biennial
submissions on strategies and approaches;
 Lessons learned from actions being taken through forums
outside of the UNFCCC process
 Analysis of the national budgetary processes used by
Annex II Parties, and;
 Discussion on the feasibility of what information that
Annex II Parties could report.
Recommendations cover suggestions for (1) potential next steps
for developing guidelines under the COP for the 2016 to 2020
period, and (2) what ex-ante climate finance information could
be feasible for developed country Parties to report.
This report is intended to provide relevant information to World
Resources Institute (WRI) to utilize and formulate its own final
recommendations to UNFCCC negotiators on implementing the
ex-ante climate finance reporting requirement of the Paris
Agreement.
On general findings and recommendations:
 Compatibility: On the whole, developed country Parties’
national budgetary processes are compatible with the exante climate finance mandate of the Paris Agreement.
However, differences between Parties’ national processes
requires negotiators to consider potential political, legal,
and operational barriers to the provision of ex-ante climate
finance information. An analysis of the budgetary
processes of Annex II Parties makes clear that some level
of multiannual quantitative information is available from
most Parties. However, given that most budget processes
are designed to allocate for general ODA and not
specifically climate finance, negotiators need to consider
how the availability of such information can be utilized in
the UNFCCC reporting process.
 Levels of governance: Differences in the type of climate
finance information available at various levels of
governance should be taken into account in developing the
guidelines for reporting. Recognizing how different types
of information complements one another can aid in
improving overall transparency and predictability of future
financial flows. The primary levels of governance identified
in this report include:
o National budget processes and documentation;
o National policies and strategies;
o Department- and agency-level policies and
programmes.
 Mutual role of quantitative and qualitative information:
Quantitative and qualitative information play a mutually
supportive role to one another. Specifically, the provision
of qualitative information should be approached as a way
to ‘fill the gap’ in providing clarity where forward-looking
quantitative information is not yet available. Quantitative
information when communicated (e.g. pledges or any
quantified policy goals) should be qualified to the greatest
extent possible based on domestic budgetary planning for
how to disperse those funds (e.g. priorities, channels,
instruments, disbursement schedule, etc, to be used). This
information is key for giving clear signals developing
countries to help encourage planning and implementation
of low-emission development strategies and national
adaptation plans.
 Adjusting domestic processes to improve predictability:
Developed country Parties should be reasonably expected
to work cooperatively to improve the quality of such
information over time. Many developed countries already
provide some forward-looking information on ODA in other
forums (e.g. OECD, DAC) and are even striving to set
collective and individual goals for adjusting their national
budget processes to improve the quality of forwardlooking information. UNFCCC negotiators should consider
whether such a process could be imported into the climate
process. This might include how climate finance is more
explicitly allocated in budget documents, and how it is
quantitatively prioritized in national-, department-, or
agency-level policies and strategies.
 Definitions and methodologies: Clear collective definitions
and standard methodologies for tracking climate finance
flows is still needed to address long-term issues with
transparency and predictability. However, this need is not
a necessary condition for Parties making significant
progress on improving their national processes to more
explicitly manage climate change funding on the basis of
their nationally determined definition and methodologies.
46
synthesis and/or assessment report of the information
provided in the submissions.
8.1. Next steps for developing guidelines under the
COP for the 2016 to 2020 period
On improving the biennial submissions on strategies and
approaches in the pre-2020 period:
On actions for identifying of information to be reported
under Article 9.5 of the Paris Agreement,
 Building on mechanisms under the Convention: The
biennial submission on strategies and approaches should
be considered an existing mechanisms through which
Parties can begin to improve the reporting of ex-ante
information on climate finance in the pre-2020 period. This
would also allow for Parties to more seamlessly transition
to providing information mandated in Article 9.5 of the
Paris Agreement in post-2020 period and minimize
challenges associated with this transition period.
 Getting specific on the mandate of the process initiated at
COP22: Negotiators under the COP should carefully
consider what specific outcomes the process should seek
to accomplish before it must submit its recommendations
to CMA1. The brevity of the COP21 decision to simply
‘initiate a process’ at COP22 suggests that the outcome of
this session will be a mandate for a subsidiary body to
conduct the process from 2017 until CMA1. During 2016,
negotiators should develop a clear mandate to enable the
body to move quickly into its work in 2017.
 Adjusting the reporting mandate: Parties should further
modify the reporting mandate, as it did in COP20, for the
biennial submissions over the 2016 to 2020 period to begin
developing and testing guidelines for providing
information on “projected levels of public financial
resources”, as mandated in the Paris Agreement for post2020. For example, COP 22/23 could request improved
quality, and/or or more detailed information to be included
in these submissions for 2018. This approach is preferable
to waiting to transition to a wholly new reporting process
from-2020 because lessons can be learned earlier than
would otherwise be learned, and it is generally easier, both
legally and politically, to gradually modify existing decisions
over time than negotiating a wholly new mechanism to be
adopted from 2020. Other more detailed reporting
guidelines should also be considered in the near-term.
 Initiating a ‘technical’ process in 2016: Parties should
request a subsidiary body to begin a ‘technical process’ at
COP22 to identify the information mandated in Article 9.5
of the Paris agreement. The objective of this process, inter
alia, should be to understand the characteristics of the
budgetary process and national policies of developed
country Parties to identify what information is feasible to
report. The APA could manage this process since it is
responsible for the overall process of preparing most
aspects of the Paris Agreement prior to its entry into force,
including ex-post processes in the MRV framework.
Specific technical tasks might be delegated to the
appropriate subsidiary body for further work. 83
 Possible outcomes of the process to identify feasible exante information: The outcome of the process initiated at
COP22 could include elements additional to providing
recommended guidelines for reporting ex-ante
information. For example, the process could seek to
identify best practices in budget management and policy or
programme development and include such findings in a
summary report at the end of its mandate. The COP could
consider “encouraging” Parties to pursue such best
practices in their domestic processes to improve the
transparency and predictability of climate finance under
the Convention. Guidelines might also include best
practices for how Parties source the information they
 Compiling and synthesizing the submissions: Parties should
consider continuing and improving a centralized process to
synthesize and aggregate information provided in the
biennial submissions to clarify indicative medium-term
financial flows and other relevant aggregate information.
This type of process has been done through ex-post
processes within the Convention (such as was done by the
SCF82) and outside the Convention (such as by the OECD
DAC). In particular, Parties could request that the UNFCCC
secretariat or a subsidiary body produce a biennial
82
UNFCCC SCF. (2014). “2014 Biennial Assessment and Overview of
Climate Finance Flows Report”.
83
SBSTA may be suitable for this technical work. It was assigned to
develop the common tabular format for the BRs, and reviews
guidelines for reporting for many processes.
47
report, such as using to the extent possible department- or
agency-level annual- and multi-year planning documents,
bilateral cooperation strategy agreements, and adopted
annual and multiannual budget documentation.
Additionally, the outcome could provide recommendations
on the process through which the COP would manage the
information provided in the biennial submissions under
Article 9.5 of the Paris Agreement. For example, the
process might recommend a centralized method to
synthesize and assess the aggregate information provided
by Parties, as available, by sector, region, income level of
recipient countries, whether intended for mitigation or
adaptation, etc.84
8.2. Ex-ante climate finance information developed
country Parties could feasibly report
On information that may be feasible for developed country
Parties to provide based on their varying constraints of
their annual and multiannual budgetary processes:
 Expected levels of future public financial resources: It is
possible for most Parties to provide information their
planned contributions to multilateral channels since most
of such funds are directly allocated through the budget
process. Bilateral, regional, or other channels may be more
challenging to expect to be provided because the allocation
and management of such funds are usually controlled at
the department- or agency-level and are subject to project
planning constraints, particularly in light of the role of
‘country-ownership’ in development cooperation with
developing countries. All current climate finance pledges
should be included in ex-ante reporting which in the form
of aggregate spending levels, or thematic or regional goals.
o Qualifiers for future spending plans: Any quantitative
information should be qualified as applicable and as
available along the same categories used in ex-post
reporting. Information unique to ex-ante reporting
should include the type of spending plan (e.g. ceiling,
floor, projected, etc) and its status (e.g. committed,
pledged, indicative, etc).
 Private sector and alternative sources leveraged from
public resources: As Parties make progress on tracking of
leveraged private sector finance, and as alternative sources
are increasingly utilized, they might consider including the
scale expected to be leveraged from public resources in exante reporting. This should include both the quantity of
public and non-public resources to be used.
 Qualitative information related to scaling up climate
finance: Parties should continue to communicate
information on policies, programmes, and priorities
(including actions and plans); efforts to ensure a balance
between adaptation and mitigation; and steps taken to
enhance enabling environments as they are currently
doing under the biennial submissions on strategies and
approaches. When quantitative information is unavailable,
qualitative information can ‘fill the gap’ to clarity how
broader department and agency planning will manage
climate finance within their overall planning framework.
 Balance between the provision of quantitative and
qualitative information: Overall, the availability of
quantitative information is fairly limited in number of
future years that can be projected. Qualitative information
should be encouraged to offset this by providing clear
quantifiable goals or strategies with an associated time
frame.
 Consistency of the information provided between different
Parties’ submissions: At minimum, a common baseline and
format of the information provided should be established.
Flexibilities should be integrated into the guidelines to
encourage Parties to provide additional information as
applicable and as available. Importantly, the limitations of
a minority of Parties to report certain information or
information a given number of years out should not let
other Parties ‘off the hook’ from communicating the most
information that is available from their national processes.
 Level of accountability incumbent upon Parties for
implementing actions based on the information
communicated:
At
minimum,
all
information
communicated in ex-ante reporting should be considered
purely indicative and no information provided should be
considered committed. This approach is consistent with
84
Such synthesis processes are already done for the information
provided by developed countries on their forward spending plans
under the OECD DAC.
48
most Parties’ budget planning processes beyond one year
and would reduce the extent that donor Parties’
contributions would be misinterpreted as commitments.
The OECD DAC Survey on Donor’s Forward Spending Plans
label all future flows as indicative so there is precedent for
this in other forums.
o Committed flows could also be selectively tagged as
such ‘committed’ when applicable. “Commitments”
can be reported for the periods corresponding to the
agreements or contracts they relate to, providing
valuable qualitative and quantitative information (what
recipient countries benefit from the commitment, for
how long was this commitment made, and how the
commitment is intended to be distributed along the
commitment period).
On timing of the provision of ex-ante information:
 Timing of when reports are submitted to the Convention:
There remain important choices to be made on when exante reports are submitted. Given the timing of developed
country Parties’ fiscal years, the amount and quality of
forward-looking is directly affected by when reports are
submitted. Submitting reports biennially and alternating
with biennial ex-post reports would reduce the burden of
reporting a bit and could allow for both forward- and
backward-looking submissions cover the same periods of
time.
 Time frames covered by projected levels of public financial
resources: It’s not unreasonable for all Parties to provide
detailed quantitative information on projected levels of
climate finance up to the end of the current or next fiscal
year, depending on when reports are submitted. Less
detailed quantitative (and more quantitative) information
could be provided in the years following as available based
on countries national processes. Covering two forward
years would be quite reasonable for the majority of Parties
and this could be sequenced to cover the same periods as
the ex-post reporting process to facilitate future analysis of
finance projected and provided. Parties with longer
planning time frames should be encouraged to provide all
relevant climate finance information based on what is
available in their national processes.
 Evolution of the reporting guidelines over time: Parties
should establish a process to continue to technically review
the availability of ex-ante information by developed
country Parties in the post-2020 period. It is unlikely that
the process initiated at COP22 will definitely identify all
types of information that could be feasibly reported to
satisfy the need for improved transparency and
predictability of climate finance flows. Developed country
Party national processes will likely change in the coming
years (and should be encouraged to) to better manage
climate change finance in their overall planning processes.
An ongoing review process should work to periodically
review these changes over time and recommend best
practices to the CMA to in turn encourage all developed
country Parties to adopt.
On process and format for reporting ex-ante climate
finance information:
 Processes through which ex-ante information could be
communicated: Compared to submitting the ex-ante
information in a single document with ex-post reports,
allowing ex-ante information to be submitted as a
separate, stand-alone submission would provide important
flexibility to maximize the amount of information that
could be reported by each Party.
 Formatting of the reports: Narrative form is a good,
standard basis for Parties to submit their information
biennially. The development of common tabular formats
could be developed over time as Parties become more
familiar with the types of information commonly available
and useful for displaying in a comparable format.
 Levels of governance: Differences in the type of climate
finance information available at various levels of
governance should be taken into account in developing the
guidelines for reporting. Recognizing how different types
of information complements one another can aid in
improving overall transparency and predictability of future
financial flows. The primary levels of governance identified
in this report include:
o National budget processes and documentation;
o National policies and strategies;
o Department- and agency-level policies and
programmes.
 Mutual role of quantitative and qualitative information:
Quantitative and qualitative information play a mutually
supportive role to one another. Specifically, the provision
of qualitative information should be approached as a way
to ‘fill the gap’ in providing clarity where forward-looking
49
quantitative information is not yet available. Quantitative
information when communicated (e.g. pledges or any
quantified policy goals) should be qualified to the greatest
extent possible based on domestic budgetary planning for
how to disperse those funds (e.g. priorities, channels,
instruments, disbursement schedule, etc, to be used). This
information is key for giving clear signals developing
countries to help encourage planning and implementation
of low-emission development strategies and national
adaptation plans.
 Adjusting domestic processes to improve predictability:
Developed country Parties should be reasonably expected
to work cooperatively to improve the quality of such
information over time. Many developed countries already
provide some forward-looking information on ODA in other
forums (e.g. OECD, DAC) and are even striving to set
collective and individual goals for adjusting their national
budget processes to improve the quality of forwardlooking information. UNFCCC negotiators should consider
whether such a process could be imported into the climate
process. This might include how climate finance is more
explicitly allocated in budget documents, and how it is
quantitatively prioritized in national-, department-, or
agency-level policies and strategies.
 Definitions and methodologies: Clear collective definitions
and standard methodologies for tracking climate finance
flows is still needed to address long-term issues with
transparency and predictability. However, this need is not
a necessary condition for Parties making significant
progress on improving their national processes to more
explicitly manage climate change funding on the basis of
their nationally determined definition and methodologies.
8.3. Next steps for developing guidelines under the
COP for the 2016 to 2020 period
On improving the biennial submissions on strategies and
approaches in the pre-2020 period:
 Building on mechanisms under the Convention: The
biennial submission on strategies and approaches should
be considered an existing mechanisms through which
Parties can begin to improve the reporting of ex-ante
85
information on climate finance in the pre-2020 period. This
would also allow for Parties to more seamlessly transition
to providing information mandated in Article 9.5 of the
Paris Agreement in post-2020 period and minimize
challenges associated with this transition period.
 Adjusting the reporting mandate: Parties should further
modify the reporting mandate, as it did in COP20, for the
biennial submissions over the 2016 to 2020 period to begin
developing and testing guidelines for providing
information on “projected levels of public financial
resources”, as mandated in the Paris Agreement for post2020. For example, COP 22/23 could request improved
quality, and/or or more detailed information to be included
in these submissions for 2018. This approach is preferable
to waiting to transition to a wholly new reporting process
from-2020 because lessons can be learned earlier than
would otherwise be learned, and it is generally easier, both
legally and politically, to gradually modify existing decisions
over time than negotiating a wholly new mechanism to be
adopted from 2020. Other more detailed reporting
guidelines should also be considered in the near-term.
 Compiling and synthesizing the submissions: Parties should
consider continuing and improving a centralized process to
synthesize and aggregate information provided in the
biennial submissions to clarify indicative medium-term
financial flows and other relevant aggregate information.
This type of process has been done through ex-post
processes within the Convention (such as was done by the
SCF85) and outside the Convention (such as by the OECD
DAC). In particular, Parties could request that the UNFCCC
secretariat or a subsidiary body produce a biennial
synthesis and/or assessment report of the information
provided in the submissions.
On actions for identifying of information to be reported
under Article 9.5 of the Paris Agreement,
 Getting specific on the mandate of the process initiated at
COP22: Negotiators under the COP should carefully
consider what specific outcomes the process should seek
to accomplish before it must submit its recommendations
to CMA1. The brevity of the COP21 decision to simply
‘initiate a process’ at COP22 suggests that the outcome of
this session will be a mandate for a subsidiary body to
UNFCCC SCF. (2014).
50
conduct the process from 2017 until CMA1. During 2016,
negotiators should develop a clear mandate to enable the
body to move quickly into its work in 2017.
 Initiating a ‘technical’ process in 2016: Parties should
request a subsidiary body to begin a ‘technical process’ at
COP22 to identify the information mandated in Article 9.5
of the Paris agreement. The objective of this process, inter
alia, should be to understand the characteristics of the
budgetary process and national policies of developed
country Parties to identify what information is feasible to
report. The APA could manage this process since it is
responsible for the overall process of preparing most
aspects of the Paris Agreement prior to its entry into force,
including ex-post processes in the MRV framework.
Specific technical tasks might be delegated to the
appropriate subsidiary body for further work. 86
8.4. Ex-ante climate finance information developed
country Parties could feasibly report
On information that may be feasible for developed country
Parties to provide based on their varying constraints of
their annual and multiannual budgetary processes:
 Expected levels of future public financial resources: It is
possible for most Parties to provide information their
planned contributions to multilateral channels since most
of such funds are directly allocated through the budget
process. Bilateral, regional, or other channels may be more
challenging to expect to be provided because the allocation
and management of such funds are usually controlled at
the department- or agency-level and are subject to project
planning constraints, particularly in light of the role of
‘country-ownership’ in development cooperation with
developing countries. All current climate finance pledges
should be included in ex-ante reporting which in the form
of aggregate spending levels, or thematic or regional goals.
 Possible outcomes of the process to identify feasible exante information: The outcome of the process initiated at
COP22 could include elements additional to providing
recommended guidelines for reporting ex-ante
information. For example, the process could seek to
identify best practices in budget management and policy or
programme development and include such findings in a
summary report at the end of its mandate. The COP could
consider “encouraging” Parties to pursue such best
practices in their domestic processes to improve the
transparency and predictability of climate finance under
the Convention. Guidelines might also include best
practices for how Parties source the information they
report, such as using to the extent possible department- or
agency-level annual- and multi-year planning documents,
bilateral cooperation strategy agreements, and adopted
annual and multiannual budget documentation.
Additionally, the outcome could provide recommendations
on the process through which the COP would manage the
information provided in the biennial submissions under
Article 9.5 of the Paris Agreement. For example, the
process might recommend a centralized method to
synthesize and assess the aggregate information provided
by Parties, as available, by sector, region, income level of
recipient countries, whether intended for mitigation or
adaptation, etc.87
86
SBSTA may be suitable for this technical work. It was assigned to
develop the common tabular format for the BRs, and reviews
guidelines for reporting for many processes.
o Qualifiers for future spending plans: Any quantitative
information should be qualified as applicable and as
available along the same categories used in ex-post
reporting. Information unique to ex-ante reporting
should include the type of spending plan (e.g. ceiling,
floor, projected, etc) and its status (e.g. committed,
pledged, indicative, etc).
 Private sector and alternative sources leveraged from
public resources: As Parties make progress on tracking of
leveraged private sector finance, and as alternative sources
are increasingly utilized, they might consider including the
scale expected to be leveraged from public resources in exante reporting. This should include both the quantity of
public and non-public resources to be used.
 Qualitative information related to scaling up climate
finance: Parties should continue to communicate
information on policies, programmes, and priorities
(including actions and plans); efforts to ensure a balance
between adaptation and mitigation; and steps taken to
enhance enabling environments as they are currently
doing under the biennial submissions on strategies and
approaches. When quantitative information is unavailable,
87
Such synthesis processes are already done for the information
provided by developed countries on their forward spending plans
under the OECD DAC.
51
qualitative information can ‘fill the gap’ to clarity how
broader department and agency planning will manage
climate finance within their overall planning framework.
 Balance between the provision of quantitative and
qualitative information: Overall, the availability of
quantitative information is fairly limited in number of
future years that can be projected. Qualitative information
should be encouraged to offset this by providing clear
quantifiable goals or strategies with an associated time
frame.
 Consistency of the information provided between different
Parties’ submissions: At minimum, a common baseline and
format of the information provided should be established.
Flexibilities should be integrated into the guidelines to
encourage Parties to provide additional information as
applicable and as available. Importantly, the limitations of
a minority of Parties to report certain information or
information a given number of years out should not let
other Parties ‘off the hook’ from communicating the most
information that is available from their national processes.
 Level of accountability incumbent upon Parties for
implementing actions based on the information
communicated:
At
minimum,
all
information
communicated in ex-ante reporting should be considered
purely indicative and no information provided should be
considered committed. This approach is consistent with
most Parties’ budget planning processes beyond one year
and would reduce the extent that donor Parties’
contributions would be misinterpreted as commitments.
The OECD DAC Survey on Donor’s Forward Spending Plans
label all future flows as indicative so there is precedent for
this in other forums.
o Committed flows could also be selectively tagged as
such ‘committed’ when applicable. “Commitments”
can be reported for the periods corresponding to the
agreements or contracts they relate to, providing
valuable qualitative and quantitative information (what
recipient countries benefit from the commitment, for
how long was this commitment made, and how the
commitment is intended to be distributed along the
commitment period).
On timing of the provision of ex-ante information:
 Timing of when reports are submitted to the Convention:
There remain important choices to be made on when ex-
ante reports are submitted. Given the timing of developed
country Parties’ fiscal years, the amount and quality of
forward-looking is directly affected by when reports are
submitted. Submitting reports biennially and alternating
with biennial ex-post reports would reduce the burden of
reporting a bit and could allow for both forward- and
backward-looking submissions cover the same periods of
time.
 Time frames covered by projected levels of public financial
resources: It’s not unreasonable for all Parties to provide
detailed quantitative information on projected levels of
climate finance up to the end of the current or next fiscal
year, depending on when reports are submitted. Less
detailed quantitative (and more quantitative) information
could be provided in the years following as available based
on countries national processes. Covering two forward
years would be quite reasonable for the majority of Parties
and this could be sequenced to cover the same periods as
the ex-post reporting process to facilitate future analysis of
finance projected and provided. Parties with longer
planning time frames should be encouraged to provide all
relevant climate finance information based on what is
available in their national processes.
 Evolution of the reporting guidelines over time: Parties
should establish a process to continue to technically review
the availability of ex-ante information by developed
country Parties in the post-2020 period. It is unlikely that
the process initiated at COP22 will definitely identify all
types of information that could be feasibly reported to
satisfy the need for improved transparency and
predictability of climate finance flows. Developed country
Party national processes will likely change in the coming
years (and should be encouraged to) to better manage
climate change finance in their overall planning processes.
An ongoing review process should work to periodically
review these changes over time and recommend best
practices to the CMA to in turn encourage all developed
country Parties to adopt.
On process and format for reporting ex-ante climate
finance information:
 Processes through which ex-ante information could be
communicated: Compared to submitting the ex-ante
information in a single document with ex-post reports,
allowing ex-ante information to be submitted as a
52
separate, stand-alone submission would provide important
flexibility to maximize the amount of information that
could be reported by each Party.
 Formatting of the reports: Narrative form is a good,
standard basis for Parties to submit their information
biennially. The development of common tabular formats
could be developed over time as Parties become more
familiar with the types of information commonly available
and useful for displaying in a comparable format.
considered as an ongoing process in the post-2020 period.
This process can help Parties and observers note the
aggregate level of climate finance and how such funds may
be used. This type of process is done by the OECD DAC in
its Global Outlook on Aid reports based on its Survey of
Donors Forward Spending Plans. This process should serve
as a model for the type of process that could be developed
under the Convention. The secretariat or the SCF could be
appropriate bodies to manage this responsibility.
 Process for compiling and synthesizing information
submitted: A centralized process for compiling and
synthesizing information into a biennial report should be
53
9. Annex
9.1. Current finance reporting requirements and related COP decisions
Table 18 table outlines key reporting processes currently required for developed country Parties with regards to climate finance. The
COP decisions listed below represent primary decisions adopting and/or outlining requirements for Parties under each reporting
process. Further information about each reporting process can be found on the UNFCCC website.
Table 18 – Current finance reporting requirements and related COP decisions
Reporting
Process
National
Communications
Key Related COP
Decisions
4/CP.589 and
FCCC/CP/1999/7
Biennial Reports
1/CP.1690
2/CP.17
91
19/CP.1892
Reporting Requirements for Climate Finance 88
Adopts detailed guidelines (see decision) for the preparation of national communications.
Annex II Parties are required to report the following with regards to climate finance in
their national communications:
 Detailed information on the assistance provided for the purpose of assisting
developing country Parties that are particularly vulnerable to the adverse effects of
climate change;
 Provide any information on any financial resources related to the implementation of
the Convention provided through bilateral, regional and other multilateral channels.
Decides that developed countries should submit biennial reports. Developed countries
should report the following with regards to climate finance in their biennial reports:
 Provision of financial support to developing country Parties.
Adopts detailed guidelines on the preparation of biennial reports by developed country
Parties. Annex II Parties shall:
 describe, to the extent possible, how it seeks to ensure that the resources it provides
effectively address the needs of non-Annex I Parties;
 provide information on the financial support it has
provided, committed and/or pledged for the purpose of assisting non-Annex I Parties;
 provide summary information in a textual and tabular format on allocation channels
and annual contributions for the previous two calendar or financial years and provide
the summary information in a textual and tabular format
Adopts a detailed common tabular format for the Biennial Reports, as contained in the
annex to this decision.
88
A more thorough overview of reporting requirements for developed country Parties covering mitigation, adaptation, technology, and capacitybuilding is available on the UNFCCC website. (UNFCCC. “Reporting and Review for Annex I Parties under the Convention and the Kyoto Protocol”.)
89 UNFCCC. “Decision 4/CP.5 Guidelines for the preparation of national communications by Parties included in Annex I to the Convention, Part II:
UNFCCC reporting guidelines on national communications”. This COP decision adopted the guidelines detailed in FCCC/CP/1999/7, “Parties
included in Annex I to the Convention, Part II: UNFCCC reporting guidelines on national communications”.
90 UNFCCC. “Decision 1/CP.16, “The Cancun Agreements: Outcome of the work of the Ad Hoc Working Group on Long-term Cooperative Action
under the Convention”.
91 UNFCCC. “Decision 2/CP.17 Outcome of the work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention”.
More detailed requirements for provision of information are outlined within 2/CP.17.
92 UNFCCC. “Decision 19/CP.18 Common tabular format for UNFCCC biennial reporting guidelines for developed country Parties”.
54
Biennial
submissions on
strategies and
approaches for
scaling up
climate finance
Framework for
transparency of
support under
the Paris
Agreement
(to be
developed)
Ex-ante finance
reporting
mandate of the
Paris Agreement
(to be
developed)
3/CP.1993
Requests developed country Parties to prepare biennial submissions for the period 2014
to 2020, including any available information on quantitative and qualitative elements of a
pathway, on the following:
(a) Information to increase clarity on the expected levels of climate finance mobilized
from different sources;
(b) Information on their policies, programmes and priorities;
(c) Information on actions and plans to mobilize additional finance;
(d) Information on how Parties are ensuring the balance between adaptation and
mitigation, in particular the needs of developing countries that are particularly
vulnerable to the adverse effects of climate change;
(e) Information on steps taken to enhance their enabling environments.
5/CP.2094
Requests developed country Parties, in preparing their next round of updated biennial
submissions for the period 2016–2020, to enhance the available quantitative and
qualitative elements of a pathway, placing greater emphasis on transparency and
predictability of financial flows, as per decision 3/CP.19, paragraph 10;
The Paris Agreement establishes a transparency framework for action and support which
is to build on and enhance the transparency arrangements under the Convention (Article
13.1 & 13.3). The framework for transparency of support is to provide clarity on support
provided and received, in part, with regards to climate finance and to provide a full
overview of aggregate financial support provided (Article 13.6).
1/CP.21 and
annex: Paris
Agreement95
Specifically, developed country Parties shall provide information on support for
developing country Parties provided and mobilized through public interventions biennially
(Article 9.7 & 13.9). Information shall be submitted at least biennially (decision paragraph
90) and will undergo a technical expert review (Article 13.11).
1/CP.21 and
annex: Paris
Agreement
The Conference of the Parties serving as the meeting of the Parties to this Agreement
(CMA) shall adopt common modalities, procedures and guidelines for the transparency of
support (Article 13.13). The Ad Hoc Working Group on the Paris Agreement (APA) will
develop recommendations for these modalities, procedures and guidelines over the 2016
to 2020 period for adoption by the CMA after the Paris Agreement enters into force
(decision paragraph 91). The Subsidiary Body for Scientific and Technological Advice
(SBSTA) is to develop modalities for the accounting of financial resources provided and
mobilized through public interventions (para 57).
The Paris Agreement states that developed country Parties shall biennially communicate
indicative quantitative and qualitative information, as applicable, including, as available,
projected levels of public financial resources to be provided to developing country Parties
(Article 9.5).
The Conference of the Parties will initiate, at COP 22, a process to identify the information
to be provided by Parties with regards to this new process to provide ex-ante information
on the provision of financial resources.
93
UNFCCC. “Decision 3/CP.19 Long-term climate finance”.
UNFCCC. “Decision 5/CP.20 Long-term climate finance”.
95 UNFCCC. “Decision 1/CP.21 Adoption of the Paris Agreement”.
94
55
9.2. Overview of budgetary processes used by Annex II Parties
Table 19 provides an overview of basic budgetary information for all Annex II Parties. More detailed information on the budgetary
process for each Party is available in Section 9.3 below.
Table 19 – Overview of budgetary processes used by Annex II Parties
Annex II
Fiscal year When
When budget
Who approves the
Parties
start date
budget is
is approved
budget
proposed
Australia
1 July
November /
May
Parliament
December
Austria
1 January
November
May
Parliament
Belgium
1 January
April
December
Parliament (House
of Representatives)
Canada
1 April
February
March
Parliament (House
(interim),
of Commons)
June (final)
Denmark
1 January
August
December
Parliament
European
1 January
1 September December
European
Union
Parliament &
Council
Finland
1 January
August
December/Jan Parliament
uary
France
1 January
October
December
Parliament
Germany
1 January
June - July
December
Budget
Committee, signed
by President
Greece
1 January
October /
December
Parliament
November
Iceland
1 January
September
December
Parliament
Multi-annual budgetary timeframe, if
applicable
3 year multi-annual planning framework
4-year multi-annual budget framework
4-year multi-annual framework
Annual budget only, but has 3-year
expenditure plan for departments
4 year medium-term budgetary framework
consecutive 7-year spending plans
Multi-year framework with 2 year ceiling
projections
3-year indicative budget outline
Multi-year budget framework with a nonbinding five-year Financial Plan
December
October
Chamber of
Riksdag
Parliament
The Chancellor
4-year medium term fiscal strategy
framework
Multi-year budget framework (ceilings) for
the fiscal year and additional 2 years
3-year Medium-term budgetary framework
Multi-year budget framework (current year
and additional three years)
3-year Medium-term Fiscal Framework
4-year multiannual framework
4-year Multi-term budgetary framework
3-year medium-term budgetary framework
Multi-year budget framework (current
fiscal year plus 3 years)
Up-to-3-year multi-year planning estimates
(not covering the entire budget)
I Multi-year budget framework (current
fiscal year and additional 2 years)
Multi-year budget framework (current
fiscal year plus next two years)
3-year budgetary framework
3-year Medium-term budgetary framework
September
Congress
Annual budget only
Ireland
Italy
1 January
1 January
October
April
December
December
Parliament
Parliament
Japan
Luxembourg
Netherlands
New Zealand
Norway
1 April
1 January
1 January
1 July
1 January
January
October
September
May
January
March
December
December
December
December
Cabinet
Parliament
Parliament
Parliament
Parliament
Portugal
1 January
October
December
Spain
1 January
March
December
Council of
Ministers
Parliament
Sweden
1 January
April
mid-December
Switzerland
United
Kingdom
United
States
1 January
6 April
October
March
1 October
February
56
9.3. Budgetary processes used by Annex II Parties
Fact sheets on the budget processes for each Annex II Party is provided below. Turkey has not been included since, it has
since been removed from Annex II to the Convention.
9.3.1. Australia
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
federal parliamentary democracy and a Commonwealth realm
1 July - 30 June
November - December
May
3 year multi-annual planning framework
Parliament
Overall budget framework
The main executive arm of the Australian government is the Cabinet, which is comprised of a subset of ministers. Within Cabinet the
Treasurer and the Minister of Finance assume the principal responsibility for the budget. The annual Budget process begins in
November or December when the Expenditure Review Committee of Cabinet (ERC) considers portfolio minister’s new proposals and
expected major pressures, and establishes the Budget’s priorities. The Department of Finance is responsible for ensuring Budget
estimates. Processes and documentation are prepared and delivered in an accurate and timely manner. Portfolio Ministers can bring
forward policy proposals for consideration by government during the annual Budget process.
In May, annual forecasts are published at the portfolio and entity level (Portfolio Budget Statements - PB Statements)96 and General
Government Sector-level (GGS) (Budget Papers)97. These documents provide estimated GGS aggregates and more detailed estimates
for each entity. The PB Statements are prepared by each portfolio entity, while the Budget Papers are prepared by the Treasury and
Finance and set out the details of the Budget for the parliament and for the Australian public. The Budget Papers support the Budgetrelated decisions of government, providing the fiscal outlook for the Australian economy and highlighting major new initiatives of the
government.
The purpose of the PB Statements is to inform Senators and Members of Parliament of the proposed allocation of resources to
government outcomes by entities within the portfolio. Portfolio budget statements provide information on the proposed allocation
of resources to outcomes (for the budget year plus three). 98
Deadline
Annual Budget Process of Australia99
January
February
Mid-March
End of March to late
Mid-year review of budget estimates and budget update
Expenditure Review Committee of Cabinet (ERC) considers Budget Strategy
Portfolio budget submissions
ERC/Cabinet deliberations process
96
Australian Government – Department of Finance (2016) Guide to preparing the 2016-17 Portfolio Budget Statements Governance and APS
Transformation Group MARCH 2016. Retrieved from: http://www.finance.gov.au/sites/default/files/guidance-portfolio-budget-statements-1617.pdf?v=1. Last visited in April, 20 2016.
97 Australian Government - http://www.budget.gov.au/ (Budget Papers released every year in May)
98 World Bank (2007) Budgeting and Budgetary Institutions. Public Sector Governance and Accountability Series; ANWAR SHAH (editor). Retrieved
from: http://siteresources.worldbank.org/PSGLP/Resources/BudgetingandBudgetaryInstitutions.pdf. Last visited in March, 02 2016
99 Australian Government – Department of Finance “The Budget Process” at: http://www.finance.gov.au/resourcemanagement/budget/#budget_process
57
April
May
1 July
September-October
Early-November
Budget submitted to Parliament
Annual forecasts are published at the portfolio and entity level (Portfolio Budget Statements) and GGS-level
(Budget Papers). These documents provide estimated GGS aggregates and more detailed estimates for each
entity. The PB Statements are prepared by each portfolio entity, while the Budget Papers are prepared by
the Treasury and Finance and set out the details of the Budget for the parliament and for the Australian
public.
The Budget Papers support the Budget-related decisions of government, providing the fiscal outlook for the
Australian economy and highlighting major new initiatives of the government.
Start of fiscal year
Budget Cabinet submission and resulting budget circular
Treasurer and the Minister for Finance provide a submission to the Cabinet on the process and timetable
for the forthcoming budget. Following the Cabinet’s consideration of the submission, the Department of
Finance issues a budget circular detailing the timetable and operational rules for the forthcoming budget
formulation process.
Portfolio Additional Estimates Statements
Proposals from the Portfolio Ministries are reviewed by officials from three central agencies: the
Department of the Prime Minister and Cabinet (PM&C), the Treasury, and the Department of Finance. This
happens before being vetted by the Strategic Budget Committee (SBC) with is consisted by the Prime
Minister, the Deputy Prime Minister, the Treasurer and the Minister for Finance.
Climate finance in the budget process
Australia mainstreams climate considerations in aid programmes (ODA). Climate finance is allocated within the ODA budget and is
determined as part of the annual appropriations process. The mechanisms for this include annual appropriations bills that contain
appropriations of specified amounts for government operations. ODA annual appropriations that form part of the Budget are
accompanied by Portfolio Statements.
Australia applies a whole-of-government approach to aid delivery. This means that they utilize the individual skills, strengths and
expertise of Other Government Departments (OGDs) - including Commonwealth, State and Territory government departments and
agencies to deliver effective aid.100 Climate change activities have been mainstreamed through Australia’s aid programme. Australia
bilateral climate finance has a priority focus in the Indo-Pacific region. Australia's main contributions through multilateral funds
happens through the Green Climate Fund and the Global Green Growth Institute.
Climate finance is drawn from the following Programmes 101:
●
Official Development Assistance New programme (Programme 1.2: ODA)
○ Official Development Assistance - PNG & Pacific
○ Official Development Assistance - East Asia
○ Official Development Assistance - Africa, South and Central Asia, Middle East and Other
○ Official Development Assistance - Emergency, Humanitarian and Refugee Programme
○ Official Development Assistance - UN Commonwealth and Other International Organisations
○ Official Development Assistance - NGO, Volunteer and Community Programmes
100Australian
Government – Department of Foreign Affairs and Trade (DFAT) 2015-16 Development Assistance Budget Summary Mid-Year
Economic and Fiscal Outlook Update (as at February 2016). Retrieved from: http://dfat.gov.au/about-us/corporate/portfolio-budgetstatements/Documents/2015-16-development-assistance-budget-summary-feb16.pdf. Last visited in March, 20 2016
101Australian Government - Department of Foreign Affairs and Trade (DFAT) 2015-2016 Entity resources and planned performance DFAT Budget
Statements. Retrieved from: http://dfat.gov.au/about-us/corporate/portfolio-budget-statements/Documents/2015-16-foreign-affairs-and-tradepbs-dfat.pdf. Last visited in March, 20 2016
58
●
●
Official Development Assistance - Multilateral Replenishments
Official Development Assistance - East Asia AIPRD
Planning at operational level
The “whole-of-government approach” to providing support and building the capacity of partner governments requires the
engagement of a wide range of government agencies and non-government partners, including the Department of Foreign Affairs and
Trade, Department of the Environment, Department of Industry, Bureau of Meteorology, CSIRO, non-government organizations,
charities, and universities. 102
Commonwealth programmes are the primary vehicle by which government entities achieve the intended results of their outcome
statements. Entities are required to identify the programmes which contribute to government outcomes over the Budget and forward
years 103 . Australia’s Department of Foreign Affairs and Trade assists the Government to meet its foreign, trade and investment,
development and international security policy priorities over 2015-16 and forward years (plans until 2019) through those Programmes.
DFAT manages its bilateral cooperation through 3- to 5-year strategies known as “Partnerships for Development”.
Availability of projected levels of public financial resources
●
●
●
Australia’s expenditure control framework is based around a rolling three year estimates system.
Part of Australia’s climate finance is channeled through ODA and lies within the general ODA Budget.
Australia employs a “whole-of-government approach” to providing support which means that climate finance can
originate from different programmes from different Ministries and Departments
102
According to administrative changes announced on 18 September 2013, AusAID would cease to be an executive agency and be merged into the
Department of Foreign Affairs and Trade (DFAT). This was to take effect from 1 November 2013, with a ‘final integrated structure in place by 1 July
2014
103 Australian Government (2015) Australian Research Council 2015-2016 Budget Statement - Entity resources and planned performance
59
9.3.2. Austria
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Federal republic104
1 January - 31 December
Early November
May
4-year multi-annual budget framework
Parliament
Overall budget framework
Ministry of Finance takes a central role in all budgetary matters. The Budget Department, situated within the Ministry, co-ordinates
with the Ministry of Finance. It is responsible for general expenditure planning, general budgeting and expenditure control. 105 Some
of the special features of Austrian budget framework are that the governments come up with a four-year government coalition
agreement106, and a biennial budget planning107. Every year, the budget is submitted by the Federal Ministry for Europe, Integration
and Foreign Affairs to the parliament each year in November, in advance to the fiscal year.
The MTEF covers three future years in addition to the current budget year. This is approved with the annual Federal budget. The
expenditure side of this framework indicates the size of the financial resources that will be required during the next few years in order
to meet the commitments and goals that have already been approved. However, the budgets are enacted into law on an annual basis
by parliament.108 When the Parliament approves MTEF, it sets expenditure ceilings. The budget strategy report complementing the
framework is not voted in parliament but it elaborates further on fiscal and budgetary policies. 109
Deadline
Annual Budget Process of Austria110
May
Detailed medium-term forecasts is updated within the Ministry of Finance
June
The Ministry of Finance issues budget circulars, including expenditure ceilings for each ministry
End June and Line ministries submit allocation proposals in reply to the ceilings suggested by the Ministry of
July
Finance.
Discussions and agreement at ministerial level on expenditure ceilings for each ministry.
End August
If necessary, appeals to the Chancellor for reconciliation
September
Finalization of budget documentation
October
104
A state in which the powers of the central government are restricted and in which the component parts (states, colonies, or provinces) retain a
degree of self-government; ultimate sovereign power rests with the voters who chose their governmental representatives. (CIA The World
Factbook)
105 OECD (2005)
106 Coalition agreements: When a new government is created, it announces its major policy objectives in a document known as the “coalition
agreement”. There is no set template for the contents of these agreements, and their exact form varies each time. The coalition agreements
address budgeting issues only in broad terms, specifically by setting an explicit deficit target for each year. The Ministry of Finance provides a
budgetary forecast for the government’s term of office to inform these decisions. The agreement sets no limits on the level of expenditures, either
in aggregate or for specific sectors
107 Biennial budget planning: Austria has adopted a biennial budget planning horizon but the budgets are enacted into law on an annual basis by
parliament. Biennial budgeting must be seen as an interim substitute for a medium-term expenditure framework rather than as a preferred
method of operation. MTEF does not include biennial budget planning, but still leaves room for such procedures if the government and parliament
do choose to adopt them.
108 OECD (2007) Budgeting in Austria Journal on Budgeting Volume 7 – No. 3. Jón R. Blöndal and Daniel Bergvall (authors). Retrieved from:
http://www.oecd.org/governance/budgeting/40961371.pdf. Last visited in: April 29, 2016
109 OECD, (2007), Budgeting in Austria, Journal on Budgeting
110 OECD, (2007).
60
Late October
Early November
Late November/
Early December
Late November/
early December
Annual budget is proposed to parliament,
Finance minister gives a budget speech in the general debate on the budget (first reading).
Budget Committee examines the budget to consider any amendments to the budget.
Plenary debate and vote on each chapter of the budget (second reading).
It is a high profile event that is held throughout the week with all members of parliament and ministers
attending.
Opposition parties introduce amendments at this stage
Budget as a whole approved by parliament (third reading)
Climate finance in the budget process
Austria allocates climate finance mostly by bilateral ODA and multilateral ODA. Climate finance issues are cross-cutting with the
development and cooperation programmes. The Federal Ministry for Europe, Integration and Foreign Affairs (BMEIA) and the Austrian
Development Agency (ADA) is responsible for bilateral climate finance programmes. The Ministry of Finance allocates budgets for
multilateral climate finance. The Three-year Programme report on Austrian Development Policy published by BMEIA provides forecast
scenario for national ODA distribution.111
Planning at operational level
The Federal Ministry for Europe, Integration and Foreign Affairs (BMEIA) programs and the Austrian Development Agency (ADA), the
operational unit of Austrian Development Cooperation, is responsible for implementing the core bilateral programme. The core
bilateral programme is allocated to 11 priority recipients and 20 other cooperation countries. Bilateral co-operation agreements with
these countries are multi-year and in some cases include the level of funding over a 3- to 4-year period known as Indicative Cooperation
Programmes (Programmes Indicatif de Cooperation, PIC).
The Federal Ministry for Agriculture, Forestry, Environment and Water Management (BMLFUW) implemented a “fast-track
component” to international climate finance in order to address emerging priorities. This is additional to bilateral and multilateral
programmes of Austria. This action lead Austria to be the first developed country Party to match a project through the NAMA Registry
in early 2014.112
Austria adopts an international climate finance strategy (KFS) and establishes an inter-ministerial working group (AGIK) dedicated to
climate finance. KFS contains a matrix with an extensive work programme on issues relating climate finance, including (1) identification
of sources, (2) leveraging of sources, (3) development of qualitative and quantitative targets, (4) policy coherence, (5) application and
further development of OECD DAC Rio markers, (6) optimizing project implementation and (7) reporting. 113 AGIK is working toward a
better identification, mobilization and reporting of sources at all levels, including at the national level, in bilateral exchanges, at the
EU level, through the OECD and other fora.
Availability of projected levels of public financial resources
●
●
Austria’s Medium-term budgetary Framework covers three future years in addition to the current budget year.
The Three-Year programme on Austrian Development Policy includes projections of ODA by institution.
111
The report currently available has forecasts only up to 2015.
Austria – Submission on strategies and approaches for scaling up climate finance to 2020. 2014. Submissions of Austria
113 Ibid. Submissions of Austria
112
61
●
Bilateral programmes for development cooperation/climate finance are programmed by BMEIA and implemented
by ADA. All policies, programmes and priorities for climate finance are aligned with the international climate
finance strategy (KFS). Bilateral projects and programmes have its own three to four year plans.
62
9.3.3. Belgium
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
federal parliamentary democracy under a constitutional monarchy114
1 January - 31 December
April
December
4-year multi-annual framework
House of Representatives, strong executive branch influence
Overall budget framework
The budget process of Belgium is guided by both an annual budget and a 4-year multi-annual budget framework as a part of the
stability programmes under the EU. Each year, the Ministry of the Budget proposes a Budget Circular which sets the guidelines for the
preparation of department budget proposals. Departments draft, submit, and negotiate budgets with the Inspector of Finance and
the ministry of the Budget. After the Council of Ministers makes final decisions on the budget, the budget is submitted to the Chamber
(House) of Representatives along with accompanying documentation which includes, inter alia, a multi-year estimate.115 The Chamber
of Representatives then discusses, amends, and approves the budget while the Government reserves the right to propose its own
amendments during this final stage.
The multiannual budgetary framework (cadre budgétaire pluriannuel) is a 4-year budgetary plan which outlines macroeconomic
forecasts for the federal government. These medium-term projections are not spending plans, but are rather expected spending
projections. This is a part of the European stability programme and requires Member states to meet certain requirements in the
development and implementation of their budgets. 116
A related annual budget overview document (Exposé général), additionally outlines a 4-year forecast for general budgetary objectives,
projections of major items of expenditure and revenue (including an aggregate for primary spending departments (dépenses primaires
des départements)), and a description of policy measures planned over this period. 117 This overview document appropriates
development aid, including climate finance, primarily under its department budgets (such as Affaires étrangères et Coop.
Développement) and under a fiscal program for cooperation development (Le programme budgétaire de coopération au
développement).118 These appropriations, however, may not be provided at the program-level to forecast expenditures for specific
114
The constitution of Belgium divides the federal government into three branches: (1) an executive branch which holds some legislative power
and consists of (a) a king as the head of state, and a (b) Prime Minister, who is head of the government and appointed by the king from the majority
coalition in parliament, and (c) a Council of Ministers (cabinet), which is headed by the Prime Minister; (2) a legislative branch consisting of (a) a
Chamber (House) of Representatives which takes final decisions on lows, and (b) a Senate (upper house) which serves as an advisory chamber; and
a (3) a judiciary which interprets the constitution based on civil law. (Belgium – The Federal Authorities. Retrieved from:
http://www.belgium.be/en/about_belgium/government/federal_authorities. Last visited in March 3 2016.)
115 Belgium Government (2014) – L'exposé général du budget Service Public Fédéral. Budget et Contrôle de la Gestion. Retrieved from:
http://www.begroting.be/FR/Pages/budgetShape.aspx. Last visited: March, 1 2016
116 Belgium, Budget and Management Control – European Fiscal Framework. Retrieved from:
http://www.begroting.be/FR/Pages/EUBudgetFrame.aspx. Last visited in March 3 2016.
117 IMF – Belgium: Report on Observance of Standards and Codes - Fiscal Transparency Module. International Monetary Fund. March 2008.
118 Belgium – Budgets des recettes et des dépenses pour l'année budgétaire 2016, Exposé général. Retrieved from:
http://www.begroting.be/NL/budgetOnline/AT%20ini2016.pdf. Last visited in March 3 2016.
63
purposes.119 Because these forecasts may not approved by the Chamber of Representatives and so serve more as expected levels of
expenditure rather than baseline budgetary plans.120
Deadline
Annual Budget Process of Belgium121
April
Proposal of the Budget Circular
The Ministry of the Budget proposes a Budget Circular sets guidelines for the preparation of budget proposals
for the following year. Belgium submits its final medium-term (4-year) budgetary plan for the current fiscal year
to the EU as a part of the EU’s budget stability programme.
Budget proposals by departments to the Inspector of Finance
Each department minister develops and submits a budget proposal to the Inspector of Finance on the basis of
the guidelines in the Budget Circular. The Inspector of Finance prepares a report for the Ministry of the Budget.
Discussions between departments and the Minister of Budget
Departments and the Ministry of the Budget discuss spending included in the department proposals.
Further discussions and updates to macroeconomic forecasts
Further discussions take place on items relating to expenditures not yet decided in the bilateral meetings
between the departments and Ministry of the Budget. Updates are released on macroeconomic forecasts.
Submission of the budget to parliament
The Council of Ministers makes final decisions on the budget and submits the draft laws to House of
Representatives no later than 31 October. The budget for expenditure and revenue is proposed as two draft
laws. Accompanying documentation includes a budget overview and analysis 122, an economic report, a financial
report, and a multi-year estimate. Parliament also receives statements from ministries on expenditure decisions.
By 15 October, Belgium also submits a draft of its 4-year budget framework for the following fiscal year to the
European Union as a part of the EU’s budget stability programme.
Approval of the budget
The Chamber of Representatives discusses, amends, and approves the budget and can make amendments. The
approval of the budget is a constitutional prerogative of the House of Representatives. The Government,
executive branch, reserves the right to propose amendments to its own bills or those of parliament. Once
approved by Parliament, the budget becomes law after signature by the Government. Although Parliament has
the right to amend the budget, significant changes are generally left to the executive branch.
May
June
July to
September
31 October
November to
31 December
Climate finance in the budget process
Belgium works to mainstream climate objectives into its ODA, or development cooperation. 123 The annual budget appropriates funds
to international development aid under a distinct category, or chapter, within the budget called of Foreign Affairs and International
119
IMF, March 2008.
Ibid.
121 IMF, March 2008.
Belgium – Le cycle budgétaire. Retrieved from: http://www.begroting.be/FR/Pages/budgetCycle.aspx. Last visited in March 3 2016.
Belgium – Forme et structure. Retrieved from: http://www.begroting.be/FR/Pages/budgetCycle.aspx. Last visited in March 3 2016.
Belgium, Direction générale du Budget et des Finances –Budgets en Ligne. Retrieved from: http://www.budgetfinances.cfwb.be/index.php?id=budgets_en_ligne. Last visited in March 3 2016.
Belgium – Elaboration D’Un Budget. Retrieved from: http://www.budget-finances.cfwb.be/index.php?id=5955. Last visited in March 3 2016.
Belgium, Service Public Fédéral Budget et Contrôle de la Gestion– Le Budget online. Retrieved from:
http://www.begroting.be/FR/pages/budgetOnline.aspx. Last visited in March 3 2016.
122 Belgium – Expose General. Retrieved from: http://www.budgetfinances.cfwb.be/index.php?eID=tx_nawsecuredl&u=0&g=0&hash=43b35afb413edc6f36cf26a9e1fada1c6e0bd486&file=fileadmin/sites/dgbf/uplo
ad/dgbf_super_editor/dgbf_editor/Service_general_du_Budget/Direction_du_Budget/documents/budget_en_ligne/2016_initial_EG.pdf. Last
visited in March 3 2016.
123 Belgium’s biennial submission on strategies and approaches to the UNFCCC. 2014.
120
64
Cooperation (Affaires étrangères et Coopération Internationale). 124 The budget overview document (Exposé général) appropriates
development aid, including climate finance, primarily under its department budgets.
Planning at operational level
Belgium seeks to integrate climate change, and environment, into its development cooperation channels, programs, projects, and
agreements across its departments and agencies.125
The Directorate-General for Development Cooperation (DGD) 126 , part of the Foreign Affairs, Foreign Trade and Development
Cooperation is the primary manager of finance from Belgium in the form of ODA. In terms of direct bilateral assistance, the DGD
prepares and finances programmes, however those programmes are carried out by the Belgian Development Agency (CTB) 127. Belgium,
by law, focuses its aid on a maximum of 14 partner countries wherein cooperation is set out in multiannual programmes (programmes
pluriannuels, PPA) which are negotiated between Belgium and each partner country focusing on a maximum of 2 sectors. 128 PPAs are
governed by joint commissions and are formalized as Indicative Co-operation Programmes (PICs) which cover a period of 3 to 4
years.129
Availability of projected levels of public financial resources
●
●
●
The annual budget appropriates expenditures primarily to ODA and through Directorate-General for Development
Cooperation (DGD).
Multi-annual projections for spending at the department level are available in a budget overview document
(Exposé général) that accompanies the annual budget proposal and covers a 4-year period.
Multiannual bilateral programmes are established with Belgium’s priority partner countries in the form of 3- to 4year Indicative Co-operation Programmes (PICs).
124
Belgium – PROJET DE LOI contenant le budget des Voies et Moyens de l’année budgétaire 2016. Retrieved from:
http://www.begroting.be/NL/budgetOnline/RMB%20ini2016.pdf. Last visited in March 3 2016.
125 Belgium biennial submission on strategies and approaches to the UNFCCC. 2014.
Belgium, Affaires étrangères, Commerce extérieur et Coopération au développement – Changement climatique. Retrieved from:
http://diplomatie.belgium.be/fr/politique/cooperation_au_developpement/nos_activites/themes/climat_environnement_et_ressources_naturelle
s/changement_climatique. Last visited in March 3 2016.
126 Belgium – Directorate-General for Development Cooperation (DGD). Retrieved from:
http://diplomatie.belgium.be/fr/politique/cooperation_au_developpement. Last visited in March 3 2016.
127 Belgium – Belgian Development Agency. Retrieved from: http://www.btcctb.org/. Last visited in March 3 2016.
128 Belgium – Partner Countries. Retrieved from:
http://diplomatie.belgium.be/en/policy/development_cooperation/where_we_work/partner_countries. Last visited in March 3 2016.
129 OECD (2015), OECD Development Co-operation Peer Reviews: Belgium 2015, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264239906-en
65
9.3.4. Canada
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
parliamentary democracy, federation, and constitutional monarchy130
1 April - 31 March
February
June
Annual budget only, but has 3-year expenditure plan for departments
Parliament
Overall budget framework
The budget process of Canada sets out government expenditures through an annual budget and a multi-year planning framework for
departments and agencies. An Expenditure Management System (EMS) 131 is used as the primary framework for guiding the budget
process and this process contains two key types of documents. The first is the Budget Plan132 which is a key policy document of the
Government which provides an overall fiscal plan for revenues and expenditures. The second is the Estimates which is a set of
documents comprising of (1) the Government Expenditure Plan, which provides an overview of the requirements and changes to
expenditures of the government; (2) the Main Estimates133, which details information on the estimated expenditures requested by
each department; and (3) Departmental Expenditure Plans, which consists of two components being (a) Reports on Plans and Priorities
(RPP)134, which details specific individual expenditure plans for each department (based on the Main Estimate figures) over a 3-year
period based on the department's’ main priorities, strategies, programs, and planned results; and (b) Department Performance
Reports (DPR), which details results achieved by each department against planned performance expectations as set out in respective
RPP for the prior fiscal year. The Main Estimates serves as the legal basis for the final budget, the ‘money bills’ adopted by Parliament
annually.
Each year, the Cabinet meets with the Minister of Finance to discuss and formulate key elements of the annual budget. The Prime
Minister and the Finance Minister then receive and discuss annual appropriations requests from all departments prior to introducing
the Budget Plan, an overall fiscal plan, and the Main Estimates, detailed expenditures for departments, to Parliament. The process to
prepare both documents takes into account a pre-budget consultation process conducted by Parliament. Soon after, the Treasury
Board releases the Reports on Plans and Priorities which include detailed plans at the program level for all departments over a 3-year
period. The House of Commons regularly continues deliberations through the end of the fiscal year and so grants a special provision
(the Interim Supply) which allows the government to spend until the end of June. Parliament must then vote and approve the Estimates
by the end of the Interim Supply and is not permitted to amend the ‘money bills’.
130
As a parliamentary democracy and a constitutional monarchy, the constitution of Canada divides the federal government into three branches:
(1) an executive branch consisting of (a) the Queen who formally is vested with executive authority, and whose federal vice regal representative is
(b) the Governor General, but whose power is effective exercised by (c) the Prime Minister, who is the leader of the party with majority support in
the House (and whose ‘confidence’ must be maintained), and (d) the Cabinet whose members are appointed by the PM; (2) a legislative branch
(Parliament) consisting of (a) the Crown, and a bicameral system of (b) the Senate (upper house) and (c) the House of Commons (lower house); and
(3) a judiciary which adjudicates on the law. (Canada, Parliament – The Canadian System of Government. Retrieved from:
http://www.parl.gc.ca/marleaumontpetit/DocumentViewer.aspx?Sec=Ch01&Seq=2&Language=E. Last visited in February 28 2016.)
131 Canada, Treasury Board of Canada – Expenditure Management System of the Government of Canada. Retrieved from: https://www.tbssct.gc.ca/pubs_pol/opepubs/tb_h/exmapr-eng.asp. Last visited in February 28 2016.
132 Canada, 2015 budget – Strong Leadership: A balanced-budget, low-tax plan for jobs, growth and security. April 21 2015.
133 Canada – 2015 - 2016 Estimates: Parts I and II, The Government Expenditure Plan and Main Estimates. ISSN: 1702-5125. 2016.
134 Canada. “Reports on Plans and Priorities. Retrieved from: http://www.tbs-sct.gc.ca/hgw-cgf/priorities-priorites/rpp/index-eng.asp. Last visited
in February 28 2016.
66
With regards to influences on the budget process, there are a few important characteristics to note. The EMS system places the Privy
Council Office, the Department of Finance, and the Treasury Board in a place of particularly significant influence on the federal budget
relative to the role of the Cabinet, individual departments, and the pre-budget consultations with Parliament. 135 Notably, although
Parliament is restricted from amending the Estimates once proposed by the Treasury Board, the body does have influence on the
budget proposal during consultation period. Specifically, a vote for the Estimates is considered a ‘vote of confidence’ in support of the
current government, where a note against the bills would be considered a ‘note of non-confidence.136
Deadline
Annual Budget Process of Canada137
Late June
Cabinet Retreat I (during Parliament's summer recess)
The Cabinet meets with the Minister of Finance to discuss and review policy themes and information on the
economic and fiscal outlook.
Cabinet Retreat II (before the opening of Parliament’s fall session)
The Cabinet begins to formulate the key elements of the budget.
Consideration of New Policy Initiatives by Cabinet and Pre-Budget Consultation Process by Parliament
Departments consider new policy initiatives which are presented and reviewed by one of two Cabinet committees.
The Governor-General presents its “Speech from the Throne” outlining longer-term policy priorities.
In September, the House of Commons Committee on Finance conducts public hearings on the upcoming budget.
In December, the committee presents its report on pre-budget consultations. The House also debates budget
policy but no votes are taken.
Finalization of the Budget Proposal
The Prime Minister and Finance Minister decide on appropriations for the policy initiatives after consultations with
ministers. Exact details of the budget are only known to the PM and Finance Minister at the time it is presented to
Parliament.
The Budget and Main Estimates are presented to Parliament
The Minister of Finance introduces the Budget Plan, an overall fiscal plan for revenues and expenditures, consistent
with its strategic priorities. The President of the Treasury Board introduces the Main Estimates soon after(by March
1), which includes detailed plans for government expenditures by department or agency. Parliament begins its
examination of the budget and estimates. Both documents take into consideration Parliament’s Pre-Budget
consultation process and views on budget policy.
Reports on Plans and Priorities, and Grant of Interim Supply
The President of the Treasury Board introduces Reports on Plans and Priorities for each department which details
information on objectives, initiatives and planned results over a 3-year period. The House of Commons begins its
deliberations on the budget and grants the government a special provision called the “Interim Supply” which allows
the government to spend until the end of June.
Start of fiscal year
The government operates on the Interim Supply granted by the House of Commons until parliament approves the
budget.
Approval of budget (estimates) by Parliament (prior to Parliament’s summer recess).
Parliament votes to approve the Estimates and does not have the ability to amend the proposal.
Late
September
Fall
Early
February
February
31 March
1 April
Late June
135
Mapleleafeweb – The Federal Budget in Canada. Retrieved from: http://mapleleafweb.com/features/federal-budget-canada. Last visited in
February 28 2016.
136 Jon R. Blöndal – Budgeting in Canada. Organisation for Economic Co-operation and Development (OECD). 2001.
137 Canada – Appropriation Acts (Supply Bills). Retrieved from: http://www.tbs-sct.gc.ca/hgw-cgf/finances/pgs-pdg/aa-lc/index-eng.asp. Last visited
in February 28 2016.
Canada – The Business of Ways and Means. Retrieved from:
http://www.parl.gc.ca/marleaumontpetit/DocumentViewer.aspx?Sec=Ch18&Seq=5&Language=E. Last visited in February 28 2016.
Canada Revenue Agency – Federal government budgets. Retrieved from: http://www.cra-arc.gc.ca/gncy/bdgt/menu-eng.html. Last visited in
February 28 2016.
67
Climate finance in the budget process
The budget of Canada does not explicitly appropriate funds to climate finance, however ODA is the primary channel for it and is
referred to as “international assistance” in the budget as a set of “strategic outcomes” which includes funds from across government
departments.138 The majority of international assistance from Canada is funded under the International Assistance Envelope (IAE)
which contains budgetary allocations to multiple departments.139 Canada uses a “results-based management approach” to manage its
international climate finance across many departments (BR2). Canada also maintains a database tool to track its climate finance for
project level information.140
Planning at operational level
The majority of Canada’s development aid is managed by Global Affairs Canada (formerly Department of Foreign Affairs, Trade and
Development (DFATD)) 141 , the Department of Finance, and the International Development Research Centre (IDRC), among other
departments.142 Global Affairs Canada’s strategic planning is multi-year with allocations by channel (regional and institutional)143, and
is guided largely by the development of Countries Strategies with its partners which cover 5-year periods. 144 The Department of
Finance manages Canada’s relationships with multilateral funds and institutions (e.g. GCF, established Canadian facilities (Canadian
Climate Funds) in Multilateral Banks (IFC, IDB, ADB)). Canadian facilities for the private sector at IFC, IDB, and ADB blend funds
alongside MDB funds to enable private sector investment. Export Development Canada (EDC)145 is Canada’s export credit agency that
supports and develops Canada’s export trade by helping Canadian companies. EDC is self-financed and provides green bonds, loans,
insurance, and other financial services.
Availability of projected levels of public financial resources
●
●
●
Canada’s annual budget (the Main Estimates) are approved by Parliament in June after an interim spending bill
(the Interim Supply) is approved to cover the first 3 months of Canada’s fiscal year (which starts on April 1).
All departments submit a planning document called Reports on Plans and Priorities (RPPs), which details specific
individual expenditure plans for each department (based on the Main Estimate figures) over a 3-year period based
on the department's’ main priorities, strategies, programs, and planned results.
Bilateral cooperation is managed through 5-year strategy documents (Country Strategies).
138
Parliamentary Information Research Service – Official Development Assistance Spending. Retrieved from:
http://www.lop.parl.gc.ca/content/lop/researchpublications/prb0710-e.pdf. Last visited in February 28 2016.
139 Canada, Global Affairs Canada. “Statistical Report on International Assistance 2013 - 2014”. Retrieved from:
http://international.gc.ca/development-developpement/dev-results-resultats/reports-rapports/sria-rsai-2013-14.aspx?lang=eng. Last visited in
February 28 2016.
140 Canada – International Climate Financing. Retrieved from: http://www.climatechange.gc.ca/finance/. Last visited in February 28 2016.
141 Canada – Global Affairs Canada. Retrieved from: http://www.international.gc.ca/international/index.aspx?lang=eng. Last visited in February 28
2016.
142 OECD, DAC – 2012 DAC Report on Aid Predictability: Survey on Donors’ Forward Spending Plans 2012-2015 and efforts since HLF-4. 2012.
143 OECD – Donor Practices on Forward Planning of Aid Expenditures, Global Forum on Development - Policy Workshop on the Challenges of Scaling
Up at Country Level: Predictable Aid Linked to Results. November 2007.
144 Canada, Global Affairs Canada – Country Strategies. Retrieved from: http://www.international.gc.ca/developmentdeveloppement/aidtransparency-transparenceaide/country-strategies-pays.aspx?lang=eng. Last visited in February 28 2016.
145 Canada – Export Development Canada (EDC). Retrieved from: https://www.edc.ca/en/Pages/default.aspx. Last visited in February 28 2016.
68
9.3.5. Denmark
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Constitutional monarchy
1 January - 31 December
August
December
4 year medium-term budgetary framework
Parliament
Overall budget framework
Ministry of Finance (MF) contains Office of Finance and the Office of Negotiations. 146 Office of Finance manages both the budgets of
the ministries and policies regarding budget actions. Cabinet decides on allocation of ministerial expenditure limits in the initial stage
of the budget preparation. Other than that, the Cabinet’s decision is more of formal in nature. Any issues occurred is settled bilaterally
by Minister of Finance or the Cabinet Economic Policy Committee. Three plenary readings are held in Parliament to go through The
Finance Bill. All expenditure is annually appropriated but Multi-year estimates are not approved by Parliament. 147
Denmark has a system of coalition minority governments which places premium on achieving consensus through negotiations
between political parties, both among the coalition partners in government and with political parties outside government. The
consensus building in government manifests itself in the coalition agreement set at the beginning of each government’s term of office
and in the system of cabinet committees where the coalition parties meet to discuss and approve major policy issues. 148 There is no
set formula for how budget policy is treated in the coalition agreements but most major budget policy initiatives during a government’s
term of office will emanate from the coalition agreements.
The annual budget process starts in January each year with the Ministry of Finance presenting a draft Budget Priorities Memorandum
to the Cabinet Economic Committee.149 This short paper that discuss the total level of expenditures may or may not propose ceilings
for total expenditures for each ministry; it varies each year. The Memorandum describes the major politically sensitive expenditure
issues with which the government will have to grapple. It will outline the objectives of the government’s negotiations with the local
and regional governments.
The Ministry of Finance establishes “expenditure ceilings” for each spending ministry. 150 Each ministry then has the responsibility for
final reallocations of funds within its portfolio. This allows spending ministries wide latitude in deciding their own affairs within that
general framework. The expenditure ceilings are presented for the next year’s budget and the following three years.
Deadline
Annual Budget Process of Denmark151
January
Ministry of Finance prepares draft Budget Priorities Memorandum.
Cabinet Economic Committee and the cabinet discuss Budget Priorities Memorandum.
Cabinet formally approves Budget Priorities Memorandum.
Minister of Finance issues letters to spending ministers highlighting their maximum level of spending and specific
expenditure programmes for special analysis
Spending ministries work on their budget submissions
Special studies undertaken on specific expenditure programmes
February
March to April
146
OECD (2005)
ibid
148 OECD, (2004) Budgeting in Denmark.
149 ibid
150 ibid
151 ibid
147
69
April to May
May-June
June
August
End of August
September
Mid-September
Start October
October to Nov
Mid-November
December
Spending ministries submit proposals to the Ministry of Finance
Negotiations with spending ministers.
Negotiations with local and regional governments on the size of their block grants.
Minister of Finance submits draft budget to the Cabinet Economic Committee. Cabinet endorses draft budget.
Final adjustments (if any) to economic assumptions used in the budget
Budget presented to parliament
Finance Committee undertakes two-day technical review of budget proposal.
“First Reading”.
Second “First Reading”
The new parliamentary year formally starts on the first Tuesday of October. As a result, a second “First Reading”
of the budget proposal is performed in order for the budget to remain officially on the agenda of the new session.
Political negotiations
Second Reading
Third (final) Reading.
All proposed amendments are collected and dealt with at once during the Third (final) Reading.
Queen signs the budget act into law
Climate finance in the budget process
Denmark appropriates public climate finance mostly through the Danish Climate Envelope. This fund is guided by a balance between
1) adaptation and mitigation, 2) multilateral and bilateral contributions, and 3) geographical areas (Africa, Asia, Latin America, and
SIDS).152 The contributions are grants and all the money in the envelope has been allocated, programmed and approved.153 A basic
principle of Danish international public climate finance is that ownership is a fundamental precondition for the partnerships.
Accordingly, climate finance is provided only on demand.154
Planning at operational level
The Ministry of Foreign Affairs is in charge of climate finance related development and cooperation. Especially, the funds for climate
finance is administered by the Danish Ministry of Foreign Affairs, but the allocation suggestions are prepared by the Ministry of Foreign
Affairs and the Ministry of Energy, Utilities and Climate in a joint effort followed by approval by the Danish Government. 155 Every year,
The Danish Government elaborates a policy paper ‘The Government’s Priorities for The Danish Development Cooperation’ which
provide Denmark’s policy towards a given priority country, normally covering budget projections for a 5-year period (“Partner Country
Policy Papers”). 156 The country policy papers are prepared in collaboration between the regional department and the Danish
embassies in priority countries and are endorsed by the Danish Minister for Development Co-operation and the partner country
authorities
Availability of projected levels of public financial resources
●
●
●
‘The Government’s Priorities for The Danish Development Cooperation’ policy paper covers budget projections
for a five-year period.
Danish Climate Envelope mainly allocate climate funds to both bilateral and multilateral channels.
Climate finance is mainstreamed in the Danish development and cooperation programmes.
152
Biennial Submissions for Strategies and Approaches EU-Denmark
“The Danish Climate Envelope,” http://www.efkm.dk/node/1044
154 Biennial Submissions for Strategies and Approaches EU-Denmark
155 “The Danish Climate Envelope,” http://www.efkm.dk/node/1044
156 OECD (2014), and Danish Government, (2015) The Government’s Priorities for the Danish Development Cooperation 2016, Overview of the
Development Cooperation Budget 2016-2019.
153
70
9.3.6. European Union
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Regional Economic Integration Organization157
1 January - 31 December
September
December
consecutive 7-year spending plans
European Parliament and Council
Overall budget framework
The European Union (EU) is a political and economic partnership that represents a unique form of cooperation among sovereign
countries.158 The annual budget of the European Union establishes all of its expenditure for one year to ensuring financing of EU
programmes and actions in all EU policy areas.159 The EU budget, by law, is always balanced so expenditure must always be balanced
with revenue. 160 The decision-making procedure of the EU is similar to most national governments. 161 Based on expenditure
estimations by all EU institutions, the European Commission proposes an annual budget to both the European Parliament and
European Council to review, amend, negotiate, and adopt. Although the European Council decides the EU’s overall direction and
political priorities, it does not laws. 162 The EU’s annual budget process must fall within the annual spending limits established in a
longer-term spending plan called the Multiannual Financial Framework (MFF).
Negotiated every 7 years, the MFF is proposed by the by the European Commission and must obtain the consent of Parliament and
be adopted by the Council by unanimity.163 The MFF defines the EU’s long-term spending priorities, in line with the agreed political
priorities, and sets annual maximum expenditures on each of the six main policy areas, called 'headings', over a period of at least 5
years. The MFF is not the budget of the EU for seven years, but rather a budgetary planning tool. The current MFF covers 2014-2020,
while the previous one covered 2007-2013. The next MFF period will be 2021-2028 with legislative proposals to be drafted after
2017.164
Deadline
Budget Process of European Union165
1 July
Budget Estimation by EU Institutions
All EU institutions draw up their respective statement of estimates according to their internal procedures and
transmit them to the European Commission.
Commission’s Draft Budget
European Commission consolidates the submitted estimates by the EU institutions and prepares the Draft
1 September
157
European Union governance consists of (1) the European Parliament, which represents the EU’s citizens and is directly elected by them; (2) the
European Council, which consists of the Heads of State or Government of the EU Member States; (3) the Council of the European Union (also called
the ‘Council’, or the Council of Ministers), which represents the governments of the EU Member States and consists of government ministers; and
(4) the European Commission, which represents the interests of the EU as a whole. (The European Union Explained)
158 Congressional Research Service. “The European Union: Questions and Answers”.
159 Definitive adoption (EU, Euratom) 2015/339 of the European Union’s general budget for the financial year 2015.
160 The European Commission, Budget. “Myth and Facts”.
161 The European Commission, Budget. “Frequently asked questions”.
162 The European Union. “European Council Overview”.
163 The European Commission. “The Multiannual Financial Framework explained”.
European Commission. “Multiannual financial framework 2014 - 2020 and the EU budget 2014”.
164 European Commission. “Report from the Commission to the European Parliament and to the Council”.
165 European Commission, Budget. “How is the budget decided?”.
European Commission. “Treaty timetable”.
European Parliament, About Parliament. “Budgetary powers”.
71
1 October
mid-Nov to
early-Dec
(42 days)
21 Days
18 December to
31 December
(14 days)
Budget (DB) and submits it to the Council and the European Parliament.
Council’s Reading (1st reading)
The Council adopts its position on the draft budget, including amendments, and forwards it to Parliament.
Parliament’s Reading (1st reading)
The European Parliament adopts its position on the budget. If Parliament approves the Council’s position, the
budget is adopted at this stage.
Conciliation Committee
If the Council does not accept the Parliament’s amendments, then a Conciliation Committee is convened to agree
on Joint Text within 21 days. Parliament normally adopts amendments so the Committee is normally required.
Budget Adoption (2nd reading)
European Parliament and Council take a 2nd reading to consider adopting the joint text of the budget produced
by the Conciliation committee. If the join text is rejected by by the Council, Parliament may still decide to adopt
the proposed budget.
If, at the beginning of a financial year, the budget has not yet been definitively adopted, a sum equivalent to not
more than 1/12 of the budget appropriations for the preceding financial year may be spent each month (system
of provisional twelves).
Climate finance in the budget process
Climate finance at the EU level is contained primarily within the MFF’s “Global Europe” priority area which covers all
external action, or foreign policy, by the EU such as development assistance or humanitarian aid. The 2014-2020 MFF has
set a goal that at least 20% of the entire EU budget from 2014-2020 be spent on “climate-related actions”.166 As such,
climate action is to be mainstreamed into all major EU policies and funding instruments, and so most of the other five MFF
policy areas also contain climate-related budget allocations.167 In order to clearly track climate finance within the EU
budget, the EU has integrated a common tracking methodology for climate related expenditure based on Rio-markers168
into the budgetary procedure for measuring performance of EU programmes.169
Planning at operational level
The European Commission is responsible for managing and implementing the EU budget and the policies and programmes adopted
by the Parliament and the Council. Approximately 75% of the budget is implemented by EU Member States and local authorities. 170
Most EU institutions implement their programmes according to the annual budget, subject to the political priorities of the European
Council.
The “Agenda for Change” is strategy adopted by the EU Council to guide the policy and programming process for the 2014 - 2020
period. 171 The Directorate-General for International Cooperation and Development (DG DEVCO) is responsible for designing
international cooperation and development policy and delivering aid. The European External Action Service (EEAS) shares
responsibility with DG DEVCO on development policy. The European Commission and EEAS jointly develop Multiannual Indicative
Programmes (MIPs) for the same period as the MFF, 2014 - 2020,172 which outlines multi-year plans for each programme, including
166
European Commission. “An EU budget for low-carbon growth”.
European Commission, Climate Action. “Finance”.
European Commission. “European Commission proposal for the 2014 - 2020 Multiannual Financial Framework”.
168 OECD. “Handbook on the OECD-DAC Climate Marckers”.
169 European Commission. “Annex V - Climate tracking and biodiversity”.
170 European Council. “EU budget”.
171 European Commission, International Cooperation and Development. “EU Communication on the Agenda for Change”.
172 ECDPM. “Reprogramming EU development cooperation for 2014 - 2020”.
167
72
indicative financial allocations for different objectives. 173 National Indicative Programmes (NIPs) and Regional Indicative Programmes
(RIPs) are also developed the same period. Based on these multi-year strategies, Annual Action Programmes (AAPs) are proposed by
the European Commission and actions are funded under the annual budget.
The EU Regional Investment Facilities174 are a set of regional EU development financing facilities including ITF, NIF, LAIF, IFCA, AIF, CIF,
and IFP. The MFF and annual budget programmatic allocation as EU external action. Climate Change Windows exist in each of the
facilities. The facilities combine, or ‘blend’ grants from the EU budget, EDF, and Member State contributions with non-grant
resources.175
Notably, a few key EU institutions that provide climate finance do not use money from the EU budget. The European Investment Bank
is an autonomous institution which finances itself by issuing bonds on world financial markets.176 The European Development Fund
(EDF)177 is financed by direct contributions from EU Member States according to a contribution key and is covered by its own financial
rules. The EDF provides aid for development cooperation in the African, Caribbean and Pacific (ACP) States and Overseas countries
and territories (OCTs) and is managed by a committee.178 The European Investment Bank (EIB)179 is also not funded by the EU budget.
The EIB finances itself by issuing bonds on world financial markets and is an autonomous institution.
Availability of projected levels of public financial resources
●
●
In addition to the annual budget, the European Union approves maximum spending plans for 7-year periods
through its multi-year planning process, the MFF, which is currently set for 2014 - 2020. Indicative information on
spending plans for the majority of EU institutions and financing instruments are available in the MFF for
multilateral, bilateral, and regional spending.
Bilateral and regional cooperation are managed by EEAS and EuropeAid through National Indicative Programmes
(NIPs) and Regional Indicative Programmes (RIPs) for the same multi-year period as the MMF (e.g. 2014 – 2020).
Plans under NIPs and RIPs are funded annually through Annual Action Programmes (AAPs) under the annual
budget.
173
Concord Europe. “Guide to EuropeAid funding instruments 2014 - 2020”.
European Commission, International Cooperation and Development. “Innovative Financial Instruments (blending)”.
175 GTAI. “EU Regional Blending Facilities”.
176 (EU about pdf)
177 European Commission, International Cooperation and Development. “European Development Fund (EDF)”.
178 European Commission, Budget. “European Development Fund”.
179 European Investment Bank (EIB).
174
73
9.3.7. Finland
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Republic
1 January - 31 December
Late August
December/January
Multi-year framework with 2 year ceiling projections
Parliament
Overall budget framework
In Finland the central role in all budgetary matters is played by the Ministry of Finance who is also responsible for preparing a politically
binding budgetary spending limits for the government. Within the Ministry of Finance, the Budget department is responsible for
coordinating the budgetary activities. At the national government budget level, Finland has a well-established and binding mediumterm budget framework with multi-year spending limits.180 At the Ministry level, alongside the budget, in practice, each agency and
ministry prepares a five-year economic plan. The role of this plan is only preparatory. The ministries submit their plans to the Ministry
of Finance as a basis for budgetary and other planning. Based on these plans, the Ministry of Finance sends each ministry a report,
containing the ministry's comments on the total increase in expenditure during the five-year period in question and setting a
framework for each ministry's expenditure.181
The Ministry of Finance sends a Budget Circular in October highlighting the budgetary aspects of the coalition agreement and providing
technical standards for the submission of the budget requests then the annual budget process starts each year with spending ministries
submitting their initial budget requests to the Ministry of Finance in the form of Operating and Financial Submissions for the next year
and projections for the following three years 182. This usually happens at the end of December or early January. These plans request
funding at the level of each appropriation and are divided into two categories – continuation of existing policies (baselines) and
requests for new policy initiatives.
Deadline
Annual Budget Process of Finland183
December to
January
Budget proposal
Spending ministries send preliminary budget proposal and the plan for the following three years to the
Ministry of Finance.
Start of financial year
Discussions between Finance Ministry and spending ministries.
January
January to
February
March
April
May
July
Mid-August
Government spending limits discussion
Government decides spending limits for each ministry
Parliamentary discussion of budget policy
Spending ministries submit budget drafts to Ministry of Finance
Public release of the budget draft
Draft budgets by spending ministries and first draft of the total budget prepared by the Ministry of Finance
is released publicly
Bilateral budget discussions between Minister of Finance and other ministers
180
Hansen, T. El Rayess, M.; Irwin T., Seiwald, J. (2015) Finland Fiscal Transparency Evaluation. The International Monetary Fund
Tiihonen, P. (1990) Legal, Political and Practical Aspects of Budgetary Decision-Making in Finland. Scandinavian Political Studies, Bind 13 (New
Series)
182 OECD (2002) Budgeting in Finland PUMA/SBO(2002)8. Retrieved from: http://www1.worldbank.org/publicsector/pe/Newsletter/Finland.pdf.
Last visited in March, 2 2016
183 OECD (2002)
181
74
Late August
Early September
October to
November
December
Discussion of the budget by the Council of State
The Council of State discusses and decides the Budget proposal prepared by the Ministry of Finance in its
Budget conference chaired by the Prime Minister
Budget proposal presented to Parliament
Finance Committee processing
The budget is passed by Parliament
Climate finance in the budget process
Finland's development policy has four clear priorities, which also steer development cooperation funding. Within those priorities,
energy, water and food are part of sustainable development, including responding to climate change184. Therefore, climate financing
is part of Finland’s development cooperation funding, Finnish development cooperation is based on the national development plans
of the developing countries receiving their support. 185 Finland’s development co-operation is not underpinned by any specific
legislation; instead it is based on annual state budgets and guiding stipulations/documents. The development co-operation function
is integrated within Ministry of Foreign Affairs structure, with one horizontal department wholly mandated to development (the
Department for Development Policy), another partially devoted to development (the Department for Global Affairs) and also a number
of geographical departments covering the entirety of bilateral relations, including development, but also wider political, trade and
consular issues.
Planning at operational level
Finland operates with a system of budgeting that is based on aggregate spending limits being established for each spending ministry
as a whole and then granting autonomy to each spending ministry in allocating this aggregate amount among its various programs
and agencies. 186 Parliament approves the annual budget for development co-operation and monitors progress through three
committees: the Foreign Affairs Committee, the Grand Committee on EU Affairs and the State Finance Committee 187 Climate finance
comes out of the appropriations for development cooperation in the budget proposal.188 The MFA manages its bilateral cooperation
under 4-year Country Strategies with its partner countries.
Availability of projected levels of public financial resources
●
●
●
Finland’s budget cycle is a multi-year loop whose starting point may be set at the annual budget conference of
the Cabinet in August, where Cabinet decides upon the budget proposal for the next year.
Budgetary ceilings are decided for two following years.
Climate financing is part of Finland’s development cooperation funding and Finnish development cooperation is
based on the national development plans of the developing countries receiving their support.
184
Ministry of Foreign Affairs 2016 budget proposal. Retrieved from:
http://formin.finland.fi/public/default.aspx?contentid=332684&contentlan=2&culture=e_2. Last viewed in April 23, 2016
185 Finland’s Ministry of Foreign Affairs (2016) Finland’s Development Policy
186 OECD, 2002 Budgeting in Finland. Report of the Twenty-third Annual Meeting of OECD Senior Budget Officials. PUMA/SBO(2002)
187 https://www.oecd.org/dac/peer-reviews/39772751.pdf
188 http://www.finland.org/public/default.aspx?contentid=310414&nodeid=40958&contentlan=2&culture=en-US
75
9.3.8. France
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Republic189
1 January - 31 December
October
31 December
3-year indicative budget outline
Parliament, strong Presidential influence
Overall budget framework190
The budget process of France establishes the priorities of the government through annual appropriations which are guided by two
multi-year indicative planning processes. Each year, the President establishes a 3-year budget outline (Le programme de stabilité) as
a part of its budget stability programme which defines the overall guidelines for ministry and programme funding. 191 The Prime
Minister additionally produces a 5-year budgetary strategy (La loi de programmation des finances publiques), which is not a budget
but guides budgetary planning. The Budget Directorate then negotiates with each ministry over specific annual appropriations for the
following fiscal year based on the multi-year documents, but 3-year budget and 5-year strategy. A draft budget bill (le projet de loi de
finances initiale, PLF) is then adopted by the Council of Ministers of the Government, and the bill is sent to Parliament which then
reviews and adopts the bill with relatively constrained powers to amend. The bill is then signed by the President prior to the beginning
of the following fiscal year.
Deadline
Annual Budget Process of France192
January
Establish a Medium-Term Program (programmation à moyen terme (PMT))
Prime Minister and the Budget Directorate (Les services de la direction du Budget) establish an overall 3-year midterm budget outlining the outlook for state spending (the stability programme) which determines the broad
guidelines of the multiannual programming of public finances.
Technical Meetings with Ministries
High-level negotiations among ministers and Budget Directorate on construction of the budget and program
objectives.
Define the Budget Outline
The Prime Minister sends a framework letter (lettre de cadrage) to the Government which defines the outline of
the budgetary strategy over 5 years. After debate in Parliament, the multi-annual stability program of France
(programme de stabilité pluriannuel de la France) is sent to the European Commission.
Negotiations with Ministries
The Budget Directorate and ministries conduct budget meetings (conférences budgétaires) to examine
appropriations for each ministry, and the Prime Minister resolves points of disagreement.
Distribution of Spending Ceilings
The Prime Minister sends an expenditure ‘ceiling letter’ (lettre-plafond) to each minister which sets the level of
authorized expenditures, fixing the maximum allocation for each major public policy arena, or “mission”. There is
a debate on public finances in Parliament. The Budget Directorate and ministries meet (conférences de
répartition) to decide on distribution of appropriations between each program.
February
March/April
May to June
July to August
189
The constitution of France divides the republic into three branches: (1) an executive branch consisting of the President and the Government
(which consists of the Prime Minister and ministers) which exercise executive power; (2) a legislative branch, Parliament, consisting of the National
Assembly and the Senate which pass statutes and vote on the budget; (3) a judicial branch which evaluates the laws based upon a civil law system.
(Your Guide to the French Government)
190 France. “Forum de La Performance”.
191 France. “Le programme de stabilité 2015-2018”.
192 Vie Publique. “Quelles sont les étapes d’élaboration d’une loi de finances?”.
Donor Tracker. “France - Budget Process”.
76
September
October, first
Tuesday, to
December
Finalization of the Budget
The Council of Ministers adopt the draft Budget Act (le projet de loi de finances initiale (PLFI)). The budget is
Parliament.
Budget Review by Parliament
The budget is voted on and approved by Parliament within 70 days. Parliament has relatively constrained power
to amend the budget as proposed. The Budget Act is then signed by the President.
Climate finance in the budget process
The budget is organized by key policy areas called "Missions”, and the majority of climate finance and development assistance falls
under a single inter-ministerial Mission for “official development assistance” (Aide publique au développement). 193 France adopts an
inter-departmental policy document (Les documents de politique transversale, DPT) as a part of the annual budget which sets out inyear disbursement schedules for “missions” (ODA) and across programmes. 194
For reporting, France uses the OECD DAC definitions195 for reporting multilateral climate-specific finance via the Rio Marker system.
Each institution of France uses a slightly different methodologies for bilateral finance to determine whether a project is climaterelevant and whether its activities are mitigation, adaptation or cross-cutting.196 The French Development Agency (AFD), for example,
considers a climate project a development project which provides climate co-benefits of mitigation, adaptation, and/or support for
the implementation of climate policies.197
Planning at operational level
The Ministry of Foreign Affairs (MAE) is responsible for France's diplomatic and development initiatives, and for developing sectoral
strategies, including bilateral and multilateral aid.198 The French Development Agency (AFD)199 is the primary agency responsible for
formulating, financing, managing and supervising projects, while MAE is involved in policy development and monitors projects. AFD is
the principal operator of French bilateral support. AFD uses 5-year partnership framework documents (Document Cadre de
Partenariat, DCPs) as the main planning instruments for ODA, and climate finance, for programming at the country level. DCPs are
prepared with partner countries ‘under authority of the French ambassador’ with indicative funding focused on up to 3 sectors and
defines agreed activities.200 The French Global Environment facility (FFEM)201 is a bilateral fund funded by France and its resources are
renewed in 4-year cycles.
193
Donor Tracker. “France - Budget Process”.
France – Projet de loi de finances pour 2015. Retrieved from: http://www.performancepublique.budget.gouv.fr/sites/performance_publique/files/farandole/ressources/2015/pap/pdf/PLF2015.pdf. Last visited in March, 3 2016.
194 Donor Tracker.
195 OECD. “Treatment of Climate-related Multilateral Flows in DAC Statistics and Status Reporting”.
196 France BR2.
197 France BR2.
198 Donor Tracker. “France - Budget Process”.
199 Agence Française de Développement (AFD).
200 Donor Tracker.
OECD. “2014 Global Outlook on Aid: Results of the 2014 DAC Survey on Donors’ Forward Spending Plans and Prospects for Improving Aid
Predictability”.
OECD. “OECD Development Co-operation Peer Review: France 2013”.
France. “Framework Document for Development Cooperation, 2013 - 2017”.
201 Fonds Français pour l'Environnement Mondial (FFEM).
77
Availability of projected levels of public financial resources
●
●
●
The annual budget of France sets funding allocations for programme and by the 6 key policy areas, “missions”,
which includes ODA (the primary channel for climate finance). Annually, France adopts an inter-departmental
policy document (DPT) as a part of the annual budget which sets out in-year disbursement schedules for
“missions” (ODA) and across programmes.
For multi-year planning, France maintains a 3-year budget outline which indicatively defines the overall guidelines
for ministry and programme funding. France additionally maintains a 5-year budgetary strategy, which guides
budgetary planning.
France develops 5-year bilateral partnership framework documents (DCPs) as the main planning instruments for
ODA, and climate finance, which forecasts expenditure within partner countries. DCPs are developed in
conjunction with partner countries and so publication dates vary.
78
9.3.9. Germany
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Parliamentary republic
1 January - 31 December
June - July
December
Multi-year budget framework with a non-binding five-year Financial
Plan
Budget Committee and signed by the Federal President
Overall budget framework
Within the Federal government, responsibility for budget issues rests with the Federal Minister of Finance (MF). MF collaborates with
the Federal Minister of Economics in overall economic projection. Germany produces a Financial Plan that contains fiscal projections
and plans for a five-year period – the current year, the upcoming budget year, and the following three years. 202
The annual budget cycle starts in late February early March, when the cabinet decides on the ceiling for the overall federal budget and
each envelope based on the Finance Ministry's tax revenue projections 203. On this basis the ministries develop their internal budget
allocations. The Financial Plan is adopted by the federal government and submitted to parliament alongside the draft budget in August
each year. The Financial Plan, coming late in the budget formulation process and submitted formally to parliament, is a living policy
document drawing together a number of separate but related strands of budgeting that concern the multi-annual dimension. The
multi-year allocations from the government’s benchmark figures decision of March are repeated, adjusted and updated as necessary
to reflect developments and negotiations. The underlying figures at line-item level have, by the time of the Financial Plan, been settled
at the official level for the full five-year period of the Plan and for the upcoming budget year. They are identical with the budget
approved by cabinet at the same time. After negotiations within the Cabinet and a first reading in Plenary in September, the draft is
debated in the corresponding committees.
Development assistance falls within the Committee on Economic Cooperation and Development (AwZ). Each party group has the right
to propose amendments for the AwZ to vote on. The adopted requests for amendments are non-binding recommendations that are
subsequently sent to the Budget Committee. The Budget Committee agrees on a final version of the budget, which is then voted on
in Plenary in November. The budget of the Federal Ministry for Economic Cooperation and Development (BMZ) is contained in the
German national budget204. The BMZ (Federal Ministry for Development and Cooperation) has its own budget envelope, which forms
part of the federal budget and denotes expenditure items for the running year but the decisions and recommendations of the Budget
Committee determines the volume and general structure of the BMZ budget, since the Budget Committee prepares all the decisions
the German Bundestag (Parliament) takes concerning the budget.
Deadline
December
(previous year)
Annual Budget Process of Germany205
Preparations for the coming fiscal year
While the formal approval of the Budget Act for the next year is being concluded in parliament, the
Federal Ministry of Finance begins technical consultations with the line ministries, inviting them to
update the figures in the PFM System for the next budget year as well as the figures for the other
202
OECD (2014) Budget Review: Germany. OECD Journal on Budgeting, Volume 2014, Issue 2
Federal Ministry for Economic Cooperation and Development (BMZ). BMZ Budget. Retrieved from:
http://www.bmz.de/en/ministry/budget/index.html. Last visited in March, 3 2016
204 Donor Tracker - Country Profile Germany. Retrieved from: www.seekdevelopment.org/seek_donor_profile_germany_april_2012.pdf. Last
visited in March, 3 2016
205 OECD (2014)
203
79
years previously included in the Financial Plan. Line ministries can also raise new policy priorities
which may have implications for the overall funding envelope, and the Federal Chancellery also
makes its views known on priority issues.
January to March
March
April to May
June – July
August
September
October
November
December
Start of fiscal year and talks between the Ministries.
Federal Ministries submit their bids for the budget and planning years to the Ministry of Finance The
government’s official economic forecasts and federal revenue forecasts for the year ahead are finalized. The
Federal Ministry of Finance make efforts to accommodate new policy priorities within the permitted resource
level.
Cabinet agrees on caps for federal and ministerial budgets
The cabinet agrees the Benchmark Figures setting out the aggregate and sectoral expenditure limits and
revenue figures, consistent with the fiscal constraints, and within which the ongoing budget negotiations must
be concluded.
Negotiations within the Ministries
Detailed budgetary discussions take place between the Federal Ministry of Finance units and their
counterparts in the line ministries, on the detail of their allocations and policies
Budget draft is submitted
Ministries submit draft budget and non-binding five-year Financial Plan. Cabinet reaches decision on the draft
Federal Budget.
The Government's budget plus financial plan is submitted to Parliament
The draft federal budget is submitted by the government to the Bundestag and the Bundesrat, along with the
five-year Financial Plan.
First reading in plenary. Development Committee discusses draft and proposes amendments
Budget rapporteurs review amendments and make recommendations to Budget Committee
The Budget Committee of the Bundestag considers the draft budget. Rapporteurs from the Budget Committee
have detailed discussions with the various ministries on the budget proposals. Amendments and further
specifications or conditions may be put forward
Budget Readings
Budget Committee decides on amendments. The draft budget goes through second readings in the Bundestag
and the Bundesrat with decisions on each ministerial budget. Third reading in Plenary and vote and adoption
- A final “settlement session” is held in the Budget Committee of the Bundestag, at which all outstanding issues
must be resolved in advance of the final reading and passage.
Budget Approval
Budget reviewed by second chamber and signed by Federal President. Ministry of Finance gives detailed
instructions to Federal Ministries concerning next year’s budget preparations and adjustment of medium term
financial plan. The Budget Act for year current year is signed into law by the Federal President. Meanwhile the
new budget cycle for will have commenced.
Climate finance in the budget process
The German government sees climate finance as a part of development finance and bilateral cooperation is the main focus of
Germany’s climate finance. The main part of the funds come from the Federal Ministry for Economic Cooperation and Development
(BMZ). 206 Other part comes from the International Climate Initiative set up by the Federal Ministry for Environment (BMU), an
instrument which is financed from auctioning revenues from the Emission Trading Scheme 207 and thus keeps resources within the
climate change policy cycle. BMU also receives funding for cooperation on climate issues from the federal government’s Special Energy
and Climate Fund (EKF), which is financed from revenue from the auction of emissions allowances. In addition to climate financing
206
Ministry of the Environment, Nature Conservation, Building and Nuclear Safety and Ministry for Economic Cooperation and Development (BMZ)
(2015) International Climate Finance: Germany Contribution. Retrieved from:
https://www.bmz.de/en/publications/topics/climate/climate_finance.pdf. Last visited in: March 3, 2016
207 Market instrument of the Kyoto Protocol. For more information see: The German Emissions Trading Authority (DEHSt) at the German
Environment Agency at - https://www.dehst.de/EN/Home/home_node.html
80
from official budget funds, Germany contributes significant amounts by leveraging market funds provided through KfW, Germany’s
National Development Bank.208
Planning at operational level
The budget for development co-operation of the federal government is established on the basis of the annual federal budget and a
rolling financial plan covering a 4-year period ahead. Germany’s aid allocation policy is debated in the parliament’s Committee for
Economic Co-operation and Development and the Budget Committee. The ODA budget is administered for the most part by the
Federal Ministry for Economic Co-operation and Development (BMZ). Other Ministries include the Federal Ministry of Finance (EC
budget, debt relief), the Federal Foreign Office (mainly humanitarian aid) and the Federal Environment Ministry (climate protection in
developing countries). Part of German ODA is provided by the federal states (Bundesländer).
In cooperation with partner countries and advised by KfW Development Bank and GIZ 209, BMZ decides every two years on its bilateral
assistance priorities for each country. Based on regional strategies, country strategies are developed, giving up to three priority sectors
and setting funding ceilings for each two-year period (known as Country Strategy Papers (CSP) and National Indicative Programmes
which can cover 2- to 4-year forward periods). On this basis, government negotiations with partner countries take place to agree on
sectors and level of funding. BMZ then develops sector strategy papers establishing goals and success indicators for each of the priority
sectors agreed upon.210 Based on the sector strategy papers, KfW and GIZ develop project proposals, which have to be approved by
BMZ before a project is implemented. While financial cooperation projects are carried out by local partners, technical cooperation is
mainly delivered by GIZ as tied aid211 (according to the definition by OECD DAC).
Availability of projected levels of public financial resources
●
●
●
Germany produces a Financial Plan that contains fiscal projections and plans for a five-year period – the current
year, the upcoming budget year, and the following three years.
Germany’s aid allocation policy is debated in the parliament’s Committee for Economic Co-operation and
Development and the Budget Committee. The ODA budget is administered for the most part by the Federal
Ministry for Economic Co-operation and Development (BMZ)
The German government sees climate finance as a part of development finance and bilateral cooperation is the
main focus of Germany’s climate finance. The main part of the funds come from the Federal Ministry for Economic
Cooperation and Development (BMZ) with other resources coming from Ministry for Environment (BMU), the
Climate Fund (EKF) and through KfW, Germany’s National Development Bank.
208Germany
Federal Ministry of Development and Cooperation - Financing climate action. Retrieved from:
http://www.bmz.de/en/what_we_do/issues/klimaschutz/climate-finance/index.html. Last visited in: March 3, 2016
209 German Federal Enterprise for International Cooperation. For more information see: https://www.giz.de/en/html/index.html
210 Germany Federal Ministry of Development and Cooperation - The German Government 14th Development Policy Report. Development Policy
White Paper. Retrieved from:
http://www.bmz.de/en/publications/archiv/type_of_publication/information_flyer/information_brochures/Materialie223_Weissbuch_large.pdf.
Last visited in: March 3, 2016
211 “Tied aid” - Offering aid on the condition that it be used to procure goods or services from the provider of the aid. For more information see:
(http://www.oecd.org/dac/untied-aid/)
81
9.3.10. Greece
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Parliamentary Republic
1 January - 31 December
October/November
December
4-year medium term fiscal strategy framework
Parliament
Overall budget framework for climate finance
The Greek budget process is characterized by an annual budget (State Budget, Κρατικός Προϋπολογισμός)212 that is managed
alongside a 4-year framework for limiting the government’s deficit and debt, and a 4-year fiscal strategy. The General Accounting
Office (GAO) in the Ministry of Economy and Finance is the central authority and is responsible for the annual budget preparation.213
Greece submit to the EU a consecutive 4-year Stability and Growth Programme which sets out how the government will limit the
growth in its deficit and debt over the medium term (e.g. 2011 to 2014). 214 Greece also utilizes a rolling 4-year Medium Term Fiscal
Strategy Framework (MTFS, e.g. 2012 – 2015) as means to transition to using multi-year budgets.215 The annual budget is considered
to be a part of the overall medium-term policy framework and is monitored by the Parliament. The MTFS contains, inter alia, mediumterm targets for the general government and individual entities, the total expenditure ceilings for the general government and the
upper ceilings of the state budget, and estimated expenditures of the central government per ministry for the next budget year and
the expenditures for the period.
Deadline
Annual Budget Process of Greece216
January - February
Update of the macroeconomic forecasts
Macroeconomic forecasts are updated for the 3 years forward.
Cabinet meets
The Council of Ministers (Cabinet) discusses the overall budget position of the government and decides on
main fiscal parameters.
Budget circular
The Budget Directorate in the GAO, Ministry of Economy and Finance (MOEF) sends out the budget circular
is sent to line ministries and regions, and contains the main fiscal policy targets and overall fiscal policy
parameters.
Investment budget circular
Directorate for Public Investment sends out its own budget circular with instructions for investment
expenditure.
Budget submissions from Ministries
Line ministries submit their budget requests to GAO and Directorate for Public Investment. Discussion begin
with the ministries to finalize budget requests.
Draft budget executive summary proposal
Preliminary draft budget executive summary is submitted to Parliament for discussion and feedback.
Early spring
May
June
Mid-June
October (first
Monday)
212
http://www.minfin.gr/?q=el/content/%CE%BA%CF%8E%CE%B4%CE%B9%CE%BA%CE%B1%CF%82%CE%BA%CE%B1%CF%84%CE%AC%CF%84%CE%B1%CE%BE%CE%B7%CF%82-%CE%B5%CF%83%CF%8C%CE%B4%CF%89%CE%BD%CE%BA%CE%B1%CE%B9-%CE%B5%CE%BE%CF%8C%CE%B4%CF%89%CE%BD-2016
213 OECD, 2008, p. 13.
214 http://www.minfin.gr/?q=el/policy-reforms/stability-and-growth-programme
215 http://www.minfin.gr/?q=en/content/medium-term-fiscal-strategy-2012-2015
and http://www.minfin.gr/sites/default/files/financial_files/MTFS.pdf
http://www.minfin.gr/sites/default/files/financial_files/MTFS.pdf
216 OECD. “Budgeting in Greece”. 2008.
82
21 November
December
Draft budget submitted to Parliament
Ministry of Economy and Finance submits its draft budget to Parliament. Parliament discusses the budget but
changes in expenditures or revenues are rarely made.
Budget approved
Budget is voted in Parliament.
Climate finance in the budget process
Greece provides climate finance principally through bilateral and multilateral channels through its development cooperation efforts
in the form of ODA. Environmental issues such as climate change finance are managed as cross-cutting objectives in programmes,
projects, and policies.217
Planning at operational level
Coordination of bilateral and multilateral development cooperation is managed by the Ministry of Foreign Affairs (Υπουργείο
Εξωτερικών)218, and specifically by the General Directorate for International Development Cooperation (Hellenic Aid, ΥΔΑΣ).219 The
Ministry of Economy 220 is responsible for contributions to multilateral institutions. Line Ministries are responsible for
sectoral/thematic contributions to related United Nations Conventions and their Secretariats. 221 Greece uses 5-year development
assistance programmes in partner countries. These programmes are known as Five Year Development Co-operation and Assistance
Program of Greece (PPASBE) and cover total bilateral and multilateral assistance that would be granted during the years covered (e.g.
2011 – 2015).222
Availability of projected levels of public financial resources
●
●
●
●
The annual budget of Greece is approved by the start of each calendar year. The annual budget is considered to
be a part of the overall medium-term policy framework
Greece utilizes a rolling 4-year Medium Term Fiscal Strategy Framework (MTFS) to set medium-term targets for
the general government and line ministries.
Within both the annual and multi-annual budget planning processes, climate finance is managed as a cross-cutting
objective within its ODA portfolio.
Greece uses 5-year development assistance programmes in partner countries which covers much of Greece’s
bilateral and multilateral assistance.
217
Greece NC6.
Greece, Ministry of Foreign Affairs, http://www.mfa.gr/
219 http://www.oecd.org/development/pcd/38023102.pdf
and http://www.mfa.gr/en/the-ministry/structure/hellenic-aid.html
220 http://www.mindev.gov.gr/ - Ministry of Economy, Development and Tourism (Υπουργείο Οικονομίας, Ανάπτυξης και Τουρισμού)
221 Greece NC6
222 http://www.hellenicaid.gr/images/stories/english-docs/annual-reports/english-r-2006-5.pdf
http://www.hellenicaid.gr/images/stories/docs/diethnes_plaisio/10-greece_memorandum2011.pdf
218
83
9.3.11. Iceland
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Parliamentary republic223
1 January - 31 December
September
December
Multi-year budget framework (ceilings) for the fiscal year and
additional 2 years
Parliament
Overall budget framework
Iceland’s parliament is called Althingi. The Prime Minister is the Head of the executive. Althingi and the President of the Republic
jointly hold legislative power.224 The Prime Minister with the cabinet, he or she exercises most executive functions. 225 In preparing the
national budget, the chairman and vice-chairmen of the budget committee is responsible for the national budget process. The role of
parliament is generally to serve as a check upon the executive branch, both the Government (e.g. by means of questions to Ministers),
and the administration as a whole.226
Iceland has rolling Medium-term Fiscal Strategy (MTFS) which calls on the government to submit a three-year budget framework for
approval by the Parliament. The multi-year budget ceiling is approved by the Althingi to be used as a basis for the preparation of
individual budget for the coming fiscal year.227 MTFS is required to include central unallocated provision and at least 1 percent of
expenditure should be restricted for any emergencies that arise during the budget year.
Deadline
Annual Budget Process of Iceland228
January
February
March
April
May
June
July
August
September
October
November
December
Ministry of Finance (MoF) prepares initial fiscal projections
MoF prepares initial Medium-term fiscal Strategy
Ministries submit initial proposals StatIce (Statistics Iceland) 1st macro forecast
MoF submits revised MTFS & budget frames to Cabinet
MoF issues budget circular based on MTFS ceilings
Ministries submit budget requests to MoF within MTFS ceilings
StatIce 2nd macro forcast
MoF prepares Fiscal Strategy & Budget
Cabinet approves Fiscal Strategy & Budget
First Reading: MoF shall present a fiscal budget bill to Parliament
Second Reading: StatIce 3rd macro forecast
Third Reading: Budget approved
223
Type of republic that operates under a parliamentary system of government where the executive branch (the government) derives its legitimacy
from and is accountable to the legislature (the parliament).(See Wikipedia: https://en.wikipedia.org/wiki/Parliamentary_republic)
224 Althingi, (2013) Althingi, retrieved from http://www.althingi.is/pdf/Althingi2013_enska.pdf.
225 Inter-Parliamentary Union, Iceland – Althingi, http://www.ipu.org/parline-e/reports/ctrlparlementaire/2143_f.htm
226 Althingi, (2013)
227 T. A., Organic, N., & Law, B. (2012). Iceland Toward a New Organic Budget Law, (12).
228 T. A., Organic, N., & Law, B. (2012).
84
Climate finance in the budget process
Iceland’s climate finance is allocated in a form of ODA. ICEIDA, an agency under the authority of the Ministry for Foreign Affairs focusing
on development assistance is the core actor in allocating climate related ODA. Iceland maintains to focus its fund to multilateral ODA
in multilateral organizations; the World Bank, UNICEP and UN Women. 229
Planning at operational level
In June 2011, the Icelandic parliament adopted a parliamentary resolution on a Strategy for Iceland’s Development Cooperation 20112014. In 2013, the parliament extended it to 2016. 230 One of the priority areas in the new strategy is environmental sustainability
which has been identified as a cross-cutting theme. As a part of this priority area, climate change related development efforts will play
an increasingly important role. 231
Top authority for Iceland's international development cooperation is devolved in the Minister for Foreign Affairs. The Ministry for
Foreign Affairs is in charge of 60 percent of Iceland’s ODA and ICEIDA is in charge of 40 percent. Ministry allocates funds for multilateral
cooperation and ICEIDA devotes in bilateral cooperation programmes (known as Country Strategy Plans). Every two years the Minister
submits a proposal for a parliamentary resolution concerning the Icelandic Government's Programme on International Development
Cooperation for a four-year period. This Strategy for Iceland’s Development Cooperation proposal covers multilateral and bilateral
cooperation, humanitarian assistance and peace-building efforts. 232 ICEIDA has long-term strategic papers for bilateral country
development aid programmes in their website.233
Availability of projected levels of public financial resources
●
●
●
Long term Country Strategy papers are provided by ICEIDA. Strategy for Iceland’s Development Cooperation
proposal by the Ministry covers multilateral and bilateral cooperation, humanitarian assistance and peacebuilding efforts.
The Ministry for Foreign Affairs is in charge of 60 percent of Iceland’s ODA and ICEIDA is in charge of 40 percent.
Ministry allocates funds for multilateral cooperation and ICEIDA devotes in bilateral cooperation programmes.
Iceland has an Icelandic Government's Programme on International Development Cooperation for a four-year
period.
229
OECD, (2013) Iceland Special Review
UNFCCC, (2013) Iceland’s Fast Start Finance
htps://unfccc.int/files/cooperation_support/financial_mechanism/fast_start_finance/application/pdf/120622_fsf_submission_iceland.pdf
231 UNFCCC, (2013) Iceland’s Fast Start Finance
htps://unfccc.int/files/cooperation_support/financial_mechanism/fast_start_finance/application/pdf/120622_fsf_submission_iceland.pdf
232 Ministry of Foreign Affairs, (2013) Strategy for Iceland’s Development Cooperation 2013-2016, Retrieved from
http://www.iceida.is/media/pdf/MFA-StrategyforIcelandsDevelopmentCooperation-2013-2016-Fact-Sheet.pdf
233 See ICEDA website, http://www.iceida.is/english/publications/# .
230
85
9.3.12. Ireland
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Republic, parliamentary democracy234
1 January - 31 December
October
December
3-year Medium-term budgetary framework
Parliament
Overall budget framework
The Minister of Finance is center of budgetary matters. It is responsible for public expenditure and revenue. 235 The Public Expenditure
Division in the Department of Finance (DF) is in charge of general public expenditure policy and the control of expenditure by
government departments and agencies. The Prime Minister (Taoiseach) manages overall direction of Cabinet meetings and plays
important role in government decision makings. 236 The Cabinet decides on expenditure issues and has the final decision authority on
specific taxation changes and final adjustments to spending plans.237
Ireland operates a cash based accounting system for government accounting within an annual cycle. However, the annual Budget cycle
takes place within the context of a medium term budgetary framework. This document works like a procedural manual and sets official
macroeconomic and budgetary forecasts for the coming three years. 238 In addition, medium-term expenditure ceilings are set also at
ministerial level.
The annual Budget and the role of the Houses of the Oireachtas in approving expenditure by Government Departments can be
considered in three distinct phases: Pre-Budget Day; The Budget Day statement; and Post-Budget Day. Budget Day motions are
traditionally seen as a motion of confidence in the Government and failure to pass them would normally see the Government resign.239
The budget statement is delivered in the Dail (a lower House of the legislature) The government’s annual expenditure estimates are
presented to both Dail and Seanad (upper house) but Dail only has the authority to amend legislation involving public monies but not
estimates. Seanad does not debate on the budget but it goes over the annual Finance Bill (taxation) and Appropriation Bill
(expenditure) and could give recommendation to the Dail. 240 In this situation, Dail has no obligation to follow the recommendations .
Deadline
Annual Budget Process of Ireland241242
late April
EU Stability Programme Update (SPU) is published by the Department of Finance.
It sets out the Government’s budgetary strategy in the context of the fiscal rules (both domestic and EU)
It is based on revisions to economic growth forecasts and projects high level Budget figures for the subsequent
three years.
Governemtn publishes Spring Economic Statement sets out the broad parameters for macroeconomic growth and
234
A political system in which the legislature (parliament) selects the government - a prime minister, premier, or chancellor along with the cabinet
ministers - according to party strength as expressed in elections; by this system, the government acquires a dual responsibility: to the people as
well as to the parliament. (retrieved April 1, 2016, from CIA Fact Book, https://www.cia.gov/library/publications/the-worldfactbook/docs/notesanddefs.html?fieldkey=2128&term=Government%20type)
235 OECD (1995)
236 ibid
237 ibid
238 Department of Finance (2014) Medium Term Budgetary Framework.
239 239 Houses of Oireachtas, (2015)
240 OECD (1995)
241 241 Houses of Oireachtas, (2015) p. 2
242OECD, (n.d.) Oireachtas Éirean, retrieved from https://www.oecd.org/gov/budgeting/42467060.pdf
86
July
During the
Summer
September
October
October
October
November
December
the fiscal outlook and constraints over the medium term (5 years)
The call for submissions for the expenditure estimates process
Budgetary Strategy Memorandum prepared by the Minister for Finance for the Government:
The Department of Finance assesses budgetary and economic outlook into the medium term. It reviews the
current year (i.e. year N-1) and prepares projections of revenues and expenditure years (i.e years N to N+2).
Department Negotiations with Department of Public Expenditure and Reform (DEPR)
Bilateral meetings between Government department and DEPR
They outline their spending plans for the following year taking into account their spending limits set out in the
medium-term expenditure programme.
DEPR agrees on proposed Estimates for Public Services for approval by Cabinet.
Estimates on Receipts and Expenditure (White paper on receipts and expenditure) is presented to the Dail
The White paper sets out the expected expenditure and revenue for the following year based on existing policy
prior to any new policy measures announced in the Budget.
-Draft budgetary plan (DBP) forwarded to the European commission
Two distinct speeches
The Financial Statement by the Minister for Finance. It outlines the general economic and fiscal outlook and the
tax changes in the Budget
The Expenditure Statement by the Minister for Public Expenditure and Reform. The spending changes are
presented to the Dail.
Financial Resolutions are passed by the Dail. It gives immediate effect to some of the budgetary changes such as
taxes and changes that come into operation for the 1st of January.
Financial Resolutions passed on Budget Day must be confirmed by the passing of the Finance Act within four
months of the Budget for the relevant tax measures to remain in effect.
Estimates for Publish Services (spendings) published
The Estimates will set out the amount planned to be spent in each Vote in the next year with a comparison to the
Estimates in the current year.
The European Commission examines and gives an opinion on the draft Budget
Finance Bill (tax changes of the budget) is published and debated in the Oireachtas
Finance Bill passed by Dail, REV published
Revised Estimates for Public Services is published for more details. (the final actual amount spent is still slightly
uncertain)243
Climate finance in the budget process
The Department of the Environment, Community and Local Government (DECLG) has contributed in climate finance during the FastStart Finance period. 244 Approximately 80% of Ireland’s ODA budget is managed by the Department of Foreign Affairs and Trade
through Vote 27 – International Co-operation.245 Climate finance returns are included in Ireland’s overseas development programme.
246
Irish Aid allocated climate finance in grant based support for climate action in developing countries. 247 The Department for
Agriculture, Food and Marine (DAFM) also provides public finance for climate action in sectors of climate mitigation or adaptation
and/or food security.248
243
L & RS note, p. 6
Submissions or Ireland p. 48
245 OECD (2014)
246 Submissions of Ireland p. 48
247 Biennial Submission for Strategies and Approaches of Ireland
248 ibid
244
87
Planning at operational level
In May 2013, the government of Ireland launched its new policy for international development, “one World, one Future,”
and it includes “Climate Change and Development.” 249 The policy is to bring sustainability and to ensure that Ireland’s
interventions bring real benefits over the long-term, and are environmentally sound and address the cause of poverty
rather than just the symptoms.
Department of Foreign Affairs and Trade (DFAT) develops the Country Strategy Papers (CSPs) to provide three to five year
period indicative funding approvals of its operations in prioritized countries. 250 The Development Cooperation Division of
the Department of Foreign Affairs and Trade is responsible for the management, oversight, policy direction and
administration of Ireland’s development cooperation programme. Irish Aid is operated within DFAT
Availability of projected levels of public financial resources
●
●
●
249
250
3-year medium term budgetary framework. Works as a procedural manual to guide annual budgeting and more
forward planning information is available through Country Strategy Papers, programme funding or NGOs, and
other commitments with development partners.
Climate finance is mainstreamed in development assistance funds.
Department of Foreign Affiars and Trade,and the Department of the Environment, Community and Local
Government (DECLG) has main responsibility for allocating climate finance.
Submissions or Ireland p. 49
OECD (2014)
88
9.3.13. Italy
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Parliamentary republic
1 January - 31 December
April
December
Multi-year budget framework (current year and additional three
years)
Parliament
Overall budget framework
The responsibility for preparing the budget lies now with the Ministry of Economy and Finance (MEF). MEF is the result of the merger
of the Budget Ministry, the Treasury Ministry and the Finance Ministry. The first two merged in 1997; the third was merged with them
in 2001. The budgeting process has changed a lot along the years with significant oversight from the European Commission. Recently
the budgeting process has been divided in to processes, a technical one (The Budget) and a legal one (The Stability Law). There is
currently a great distinction in Italy between the “budget,” and the “Stability Law.” No expenditure may be spent directly by the
budget; the budget may only finance expenditure to fund programmes authorized in separate enabling legislation. The “budget” is a
reflection of the amounts required to fund such existing legislation and serves essentially as a baseline. All actions to increase or
decrease expenditures therefore takes place by creating new, or amending old, enabling legislation. All such legislation is compiled in
the “Stability Law.” This is the focus of negotiations in the budget formulation process and is the focus of Parliament’s attention. The
Stability will be merged with the budget.251
Although there has been changes in the budget formulation process the multi-year budget framework of the Italian budget has not
changed. The Italian Parliament enact the Budget Act adopting the budget for the current year and additional three fiscal years of
which the second and the third are limited to the principal revenue and expenditure aggregates. In particular, applying the annual
budgeting principle, the law permits capital investment expenditure to use the appropriations for the current year in the following
years.252
Since 2011, the formulation of the budget starts with the Economic and Financial Planning Document (DPEF) that includes planning
targets for the budget of the general government and its sub-sectors, which are then further broken down into a three-year forecast
of State Budget expenditure by mission and program in the budget 253.
Italy’s development cooperation budget is established in the yearly national budget plan and other specific laws (e.g., law on
international missions).254
Deadline
Annual Budget Process of Italy255
Early April
Early May
Formulation of the Economic and Financial Document (DEF) and Parliament deliberation and approval
The Ministry of Economy and Finance sends out a circular calling for submissions from line ministries to update
their baselines. The baseline is generally updated to reflect requests that are a function of volume growth in
programmes or other out-year implications of previous decisions.
Baseline for the Budget
May 251
OECD (2015) Budgeting in Italy - 36th annual meeting of OECD senior budget officials working party of senior budget officials public governance
and territorial development directorate public governance committee. GOV/PGC/SBO(2015)4
252 OECD (2009) Managing Aid: Practices of DAC Member Countries
253 IMF (2014) Budget Institutions in G-20 Countries—Country Evaluations. Policy Paper
254 OECD (2009)
255 OECD (2015)
89
September
July - September
Mid-September
Mid-October
December
Ministry of Economy and Finance finalize the updated baseline, “the budget,” and presents it to the Cabinet for
approval.
Resource allocation phase
Resource allocation happens overlapping the procedures for establishing the budget baseline. It happens in
separate meetings between the Ministry of Economy and Finance and each line ministry at a high-level. The
meetings review the submissions from each ministry in detail before sending it for Cabinet approval.
Revised macroeconomic forecast becomes available leading to a formal endorsement by Cabinet and
Parliament of an updated Economic and Financial Document (DEF).
The budget is presented to the Parliament
Budget approval
Climate finance in the budget process
Italy channels climate finance through its official development assistance (ODA) budget. Among the Italian Development Cooperation
objectives is the prevention and mitigation of the effects of climate change. 256 Climate change issues are mainstreamed along the
cooperation agreements and is manifested within the official development assistance for other cross-cutting issues such as agriculture
(i.e. promote “ecological intensification of agriculture by improving production and agricultural productivity, soil and water
management, climate change adaptation and mitigation measures”)257, technology transfer and social infrastructure and services 258.
Planning at operational level
The Ministry of Foreign Affairs and International Cooperation (FARNESINA) is responsible for the State’s functions, tasks and duties in
matters concerning Italy’s political, economic, social and cultural relations with other countries. Italy has prepared multi-year Policy
Guidelines and Action Plans for the development aid priority areas. The Italian Development Cooperation aid programs focus are in
countries linked to Italy by former colonial ties.
Among the various ministries and local government bodies providing foreign assistance, the Directorate-General for Development
Cooperation (DGCS) in the Ministry of Foreign Affairs plays a leading role in bilateral programmes which cover 4-year periods (known
as Country Programmes).259 The DGCS of the FARNESINA, in accordance with Law 49/87, manages contributions originating from two
different legislative instruments: the Budget Statement and the portion of the international Mission Decree relating to civil
cooperation. The previously mentioned Directorate General also contributes to the implementation of tied aid-funded programmes
proportionately to the resources available on the Revolving Fund, as provided for in Art. 6 of Law 49/87. The Ministry of Economy and
Finance appropriates funds for contributions to the European Union and to the European Development Fund, as well as to Banks and
Multilateral Funds.260
Availability of projected levels of public financial resources
●
●
Italy channels climate finance through its official development assistance (ODA) budget.
Among the Italian Development Cooperation objectives is the prevention and mitigation of the effects of climate
change and the issue is mainstreamed along Italy´s cooperation agreements
256
Italian Ministry of Foreign Affairs and International Cooperation - Directorate General for Development Cooperation (DGDC) (2014) Office VIII
Italy’s Development Cooperation in the 2014–2016 Three-Year Period, Programme guidelines and orientations. Updated: March 2014. Retrieved
from: http://www.cooperazioneallosviluppo.esteri.it/pdgcs/Documentazione/DocumentiNew/MAE_Guidelines%202014-2016_ENG.pdf
257 Ministry of Foreign Affairs and International Cooperation (2014) Direzione Generale per la Cooperazione Allo Sviluppo - Relazione annuale
sull’attuazione della politica di cooperazione allo sviluppo nel 2014 (art. 12, comma 4, legge 11 agosto 2014, n. 125)
258 Italian Ministry of Foreign Affairs and International Cooperation – Open Aid. Retrieved from: http://openaid.esteri.it/. Last visited in March 3,
2016
259 OECD (2009)
260Italian Ministry of Foreign Affairs and International Cooperation - Directorate General for Development Cooperation (DGDC) (2014)
90
●
Within both the annual and multi-annual budget planning processes, climate finance is managed as a cross-cutting
objective within its ODA.
91
9.3.14. Japan
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
parliamentary government with a constitutional monarchy261
1 April - 31 March
April
March
3-year Medium-term Fiscal Framework
Parliament (Diet)
Overall budget framework
The Ministry of Finance (MOF) is mainly in charge of the budgets and budgetary policy.262 In MOF, there is the Budget Bureau which is
responsible for budget formation. The Director General co-ordinates the budget-preparation in the budget Bureau. The Cabinet
prepares the budget and submits it to the Diet (parliament). In the Cabinet, Ministry of Finance has full responsibility for the budget.
The Medium-term Fiscal Framework of Japan is incorporated in the Fiscal Management Strategy.263 The Fiscal Management sets forth
the Medium-term Fiscal Framework that projects up to three years starting from the following fiscal year.
All central government expenditure is approved in an annual basis except for expenditures that were approved for continuous
expenses over several fiscal years before completion. 264
Deadline
Annual Budget Process of Japan265
July
end of August
The Cabinet decide on “Guidelines for the FY Budget Rearrangement Request”
Submissions of preliminary estimate documents by the various ministries
Top Ministry of Finance officials work out the general contours of the new budget and the distribution of tax
revenues
Release of the ministry's draft budget,
Cabinet decision on the government draft budget
Presentation of the budget to the Diet
The House of Representatives begins deliberation of the Budget proposal. After approval, the budget proposal
is sent to the House of Councillors.
Approval of the budget
The budget comes into force after the approval in the plenary session of the House of Councillors. When there
is conflict in decisions between the House of Representatives and the House of Councillors, a joint conference is
held. If the two lack consensus, the decision of the House of Representatives becomes the decision of the Diet.
December
January
March
266
261
a system of government in which a monarch is guided by a constitution whereby his/her rights, duties, and responsibilities are spelled out in
written law or by custom but is mostly a hereditary symbolic head of state, but also has a government in which members of an executive branch
(the cabinet and its leader - a prime minister, premier, or chancellor) are nominated to their positions by a legislature or parliament, and are
directly responsible to it; this type of government can be dissolved at will by the parliament (legislature) by means of a no confidence vote or the
leader of the cabinet may dissolve the parliament if it can no longer function. (see World Fact Book : https://www.cia.gov/library/publications/theworld-factbook/docs/notesanddefs.html?fieldkey=2128&term=Government%20type)
262 OECD. (1995) p. 149
263 Cabinent Decision. (2012). Medium-term Fiscal Framework (FY2013 – FY2015), p. 1–6.
264 OECD. (1995) p. 150
265 Research Office of the Standing Committee on Budget, House of Councilors
266 OECD (1995) p. 150.
92
Climate finance in the budget process
Japan mainly allocates climate finance by the Japan Bank for International Cooperation (JBIC), Nippon Export Investment Insurance
(NEXI), and Japan International Cooperation Agency (JICA). JBIC is in charge of co-financing, equity participation and guarantee facility,
NEXI focuses on insurance, and JICA provide most of public assistance to improve enabling environments in developing countries.267
Most of the climate funds are directed as ODA and OOF. According to the 2014 submissions by Japan on Strategies and Approaches,
Japan is mainly focusing on mobilizing private finance.
Planning at operational level
Ministry of Foreign Affairs (MOFA) and Ministry of Finance (MOF) mainly operates for 89% of the total ODA budget. MOF is in charge
of some parts of bilateral funds268 but MOFA has the central coordinating role among the ODA-related government agencies.269 JICA
also is responsible for some allocation of development aid and climate finance. Next fiscal year’s draft of development co-operation
budget provides forward spending information to the public at the latest in January. 270
Japan has a “Country Assistance Policies” (CAPs) for allocating to partner countries. This is designed for 5-year cycles. Based on this
policy, Japan develops a multi-year indicative financial plans which is shared with the partner countries on a non-committal, informal
basis.271
Availability of projected levels of public financial resources
●
●
●
●
Aid allocations to partner countries are based on so-called “Country Assistance Policies” (CAPs). A CAP is generally
designed around a five-year cycle.
Information on the next fiscal year’s draft development co-operation budget is publicly available at the latest in
January preceding the fiscal year.
All central government expenditure is approved in an annual basis except for expenditures that were approved
for continuous expenses over several fiscal years before completion
Most of public climate funds are directed as ODA and OOF Currently, Japan is mainly focusing on mobilizing private
finance.
267
UNFCCC. (2014) Submissions of Strategis and Approahces by Japan
Climate Funds Update, retrieved April 1, 2016, from http://www.climatefundsupdate.org/listing/hatoyama-Initiative
269 OECD (2014) p. 79
270 idbd.
271 idbd.
268
93
9.3.15. Luxembourg
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
constitutional monarchy
1 January - 31 December
October
December
4-year multiannual framework
Parliament
Overall budget framework
The budget process of Luxembourg is characterized by an annual budget (De Budget) that is managed alongside a 3-year framework
for limiting the government’s deficit and debt, and a 4-year fiscal strategy. The annual budget consists of three parts – expenditures,
revenues and a “budget pour ordre” – and is passed as a single document authorizing all expenditure and revenue.272 The Inspectorate
of Finance (Inspection générale des Finances) within the Ministry of Finance advises the Minister of Finance on the strategic aspects
of the budget, coordinates the budget preparation process, and plays an active role in the formulation of the budgets of line
ministries.273
The budget circular, released each year by the Minister of Finance, contains fiscal projections, objectives, strategies, and technical
instructions for line ministries.274 The overall budget contains three volumes that have recently undergone changes due to national
fiscal reforms.275 Volume 1 is the Draft Budget (Projet de Budget)276 for the next fiscal year. Volume 2 outlines Luxembourg’s mediumterm fiscal policy that is guided by the European Stability and Growth Pact (SGP) also referred to as the European framework for fiscal
policy (Le cadre européen de la politique budgétaire)277. Volume 3 is a relatively new component of the overall budget (as of 2014)
that define multiannual financial guidelines for the development of the annual budget. 278 Volume 3 is titled the Multi-year Financial
Planning Bill (Projet de loi relatif à la programmation financière pluriannuelle) and covers the 4-year period of 2016 – 2019.
Deadline
Annual Budget Process of Luxembourg279
early April
Distribution of the budget circular
The budget circular is issued by the Minister of Finance. These guidelines are to be observed by departments
when preparing their budget proposals.
Budget proposals by departments
Budget proposals are developed by departments in line with the fiscal policy objectives contained in the budget
circular. Proposals are then sent to the Minister of Finance and the General Inspectorate of Finance before midMay.
April to May
272
OECD (2012). Budgeting in Luxembourg: Analysis and recommendations, Retrieved March 1, 2016, from http://www.oecdilibrary.org/governance/oecd-journal-on-budgeting-volume-2012-supplement-1_budget-v12-sup1-en
273 ibid.
274 Institut national d’administration publique, Ministere De La Fonction Publique Et De Ka Reforme Administrative
http://www.igf.etat.lu/lexique/lexbdall.pdf
275 De Budget 2016 Links, Retrieved March 1, 2016, http://www.budget.public.lu/lu/budget2016/links-dokumenter/index.html
276 Le Gouvernement, (2016) De Budget 2016, v.1., http://www.budget.public.lu/lu/budget2016/links-dokumenter/dokumenter/budget-2016-vol1projet-budget-2016/minfinances_vol1de-budget-2016.pdf
277 Le Gouvernement, (2016). De Budget 2016. V.2 http://www.budget.public.lu/lu/budget2016/links-dokumenter/dokumenter/budget-2016-vol2cadre-europeen/minfinances_vol2de-budget-2016.pdf
278 Le Gouvernment, Budget Pluriannuel 2015-2019, http://www.budget.public.lu/lu/budget2016/links-dokumenter/dokumenter/budget-2016vol3-projet-loi/minfinances_vol3de-budget-2016.pdf
279 Institut national d’administration publique, Ministere De La Fonction Publique Et De Ka Reforme Administrative
http://www.igf.etat.lu/lexique/lexbdall.pdf http://www.oecd.org/gov/budgeting/D2-PM%20-%20Luxembourg%20-%20R.%20BAUSCH%20%20Luxembourg.pdf
94
May / June
June / July
September
Mid-October
December
Review of budget proposals
The General Inspectorate of Finance reviews the department budget proposals and final proposals are worked
out through interdepartmental meetings.
Government Council considers outstanding issues in budget proposals
Government Council meets to negotiate on political issues, conflicts between budget requests, and consider
additional changes proposed by the Inspectorate.
Finalization of the draft budget by the Council of Government
Important political issues are decided either during ministerial meetings or by the Government Council.
Proposed budget in the House of Deputies
The annual budget is proposed to the House of Deputies, including a report on financial and budgetary situation
and outlook in the overall economic framework as well as information on the multiannual projections of revenues
and expenditures of the State on a rolling five years.
Budget approved
Parliament votes on the budget.
Climate finance in the budget process
Luxembourg allocates much of its climate finance as ODA and aims for ODA to represent at least 0.7% of GNI (1% of GNI in 2011). It
also aims to mainstream the Rio markers into all its projects and programmes. Contributions to some multilateral funds are
responsibility of the Ministry of Finance.280 Information on the ODA budget is available in the draft budget law submitted to parliament
in October.281
Planning at operational level
Luxembourg’s ODA is implemented through bilateral and multilateral cooperation and is primarily managed by Development
Cooperation Directorate of the Ministry of Foreign Affairs (MAE).282 Bilateral ODA is primarily formulated and implemented by LuxDevelopment. 283 For multilateral support, the Directorate usually signs multiannual framework agreements with multilateral
agencies.284 Bilateral cooperation is guided by Indicative Cooperation Programs (Programme indicatif de Coopération, PICs)285 that
cover 4-5 forward years and includes a financial envelope and programmes and projects planned during that period. 286
Availability of projected levels of public financial resources
●
●
●
The annual budget of Luxembourg is adopted in December of every year and broadly sets out spending plans for
ODA, of which climate finance is component.
For multi-year planning, Luxembourg also utilizes a 4-year multiannual financial framework to guide expenditures
which is passed as a part of the annual budget.
Luxembourg develops 5-year Indicative Cooperation Programs (PICs) as the main planning instruments for
bilateral cooperation, and climate finance, which forecasts expenditure within partner countries.
280
UNFCCC. LUX NC6.
OECD (2014)
282 Government of Luxemburg, retrieved April 30, 2016 from http://www.gouvernement.lu/maee
And OECD 2014
For a useful graphic that maps of Luxembourg’s primary ministries and agencies involved in its development cooperation efforts, see OECD,
Luxembourg: Development Assistance Committee (DAC) Peer Review 2012, page 23.
283 Government of Luxemburg, retrieved April 30, 2016 from https://luxdev.lu/en/agency
284 UNFCCC. LUX NC6.
285 Government of Luxemburg, retrieved April 30, 2016 from https://luxdev.lu/fr/activities
286 (OECD, 2014)
281
95
9.3.16. Netherlands
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
constitutional monarchy287
1 January - 31 December
August/September
November/December
4-year Multi-term budgetary framework
Parliament
Overall budget framework288
The Ministry of Finance (MF) is responsible for all budgetary matters. Expenditure and revenue side of the budget is dealt in the MF.
The Directorate General of the Budget, situated within the MF, is in charge of controlling the expenditure and non-tax revenues. In
the Netherlands, Cabinet plays a main role in the budget process. A Cabinet sub-council which is chaired by the Prime Minister can
precede full cabinet discussions. Cabinet discuss and decides on any budget process matters based on what MF proposes forward. 289
Ministries in the Netherlands all have a 4-year coalition agreement when a Cabinet comes into office.
The Parliament approves all commitments in the concerned budget year especially when those commitments turn to expenditures in
the future years.290 If Parliament has not passed the Appropriation Bill at the beginning of the new fiscal year, departments are allowed
to send up to 4/12th of what Parliament approved in the previous year for the current budget year.
The Netherlands has a four-year Multi-medium budgetary framework. The government defines the expenditure ceilings in terms of
real expenditure growth. This system gives the framework some flexibility as the ceilings need to be converted each year into nominal
terms.291
Deadline
Annual Budget Process of Netherlands292,293
January-March
FM updates multi-year expenditure projections.
Spending ministries compile expenditure proposals
Spending ministries send Policy Letters to the FM to propose their new expenditure.
The letter is discussed and decided by Cabinet.
FM sends Letters of Totals to spending ministries stating their maximum level of spending for the next fiscal year.
First drafts of the budgets are discussed by officials of the spending departments and the director-general of the
budget
The Council of Ministers make a final decision about the expenditure section of the budget.
Cabinet presents draft-budgets to the Parliament on Prince’s Day (3rd Tuesday in September)
General Policy Debate – Plenary Session
General Budget Policy Debate – Plenary Session
Committees begin examining each budget bill
March
April
May-June
July-August
September
End September
Early October
Mid-October
287
Constitutional monarchy - a system of government in which a monarch is guided by a constitution whereby his/her rights, duties, and
responsibilities are spelled out in written law or by custom. (see World Fact Book: https://www.cia.gov/library/publications/the-worldfactbook/docs/notesanddefs.html?fieldkey=2128&term=Government%20type)
288 Government of the Netherlands, Budget, retrieved April 5, 2016 from https://www.government.nl/topics/budget-day/contents/budget-process
289 OECD (1995). P. 155.
290 OECD (1995). P. 156.
291 Sherwood, M. (2015). Medium-Term Budgetary Frameworks in the EU Member States (Vol. 8022). P. 26. doi:10.2765/905635
292 OECD (1995) p. 159.
293 OECD. Budgeting in the Netherlands ()
96
Late October to
End December
Individual budget bills approved one by one in two-round plenary session
Climate finance in the budget process
Under the coalition agreement, international climate finance is funded from the development cooperation budget. 294 The Minister for
Foreign Trade and Development Cooperation is responsible for the programming and planning of climate finance. The four thematic
priorities; water, food security, security and the legal order, sexual and reproductive health and rights, 295 the Netherlands is framing
in its international cooperation, is also embedded in climate finance. National financial support for climate change is operationalized
for the water and food security programmes synergies with climate change and also the Netherlands’ work to improve resilience of
delta’s worldwide.
Planning at operational level
The overall budget framework for Dutch development and climate finance is given to the Homogenous Budget for International Cooperation (HGIS). The HGIS presents an overview of ODA and non-ODA activities in a multi-year framework (currently covering the
years 2011 to 2017). Also the embassies prepare a Multi-Annual Strategic Plans (MASPs) for the partner countries, up to 4 years. 296
Also, the Ministry of Foreign Trade and Development Cooperation is responsible for programming and planning for climate finance
under the HGIS according to foreign policy priorities. The MFA administers most of the HGIS funds (79% in 2012). 297
Availability of projected levels of public financial resources
●
●
●
Information on the next year’s development co-operation budget becomes publicly available in September. Multiyear indicative planning data are available in HGIS (up to 2017) and the embassies prepare a Multi-Annual
Strategic Plans (MASPs) for the partner countries.
International climate finance funds were agreed upon under the coalition agreement and it is allocated from the
development cooperation budget.
The Netherlands strategize its climate finance funds based on the four thematic priorities; water, food security,
security and legal order, and sexual and reproductive health and rights.
294
Government of the Netherlands, Climate and development cooperation (n.d.). Accessed April 1, 2016.
https://www.government.nl/topics/development-cooperation/contents/climate-and-development-cooperation.
295 Submissions of the Netherlands
296 OECD (2014)
297 Donor Tracker, the Netherlands, Retrieved March 1, 2016, from http://donortracker.org/donor-profiles/netherlands/budget-process
97
9.3.17. New Zealand
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
parliamentary democracy and a Commonwealth realm298
1 July - 30 June299
May
December
3-year medium-term budgetary framework
Parliament
Overall budget framework
New Zealand only has one legislative chamber in the central government, the Hose of Representative, which in another word,
Parliament. The Prime Minister selects the Ministers of the Crown and they form the Cabinet. The Cabinet is the highest council of
government.300 Cabinet is responsible for introducing most of the government policy and it decides on administrative and legislative
proposals. In addition, it co-ordinates with the Ministers. Expenditure Control committee (ECC), a sub-committee of Cabinet is in
charge of detailed examination of departmental budgets and expenditure proposals. 301 The Minister of Finance situated within Cabinet
has the main responsibility for the budget. This minister is also in charge of the Treasury department. New Zealand’s Treasury is the
principal financial advisor to the Government. It works to advise the content of the annual budget and reviews expenditure
programmes, prepares expenditure forecasts and monitors revenue and expenditure flows.
The Parliament monitors the activities of the Ministers. The Appropriation Bill passed by the Parliament grants the Ministers the
authority and command over resources. The Annual appropriations grants authority only for a single financial year, whereas,
Permanent appropriations enables Ministers to utilize public money without annual approval from Parliament. 302
New Zealand has some form of Medium-term budgetary framework. The government adopted ‘Fiscal Responsibility Act’ which
legislates budget principles of transparency and mandatory short-, medium-, and long-term plans.303 The time frame for this multiyear structure is three years with an updated long-term outlook (ten years minimum) every year. Therefore, in the beginning of the
budget round, a three-year projection of department budget strategy is available to access. 304
The budget decisions follow a “baseline” determined by previous two out-year forecasts. The baseline is reviewed by Treasury,
individual Ministers and Cabinet committees before being incorporated in the First Appropriation Bill (July) or the Second
Appropriation Bill (April/May).
298
Parliamentary democracy – “a political system in which the legislature (parliament) selects the government - a prime minister, premier, or
chancellor along with the cabinet ministers - according to party strength as expressed in elections; by this system, the government acquires a dual
responsibility: to the people as well as to the parliament. And also has Queen Elizabeth II as monarch.” (see World Fact Book:
https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?fieldkey=2128&term=Government%20type and Wikipedia:
https://simple.wikipedia.org/wiki/Commonwealth_realm)
299 CHECK: 1 April - 31 March (note: this may be the fiscal year for tax purposes)
300 OECD (1995)
301 ibid.
302 ibid.
303 Lundbäck, E. J. (2008). Medium-Term Budgetary Frameworks - Lessons for Austria from International Experience, 30.
doi:10.1787/880241418571
304 OECD (1995)
98
Deadline
Annual Budget Process of New Zealand305
August-November
Strategic Phase
Development of the budget strategy
Ministers reach agreement on the budget strategy, including processes and “rules”
Communication of the budget strategy to departments
First Appropriation Bill is incorporated
Multi Year Budget Plans Phase
Cabinet determines any shares of new spending in each Vote
Cabinet making final decisions about the overall shape of the Budget package; Budget Baseline submissions,
which update departmental budgets for the next three years for any technical adjustments required, and
Baseline Alignment Proposals (BAPs), that set out proposed changes in each Vote to ensure alignment of
spending and government priorities.
November
December
to
November to April
April to May
June
Budget Decisions Phase
Cabinet makes final Budget Decisions and produce budget documents and produces the Budget documents
Budget Policy Statement developed by budget strategy is published by March 31 to be submitted to the
Parliament.
Production and Presentation of Budget Documents
Budget Policy Statement is examined by the Finance and Expenditure Committee (FEC)
Second Appropriation (Estimates) Bill is introduced by the budget speech. (annual debate)
Passing the Appropriation Bill
Climate finance in the budget process
New Zealand appropriates climate finance through ODA and its development aid programmes. It targets to prioritize climate-related
assistance parallel to the country’s sustainable development objectives. 306 New Zealand announced in its submission for strategies
and approaches that climate finance will be specially target small island developing states in the Pacific.
The New Zealand Aid Programme entails two multi-year (three-year) appropriations approved by parliament. Currently available
version was released in 2015 which covers periods of 2015/16-2017-18. These multi-year appropriations are approved as a separate
legislation in the year of inception.307 Despite the separate approval, this multi-year expenditure is re-forecasted on an annual basis
and is published in the New Zealand Budget.
Planning at operational level
According to New Zealand’s report, a significant proportion of New Zealand’s climate-related assistance is delivered bilaterally through
the New Zealand Aid Programme (known as ‘aid partnerships’), in activities designed to complement and further strengthen the aid
programme’s core focus on sustainable economic development.308
New Zealand’s development co-operation budget is primarily held in a separate Vote for Official Development Assistance (94% of
reportable ODA).309 This Vote is managed by the Ministry for Foreign Affairs and Trade (MFAT). The International Development Group
is the division within MFAT with primary responsibility for delivering the New Zealand Aid Programme.
305
New Zealand Treasury, Budget Process, Retrieved April 20, 2016, from http://www.treasury.govt.nz/budget/process
UNFCCC (2014) Submissions for Strategies and Approaches of New Zealand
307 OECD (2014)
308 UNFCCC (2014)
309 OECD (2014)
306
99
Availability of projected levels of public financial resources
●
●
●
Next year’s reforecast ODA budget will be available in May following the delivery of the Budget Speech. Overall
multi-year financial plans are available in the International Development Group’s Strategic Plan.
The New Zealand Aid Programme entails two multi-year (three-year) appropriations approved by parliament. Also,
bilateral programmes have directions up to five years.
New Zealand specially target small island developing states in the Pacific region.
100
9.3.18. Norway
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Constitutional monarchy
1 January - 31 December
January
December
Multi-year budget framework (current fiscal year plus 3 years)
Parliament (The Storting)310
Overall budget framework
The cabinet 311 plays a strong role in the budgetary process with a central role in formulating the budget via the annual budget
conferences. Through extensive cabinet meetings, it is able to exert considerable influence on budget execution. The budget is settled
by the cabinet in plenary meetings. The Minister of Finance does not play a central role in the budgeting process and does not negotiate
directly with the individual ministers on budget proposals, and cannot negotiate spending reviews that allow for proposition of
medium-term policy reforms. The Storting (Norway Parliament) has unlimited power to propose amendments to budgets and may
approve them by a simple majority.
Budget documents contain multi-annual projections for the following three years (current year plus 3 years). The Norwegian
governmental budget includes the “Yellow Book”, a document that outlines the split of funds by ministries and program areas, and
separate proposals for each ministry, with detailed breakdowns of income and expenditure. Furthermore, the government publishes
a report composed of a macroeconomic outlook, the general fiscal policy and focus areas. 312 Within the budget envelope of the
Ministry of Foreign Affairs, development cooperation ("International Aid") is treated as a separate program area, with information on
the overall strategy and budget items for (1) bilateral cooperation with regions or countries, (2) allocation to different sectors and (3)
multilateral organizations and debt related activities.
In June 2006, Norway published its Action Plan for Environment in Development Cooperation. This was a follow-up to a white paper
entitled Fighting Poverty Together: A coherent policy for development (Report No. 35 (2003-2004) to the Storting, the Norwegian
parliament). In its recommendation regarding the white paper, the Storting’s Standing Committee on Foreign Affairs asked the
Government to develop an action plan for Norway’s overall environmental development cooperation. In its policy platform of 2005,
the current Government reinforced this line by stating its intention for Norway to play a leading role in integrating environmental
issues into development cooperation.313
Deadline
Annual Budget Process of Norway314
December to
January
Ministries send budget proposals to the Ministry of Finance (MoF)
A circular letter from the Ministry of Finance is sent to line ministries requesting expenditure projections for four
years based on unchanged policy (baseline projections) and proposals for new policy initiatives.
Ministry of Finance receives proposals for new policy initiatives.
February
310
The Storting represents the ultimate expression of the sovereignty of the Norwegian people. Through the Storting, it is the people who govern
the country, introduce legislation, authorize public spending, impose taxes and control the work of the Government. There are 169 elected
Members of the Storting. Parliamentary elections take place every four years. There are no by-elections, nor is there any constitutional provision to
dissolve the Storting between elections. The system of parliamentary rule means that it is the Storting that determines the composition of the
Norwegian Government. It is also the decision of the Storting to decide whether or not to initiate a referendum on a particular issue.
311 The cabinet consists of 19 ministers, including the Prime Minister
312 Donor Tracker – Analyzing Development Strategies- Understanding investment. Norway Budget Process. Retrieved from:
http://donortracker.org/donor-profiles/norway/budget-process. Last visted in March, 12 2016
313 https://www.regjeringen.no/en/dokumenter/action-plan-for-environment-in-developme/id440277/
314 Anderson, B. Curristine T. and Merk, O. (2006) Budgeting in Norway OECD Journal on budgeting. Volume 6 – No. 1
101
Early March
March to
August
Late August
October
November
Late November
Early December
December
Government 1st Budget Conference is held
This meeting decides on the total spending and revenue limits, the total limit for new policy initiatives, and the
expenditure and revenue limits for each ministry.
MoF adjust the budget according to the Government 1st Budget Conference
To adjust the ministries’ budget ceilings to the recommended economic and fiscal policy and to make room for
new policy initiatives, the Ministry of Finance proposes spending cuts for each ministry. The cabinet as a whole
decides on the spending cuts for each ministry. The spending cuts, together with the baseline projection, form
each ministry's budget ceiling.
Government 2nd Budget Conference
The second budget conference decides on new policy initiatives and the final allocation of the ministries’
budgets. Tax policy is finalised.
The budget bill is presented to Parliament.
Finance Committee proposes resolution on budget ceiling and split by Ministry
Reading and voting resolution in Plenary
Parliamentary Committees debates respective budgets and deliver recommendations on delivery of funds
Plenary decides on recommendations and approve final budget by December 15th
Climate finance in the budget process
Norway provides climate finance through its official development aid budget allocation. ODA budget is estimated in 4 year plans with
yearly approvals. Norway’s ODA policies and programmes are outlined in the annual national budget, and are ultimately determined
by the Norwegian government. The Ministry of Foreign Affairs (MFA) administers most of the aid in collaboration with embassies in
partner countries. The MFA also formulates strategies for ODA, and oversees its management and implementation. The Norwegian
Agency for Development Cooperation (Norad) is the main implementing agency, working under the MFA’s organizational structure.
The country’s main policy paper on foreign aid for climate change is the “Climate, Conflict and Capital”315. It situates development
policy in a wider context of foreign policy and security issues, and outlines Norway’s strategic approach in the three areas recognized
as the main challenges for combating poverty: climate change, violent conflicts, and the lack of capital. Since the 1990s, Norway has
set aside roughly 1% of its gross national income (GNI) for aid.316
Planning at operational level
The Ministry of Foreign Affairs (MFA) is in charge of the planning, execution and administration of Norwegian development activities.
The department for Regional Affairs and Development of the MFA is responsible for the policy design. At the same time, the embassies’
role in managing bilateral aid to partner countries has been strengthened. 317 Organized by the Ministry of Foreign Affairs,
programming of bilateral state-to-state cooperation is led by the Norwegian embassies based on requests from partner countries
outlined in program documents (known as Strategic Partnerships). The embassies assess the partner countries' program documents
as well as the corresponding funding requests. They then prepare an agreement document that outlines the details and responsibilities
of both sides, which has to be reviewed by the Norwegian Agency for Development Cooperation (NORAD), a directorate under the
MFA. The responsibility for implementation lies with the partner country. NORAD receives its mandate from the Norwegian Ministry
of Foreign Affairs. The NORAD budget and short-term mandate are determined by the annual budget as well as an annual
appropriations letter (årlige tildelingsbrev and Tillskottsbrev). NORAD has four main responsibilities: to provide “guidance” to the
315
Norwegian Ministry of Foreign Affairs (2009) Climate, Conflict and Capital - Norwegian development policy adapting to change. Report No. 13
(2008–2009) to the Storting.
316 Norway Climate ODA, https://www.sei-international.org/mediamanager/documents/Publications/Climate/NORD-STAR-PB-2015-Norwayclimate-ODA.pdf
317 OECD-DAC (2008) - DAC Peer Review of Norway
102
government, ensure quality, “initiate and carry through,” and “manage grant schemes.” These responsibilities include entering into
bilateral agreements with recipients of foreign aid.318
Climate change and the environment are two of the main focus areas of Norwegian development policy. Norway’s aid thematic area
“Climate change and access to clean energy” is integral part of Norway’s 10 year Action Plan 319 from 2006. Focus of the Action Plan
efforts is directed towards conservation of biological diversity and sustainable management of natural resources. The Action Plan
states that bilateral cooperation targets mainly at partner countries in Africa, and to some extent in Asia with partnerships in Central
America focusing regional programmes.
According to a UNFCCC summary on the Norwegian climate finance fast-start period until 2012, the main priorities for Norwegian
Climate Finance was on reducing emissions from deforestation and forest degradation and promotion of renewable energy and energy
conservation/efficiency. Adaptation to climate change was another priority, with particular focus on food security and disaster risk
reduction.320
Availability of projected levels of public financial resources
●
●
●
Overall budget for climate finance is controlled by the Ministry of Foreign Affairs at the national level
Annual and Multi-year budget timing through ODA (current year plus 3 years)
Implementation by the Norwegian Agency for Development Cooperation (NORAD) through bilateral
programming, plans and strategies in accordance with an multi-year Action Plan
318
Library of Congress – Regulation of Foreing Aid: Norway. Retrieved from: http://www.loc.gov/law/help/foreign-aid/norway.php. Last visited in
April, 20 2016
319 Norwegian Ministry of Foreign Affairs,(2006) Norwegian Action Plan for Environment in Development Cooperation, retrieved from
http://www.grida.no/_documents/Action%20Plan_en.pdf
320 UNFCCC, Norweigian Fast Finance Report, Retrieved from
https://unfccc.int/files/cooperation_support/financial_mechanism/fast_start_finance/application/pdf/norwegian_fast_start_finance_report_2012
final08august13.pdf
103
9.3.19. Portugal
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Republic; parliamentary democracy
1 January - 31 December
October
December
Up-to-3-year multi-year planning estimates (not covering the entire
budget)
Parliament
Overall budget framework
The Portuguese budget consists of a summary report with explanations of major policy initiatives, the provisions of the draft budget
act, and detailed budget maps defining expenditure ceilings for 16 ministries and around 600 individual departments. The expenditure
ceilings are further organized into 4 major functional categories broken down into 16 lower levels, an economic classification, and
administrative categories. Budget documents contain information on about 740 line-item appropriations. In total, the budget provides
5 000 pages of backup detail reflecting these categories. The budget includes allocations for the investment budget of the Central
Government Development Expenditure and Investment Programme (PIDDAC) by ministry and project. The Portuguese budget has
some aspects of a medium-term framework with multi-year estimates at the aggregate level for investment and major categories of
expenditure and revenue. These estimates are revised annually as part of the annual revision of the Portuguese Stability and Growth
Programme.
Central government budget functions in Portugal are the responsibility of the General Directorate of Public Accounting (DGO) in the
MFAP. The DGO reports to the MFAP through the Secretary of State for the Budget, one of four Secretaries of State within the ministry
(the other three are for Treasury and Finance, Tax Affairs, and Public Administration). Most of the DGO resources are targeted towards
technical details of budget formulation and execution, rather than on analysis of budget policy. The DGO has functional services dealing
with: overall budget; revenue and the General State Account; general government national accounts; PIDDAC (i.e. the investment
budget); the EU budget; budget legislation; and information systems for budgeting. The budget formulation and execution tasks are
carried out by the “delegations” which are divided into six sections covering the government’s main functional areas.
While the DGO has responsibility for detailed budget formulation and execution, responsibility for macroeconomic forecasts is in the
hands of the Office of Planning, Strategy, Assessment and International Relations (GPEARI), also in the MFAP. This office develops
medium-term macroeconomic forecasts for the updates of the Stability and Growth Programme released in December. It does a shortterm forecast in October for budget purposes and an intermediate forecast in April (released in the Budgetary Policy Steering Report,
“ROPO”). The GPEARI is also responsible for coordinating the performance assessment of administration services (SIADAP), a public
sector reform shifting the focus of assessment from inputs to the performance of the public sector. Each ministry has a GPEARI
responsible for strategic planning and coordination of public sector reform. Budget oversight for other specific functions or categories
of activity is assigned to other directorates of the MFAP.
The Portuguese budget formulation process follows an interactive top-down sequence that moves from broad policy outlines based
on a preliminary budget outlook to the development of detailed budgets within these constraints. The annual budget formulation
timetable consists of three major phases:
●
●
Determination of the global expenditure level compatible with revenue forecasts and of the general government balance
underlying the previous year’s Stability and Growth Programme (April to June).
A political process consisting of allocating the expenditure ceilings to the various ministries, formally endorsed by a meeting
of the Council of Ministers (June and July).
104
●
●
Compiling a detailed budget draft (August to 15 October). The starting points for the annual budget are the revenue,
expenditure and balance estimates and the major government policy assumptions stipulated in the Stability and Growth
Programme. Under EU procedures, the Stability and Growth Programme is updated annually at the beginning of December.
Portuguese policy is more fully elaborated in the Government Plan (GOP) and the Budgetary Policy Steering Report (ROPO),
both of which are released in April/May.
If there are changes in the economy or budget requirements, the targets of the Stability and Growth Programme can be
updated in April.
Deadline
Annual Budget Process of Portugal321
December
April - May
June
End of July
Stability and Growth Programme update
Government Plan (GOP). Budgetary Policy Steering Report (ROPO).
Total expenditure ceiling for operational budget (state) is established.
Individual ministries’ spending ceilings for operational and PIDDAC budgets are approved by the Council of
Ministers. DGO circular.
Allocation of spending among services within each ministry
Ministries submit budgets to the DGO.
Approval of budget by the Council of Ministers.
The budget is presented to Parliament in mid-October, two and a half months prior to the budget year, and
approved before the beginning of the budget year
Submission of initial budget to Parliament. Within 45 days Approval of final budget by Parliament.
Budget enters into force.
August
September
Before October 15
October 15
January 1
Climate finance in the budget process
Portugal provides financial assistance for climate actions within its official development assistance (ODA) budget with a focus on its
bilateral agreements (known as Indicative Cooperation Programmes (ICPs)) with Portuguese speaking countries (former colonies). 322.
Portugal has approved in 2014 the Strategic Concept of the Portuguese Cooperation 2014- 2020 (Conceito Estratégico da Cooperação
Portuguesa 2014-2020)323, which defines the guidelines for the Portuguese development assistance cooperation. Within the Strategic
themes is Environment, Green Growth and Energy. Through this Policy, Portugal intends to channel public funds and leverage private
finds to finance the policy strategies.
Planning at operational level
The Ministry of Foreign Affairs (IPAD) coordinates Portugal’s aid programme, which involves multiple actors including over 15 different
ministries, 308 municipal governments as well as universities and other public institutions.
Camões – Instituto da Cooperação e da Língua, I.P. 324 , in short Camões, I.P., is a public institute, integrated in the indirect
administration of the State, with administrative and financial autonomy and its own assets, pursuing duties of the Ministry of Foreign
Affairs under its supervision. Camões, I.P. mission is to propose and implement the Portuguese cooperation policy and to coordinate
activities undertaken by other public entities involved in implementing that policy and also to propose and implement the educational
321
OECD (2008a) Budgeting in Portugal OECD Journal on Budgeting Volume 2008/3
OECD (2008b) DAC Peer Review Portugal. Development Assistance Committee
323 Strategic Concept of the Portuguese Cooperation 2014-2020 (Resolução do Conselho de Ministros n.º 17/2014). See:
http://www.gmcs.pt/pt/resolucao-do-conselho-de-ministros-n-172014-aprova-o-conceito-estrategico-da-cooperacao-portuguesa-2014-2020
324Camões – Instituto da Cooperação e da Língua, I.P., in short Camões, I.P., is a public institute, integrated in the indirect administration of the
State, with administrative and financial autonomy and its own assets, pursuing duties of the Ministry of Foreign Affairs under its supervision.
Camões, I.P., mission is to propose and implement the Portuguese cooperation policy and to coordinate activities undertaken by other public
entities involved in implementing that policy and also to propose and implement the educational policy, to disseminate the Portuguese language
and culture in foreign universities and to manage the foreign Portuguese teaching network at primary and secondary levels. For more information
see: http://www.instituto-camoes.pt/english-info/root/sobre-nos/english-info
322
105
policy, to disseminate the Portuguese language and culture in foreign universities and to manage the foreign Portuguese teaching
network at primary and secondary levels.
The Camões, I.P., general duties in the cooperation domain include the coordination of Portuguese Development Cooperation Budget
Program, as well as all other cross-cut budgetary instruments, annual or pluri-annual, whose goal and purpose is the development
cooperation; to propose the definition of the cooperation and the official development assistance policy; to promote the
implementation of programmes, projects and cooperation activities for development cooperation with other ministries and
organization sectors and to prepare the pluri-annual programmes of development cooperation, as well as its financial planning.
Availability of projected levels of public financial resources
●
●
●
Climate finance is done within Portugal´s official development assistance budget.
Priority is given to Portuguese speaking countries (former colonies) in the bilateral agreements.
Portugal has approved in 2014 the Strategic Concept of the Portuguese Cooperation 2014- 2020 (Conceito
Estratégico da Cooperação Portuguesa 2014-2020) which defines the guidelines for the Portuguese development
assistance cooperation for the next years until 2020.
106
9.3.20. Spain
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
parliamentary monarchy
1 January - 31 December
October
December
Multi-year budget framework (current fiscal year and additional 2
years)
Parliament
Overall budget framework
Each year the budget preparation processes starts in January when the MEH (Ministerio de Economia y Hacienda) prepares a three
year budget outline (current year and additional two) and draft expenditure ceilings for the following year, and submits these to the
Council of Ministers. The MEH then draws up the ‘Multi-year Budgetary Scenario’ in accordance with the various budget laws of 2001,
2003 and 2006. Then the Directorate General of Budget (DGP) in collaboration with the budget offices of spending ministries and
agencies prepares long-term projections within the scenario for each ministry and submits them to the DGP. The DGP adds revenue
projections and sends them to the MEH which then presents the full scenario to the Council of Ministers. The MEH then prepares the
draft budget along with its spending recommendations for the Council of Ministers according to the ‘budget stability objectives’ for
both the national and regional governments.
The preliminary draft budget is discussed and approved by the Council of Ministers in September, including a multi-year macroeconomic framework contained in the Stability Program drawn up in accordance with the EU Stability and Growth Pact. The draft
budget is then submitted to the lower chamber of the parliament (Congreso de los Diputados) by the 1st October. Parliament
scrutinizes and discusses the draft budget in October and later reviews the projected budget scenarios and approves the aggregate
expenditure ceiling during the first quarter of the next year. However, neither the Congress nor Senate discuss program performance.
Budget execution is a highly regulated process with a particular concern on legal compliance. The functions of auditing and control are
vested in two institutions, namely: internal audit is performed by the General Audit Office (Intervención General de la Administración
del Estado – IGAE) while external audits are undertaken by the Court of Auditors (Tribunal de Cuentas). There are four main groups of
institutional players that are influential in budget deliberations and in the budget preparation process. First, the Revenue Commission,
chaired by the Secretary of State for Finance and Budget, is responsible for coordinating the preparation of the revenue forecasts.
Second, the Spending Policy Commission is chaired by the Minister of Economy and Finance with the assistance of the Secretary of
State for Finance and Budget and with the participation of spending ministers or, by delegation, other top officials representing
spending ministries and agencies. The role of this commission is to reach agreement on an initial allocation of budgetary resources
consistent with government priorities and its aggregate fiscal policy. The commission sets ceilings within which each spending ministry
and agency prepares their budget proposals. Third, the Ministerial Budget Commissions are composed of representatives from the
relevant units in each department, chaired by its deputy secretary. The task of these commissions is to make proposals for the
preliminary draft budget, formulate priority criteria, review existing programs and monitor their execution. And, fourth, the Program
Analysis Commissions exist with at least one in each department. These are chaired by the Secretary of State for Finance and Budget,
and their functions include the analysis 14 of the adequacy and validity of spending programs and whether they are consistent with
priorities defined by the Spending Policy Commission.
107
Deadline
Annual Budget Process of Spain325
January 25
Before January 31
Presentation of main phases and framework of budget formulation to the Council of Ministers
Transmission of Budget Stability Objective proposal for Regional Governments (Comunidades Autonomas) to
the Secretary of the Council of Fiscal and Financial Policy
Meeting of the Council of Fiscal and Financial Policy and National Council of Local Government (Reporting on
Budget Stability Proposal Objective to regional and local governments
Proposal of Budget Stability Objective and estimated limit for annual aggregate spending
Approval of Budget Stability Objective by Council of Ministers and Agreement sent to Parliament
Parliament Debate on approval or rejection of Budget Stability Objective and fix legal limits on spending
aggregates
Budget Circular sent to Ministries
Meetings of the Commission of Spending Policies
Approval of Budget Scenarios (2 following years)
Round of meetings at the Commissions for Program Analysis and updating budget Scenarios
Formulation of Draft Budget
Debates at the Council of Ministers
Before March 1
March 8
March 15
Before April 30
May 3
May
June
June to July
Up to July 31
August September
Before October 1
October to
December
Draft Budget approved and sent to Parliament
Debate and approval of Annual Budget Law
Climate finance in the budget process
Spain provides climate finance through its International Cooperation Agency (AECID) specially when establishing bilateral agreements.
Spain has priorities in funding other Spanish speaking countries. A large portion of the funds are channelized through Spain’s official
development (ODA) budget and based on the strategic regional and thematic priorities established in the Master Plan of the Spanish
Cooperation 2013—2016326. The distribution of ODA and short-term priorities are determined on an annual basis and made public
through annual reports on the implementation of the Strategic Plan. Climate change is a cross-cutting theme for the Master Plan.
Planning at operational level
The Spanish Agency for International Development Cooperation (Agencia Española de Cooperación Internacional para el Desarrollo)
abbreviated as AECID 327 , is a Spanish State Agency, created in November 1988 as a management body for Spain’s international
development cooperation policy. AECID is a public law body under the aegis of the Ministry of Foreign Affairs and Cooperation, via the
State Secretariat for International Cooperation and for Ibero-America (SECIPI). The Agency is in charge of designing, implementing and
managing development cooperation projects and programmes, whether directly, with its own resources, or through collaboration
with other national and international bodies and non-governmental organizations.
AECID (Agencia Española de Cooperación Internacional para el Desarroll) Governing Council, which includes representatives from
the MAEC and AECID's regional and sectoral divisions, decides on allocation by region and country, but not by sectors. To increase
ODA predictability, in 2010, Spain introduced multi-annual Country Partnership Frameworks (Marcos de Asociación País, MAP) for its
priority countries, in which sector priorities and estimated annual budget allocations are specified in coordination with partner country
governments. The MAP is implemented via non-public Annual Operational Programming Plans for each country.
325
OECD (2003) Budget For Results In Spain: Lessons Learned After Two Decades of Reform. Eduardo Zapico Goñi (author). Retrieved from:
http://www.oecd.org/spain/2497137.pdf. Last visited in March 3 , 2016.
326
AECID
(2013)
Master
Plan
2013
/
2016.
Retrieved
from:
http://www.aecid.es/CentroDocumentacion/Documentos/Planificaci%C3%B3n/iv_master_plan_spanish_cooperation.pdf Last visited in March 3, 2016
327 For more information see: http://www.aecid.es/EN/aecid
108
Availability of projected levels of public financial resources
●
●
●
Multi-year Budgetary Scenario’ (multi-year budget framework for the current fiscal year and additional 2 years)
Climate finance channeled through official development assistance and part of the Master Plan of the Spanish
Cooperation 2013—2016 as a cross-cutting issue
Priority is given to bilateral cooperation with Spanish speaking countries.
109
9.3.21. Sweden
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
constitutional monarchy
1 January - 31 December
mid-April
mid-December
Multi-year budget framework (current fiscal year plus next two years)
The Riksdag (Parliament)328
Overall budget Framework
Sweden employs a multi-year budget framework as the basis for the annual budget process. It has a three-year time horizon: the
upcoming budget (current fiscal-year) and the two following years. 329 The Government’s entire expenditure proposal is available in
the Budget Bill, which includes the Government’s Budget Statement, the Government’s assessment of the outlook for the Swedish
economy and public finances and the frameworks this provides for fiscal policy. 330 The budget also contains the Government’s
proposals on how to use the money available to central government and an estimate of expected central government revenue in the
coming year. The central government budget applies for one year at a time, but sometimes revisions need to be made after it has
started to apply. In this case, the Government will submit a revised budget. Members of the Riksdag are free to submit counterproposals to the Government's proposals. Before the Chamber of the Riksdag takes a decision on the central government budget, the
proposals contained in the budget need to be considered by the various parliamentary committees. The Committee on Finance has a
special role in this process.331
The Government submits the Spring Fiscal Policy Bill to the Riksdag by no later than mid-April. The Spring Fiscal Policy Bill contains
guidelines for economic policy and budget policy. The Riksdag adopts a decision on the Spring Fiscal Policy Bill in June.332
In September the Government presents the Budget Bill to the Riksdag. In election years, it may submit the Budget Bill slightly later.
The Bill contains the Government's proposals for the central government budget for the next budget year.
The Riksdag has until the end of November to determine the total limit for central government expenditure, as well as the limits for
each expenditure area. In mid-December it decides how the money for each expenditure area is to be allocated. The Riksdag also takes
a decision regarding the estimate of central government revenue.
If an agency needs more funds than anticipated, the Government can propose an amendment to the central government budget. This
is known as a “revised budget”, and the Government submits such proposals in April and September. In November the Committee on
Finance reviews all suggested amendments and Riksdag decides on the expenditure ceiling. Final decision is taken and registered on
the final Budget Bill in December.
328
The Riksdag (the Swidish Parliament) is the supreme decision-making assembly in Sweden. Every four years, the Swedish people choose 349
individuals to represent them in the Riksdag. The Riksdag's tasks include making laws and determining taxes and the central government budget.
The Riksdag also examines the work of the Government and central government agencies. Furthermore it has a considerable influence on Sweden's
foreign policy.
329 OECD (2001) Budgeting in Sweden. OECD Journal on Budgeting. Retrieved from: https://www.oecd.org/sweden/40140332.pdf. Last visited in:
March 5, 2016
330 OECD (2007) The Medium-term Fiscal Framework in Sweden Journal on Budgeting Volume 6 – No. 3
331 Government Offices of Sweden - Ministry of Finance (2008) The central government budget process
332 Government of Sweden: Riksdag – The Budget Bill. Retrieved from https://www.riksdagen.se/en/how-the-riksdag-works/the-budgetprocess/the-budget-bill/
110
The consolidated annual development cooperation budget of Sweden is included in the Government’s budget bill and considers an
indicative 3-year budget framework as well as authorisation for multi-annual commitments.
Deadline
Annual Budget Process of Sweden333
January to March
Ministries and government agencies submit estimates for expenditure and financing proposals for the current
and next 2 years and the Ministry of Finance updates the Multi-Year Budget Framework based on budget
submissions from spending ministries.
Government presents the Spring Fiscal Policy Bill to Riksdag and submits supplementary budget proposals for
the current year. The Minister of Finance presents to Cabinet his budget recommendations for the coming
year and the following two years.
Government projects expenditure ceiling for the current and coming 2 years, and submits the Central
Government Annual Report
Riksdag decides on guidelines in the Spring Fiscal Policy Bill
Ministries negotiate details of expenditure areas and appropriations with the Ministry of Finance
Government presents Budget Bill to Riksdag
Opposition parties submit alternatives to Government’s budget proposal
Committee on Finance reviews suggested amendments and submits proposals
On this basis, Riksdag decides on expenditure ceiling, expenditure area framework, and central government
revenues for the coming year
Chamber of Riksdag takes final decision on the Budget for the coming year
Mid-April
April-June
June
August
September
October
November
Mid-December
Climate finance in the budget process
Sweden provides assistance for climate change through is development aid budget. 334 The Swedish international development
priorities for 2016 include 8 thematic areas and “Environment and climate” in one of those areas. Sweden operates within a framework
of regular development cooperation budget to enable investments in the area of environment and climate through its development
financier the Swedfund.335
Planning at operational level
Once the budget bill is approved, the Government gives “appropriation directives” to the spending authorities in terms of objectives,
expected results and financial conditions for the operations. The Swedish International Development Cooperation Agency (SIDA)
reports to the Minister for International Development Cooperation, but the guidelines for SIDA’s operations are set by the Swedish
government. 336 The governmental development budget draft is jointly developed by the Ministry of Foreign Affairs (MFA) and SIDA
For budget calculation, SIDA337 submits an annual operations report to the MFA, detailing information on costs, revenues and results.
The annual report and government agency budget information form the basis for the government budget for the coming year and the
government’s letter of appropriation. The Swedish government and SIDA develop strategies for international development
333
Government of Sweden: Riksdag – The Budget Process. Retrieved from: https://www.riksdagen.se/en/how-the-riksdag-works/the-budgetprocess/
334 Stockholm Environment Institute – SEI (2013) Footing the bill: What is Sweden’s ’fair share’ of global climate finance?
335 Government of Sweden - Development cooperation budget 2016: More resources for the Syrian crisis, climate issues and humanitarian work.
Retrieved from: http://www.government.se/press-releases/2015/09/development-cooperation-budget-2016-more-resources-for-the-syriancrisis-climate-issues-and-humanitarian-work/. Last visited in: April 22, 2016
336 SIDA (2015) Swedish development cooperation - This is how it works. Retrieved from: http://www.sida.se/globalassets/global/about-sida/saarbetar-vi/sida4848en_web.pdf. Last visited in: March 20, 2016
337 SIDA is the Swedish government agency working on behalf of the Swedish parliament and government, with the mission to reduce poverty in
the world. The Agency contributes to implementing Sweden’s Policy for Global Development (PGU).
111
cooperation in each of its partner countries as well as regional and thematic strategies, which are published on the government’s
website (known as a ‘Strategy for development cooperation’ for each partner country).
SIDA’s mandate from 2015 on is to give special priority to the preparations for the adoption of the new Sustainable Development
Goals (SDG). Other areas highlighted in the directions include gender mainstreaming, mainstreaming the environment and climate
change perspective, reporting on biodiversity and ecosystem services, structural causes of poverty and inequality, and conditions for
a fair and sustainable development, as well as the development funds channeled through multilateral organizations. Bilateral
development co-operation appropriations are primarily managed by SIDA and multilateral appropriations by the Ministry for Foreign
Affairs. 338
The annual letter of appropriation, which is based on the decisions taken in the parliamentary budget process, specifies overall funding
to SIDA and the allocation of funds to different sectors and geographies. It gives general guidelines on how SIDA is to carry out its
work. However, SIDA is independent in defining the specificities regarding implementation and also handles individual cases
autonomously. The agency’s Secretariat for Evaluation and Internal Audit (UTV) and the National Audit Office are responsible for
evaluating Swedish performance in implementing strategies for development cooperation and performance on current activities.
Swedish development cooperation can be either bilateral or multilateral. About half of Sweden’s development cooperation is bilateral,
with the remainder multilateral. Bilateral cooperation is primarily coordinated by SIDA, while multilateral cooperation is largely dealt
with by the Ministry for Foreign Affairs.339
Availability of projected levels of public financial resources
●
●
●
Sweden employs a multi-year budget framework as the basis for the annual budget process. It has a three-year
time horizon: the upcoming budget (current fiscal-year) and the two following years
Bilateral cooperation is primarily coordinated by SIDA, while multilateral cooperation is largely dealt with by the
Ministry for Foreign Affairs.
Sweden provides assistance for climate change through is development aid budget. The Swedish international
development priorities for 2016 include 8 thematic areas and “Environment and climate” in one of those areas
338
SIDA – Appropriation Directions. Retrieved from: http://www.sida.se/English/About-us/How-we-are-governed/Letter-of-Appropriation/. Last
visited: March, 14 2016
339 SIDA (2015)
112
9.3.22. Switzerland
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
formally a confederation but similar in structure to a federal republic340
1 January - 31 December
September/October
December
3-year budgetary framework
Parliament
Overall budget framework
The budget process of Switzerland passes an annual appropriations budget and is guided by a financial plan which serves as a mediumterm budgetary framework covering a three-year period. Each year, the Federal Finance Administration (FFA) prepares the financial
plan, and guidelines and expenditure ceilings for the next annual budget which are sent to the federal departments. Departments
prepare their budget proposals on the basis of these guidelines, and adjusts department proposals through discussion with the FAA.
The Federal Council then adopts the financial plan and the annual budget proposal and submits the documents to Parliament which
amends the annual budget as needed and adopts to budget by the start of the next fiscal year.341
The 3-year financial plan342 (Finanzplan) is prepared on a rolling basis and serves as the starting point for future fiscal year budgets.
The plan presents an overview of expected expenditure by function (Übersicht über die Ausgaben nach Aufgabengebieten) which
includes a category for Foreign Relations - International Cooperation (Beziehungen zum Ausland - Internationale Zusammenarbeit)
and subcategory of development assistance (Entwicklungshilfe).
The annual budget presented to parliament consists of five volumes 343 which provide a summary of the budget (Vol 1), appropriations
by department which includes development cooperation (Entwicklungszusammenarbeit) and ODA (der öffentlichen Entwicklungshilfe
(APD)) (Vol 2), multi-annual information on macroeconomic forecasts (Vol 3), information on special accounts (Vol 4), and the financial
plan providing 3-year forward estimates for revenue and expenditure for departments. Parliament publishes a final volume containing
final appropriations after it approves the annual budget (Vol 6). Within multi-annual fiscal framework (the financial plan), the annual
budget is also managed by requiring that expenditures not exceed revenues over the medium term (known as the ‘fiscal rule’, or ‘debt
brake’).
340
The constitution of Switzerland (the Swiss Confederation) divides the federal state into three branches: (1) an executive branch which
implements the law and consists of (a) the Federal Council which is the highest executive authority whose 7 members are elected by the Federal
Assembly, (b) the President who elected for one year only as the 'Primus inter pares' (first among equals) and chairs the Federal Council, (c) the
Federal Administration which consists of 7 departments whose heads are members of the Federal Council, (d) Federal Chancellor who acts as chief
of staff to the Federal Council; (2) a legislature (parliament), known as the United Federal Assembly, which enacts legislation and consists of the
National Council and the Council of States; and (3) a judiciary which adjudicates on the law. (The Swiss government, The federal Council. “The Swiss
government”.) (Switzerland. “The Swiss Confederation - a brief guide”.)
341 IMF. “Switzerland: Report on Observance of Standards and Codes - Fiscal Transparency Module”.
342 Switzerland, Eidgenössische Finanzverwaltung (EFV). “Finanzplan”.
343 Switzerland, Eidgenössische Finanzverwaltung (EFV). “Budget”.
113
Deadline
Annual Budget Process of Switzerland344
January to
February
Federal Council preparation for the budget process
The Federal Finance Administration (FFA) prepares the medium-term fiscal framework (financial plan, or
FinanzPlan) for the next 3 years, and guidelines and expenditure ceilings for the forthcoming budget year. The
Federal Council approves the guidelines and timetable for preparing the budget and the financial plan. Budget
guidelines are issued to departments, along with the expenditure ceilings.
Department budget requests to FAA
Departments prepare their budget proposals on the basis of the budget guidelines and departmental
instructions issued to the budget units. Departments must submit their proposals to the FFA before the end of
April.
Discussion and adjustment of department budgets
The FAA considers and discusses department priorities and budget proposals submitted by the departments. In
the beginning of June, based on updated economic forecasts, the Federal Council approves a budget proposal
and medium-term financial plan (this occurs before the summer holidays).
Development and adoption of the Federal Council’s budget message
Based on the Federal Council’s approved proposal and financial plan, the FFA prepares more detailed budget
proposals and the financial plan. After summer holidays, this more detailed plan is adopted by the Federal
Council and is submitted to Parliament by the end of August.
Parliamentary debate and adoption of the budget
Parliament receives the transmitted budget proposal and financial plan, and examines the proposals in subcommittees who prepare a draft resolution for consideration by a plenary session of parliament. Parliament has
the power to amend the budget. The budget is voted on and adopted by the end of December.
De Facto: Amendments by Parliament are normally quite limited.
March to April
May to June
July to August
September to
December
Climate finance in the budget process
For accounting of climate finance, Switzerland uses the OECD DAC Rio marker system track and report climate-related
bilateral and multilateral support financed through ODA for mitigation and adaptation.345 Three departments - SECO, SDC,
SFOE - utilize a joint platform called PLAFICO (Plattform über die internationale Finanzierung und die
Entwicklungszusammenarbeit im Umweltbereich (PLAFICO)) to coordinate all matters related to international
environment finance and development cooperation.346
Planning at operational level
The Swiss Agency for Development and Cooperation (SDC)347 within the Federal Department of Foreign Affairs (FDFA) and the Swiss
Economic Cooperation and Development 348 within the Swiss State Secretariat for Economic Affairs (SECO) are the main agencies
responsible for policy formulation and implementation of Switzerland’s climate finance in the form of development cooperation and
344
Switzerland, Eidgenössische Finanzverwaltung EFV. “Grundlagen der Haushaltführung
des Bundes”. (french version) Switzerland. “Principes économiques, juridiques et organisationnels applicables à la gestion des finances”.
IMF. “Switzerland: Report on Observance of Standards and Codes - Fiscal Transparency Module”.
OECD. “Budgeting in Switzerland”.
Switzerland, Eidgenössische Finanzverwaltung (EFV). “Finanzberichterstattung”.
Switzerland, Eidgenössische Finanzverwaltung (EFV). “Grundlagen der Haushaltführung des Bundes”.
IMF. “Switzerland: Report on Observance of Standards and Codes - Fiscal Transparency Module”.
Switzerland. “Fiscal Policy with a Fiscal Rule on the federal level in Switzerland”.
345 (Swiss biennial submission)
346 (Swiss NC6)
347 Swiss Agency for Development and Cooperation (SDC).
348 State Secretariat for Economic Affairs (SECO), Economic Cooperation and Development.
114
ODA.349 The basis for Switzerland’s bilateral development cooperation is its country programmes (or “Cooperation Strategies”) which
it develops in partnership with recipient developing countries and such plans provide mid-term indicative financial information for aid
within those countries.350 The Renewable Energy and Energy Efficiency Promotion in International Cooperation (REPIC) 351 is a platform
to strengthen and coordinate Swiss federal activities on renewable energies, energy efficiency promotion and dissemination within
developing and transitioning countries activities of the platform are defined by a steering committee composed of representatives
from the four governmental offices including SECO, SDC, and SFOE.
In addition to those public programs, Switzerland has a number of institutions which are designed to support private sector finance.
Swiss Investment Fund for Emerging Markets (SIFEM) 352 is a development finance company which is owned by the federal government
and which provides long-term finance and advisory support to the private sector. 353 SIFEM defines its own strategic objectives and is
an independent in terms of its management, however it must report to parliamentary oversight bodies. The Swiss Export Insurance
Agency (SERV)354 is also an institution that is owned by the federal government and is largely self-financed through its business of
insuring Swiss exports, including clean technologies, against political risks and economic risk.355 The Swiss Global Enterprise356, a public
private partnerships to promote technology exports, similarly is funded partially by federal contributions, and partially from revenues
generated and private sector contributions. The Swiss Technology Fund357 offers loan guarantees to Swiss companies to promote
innovative technologies that reduce GHG emissions loan guarantees, assists selected partner countries in developing Mitigation Action
Plans and Scenarios (MAPS) promote innovative technologies for Swiss companies.
Availability of projected levels of public financial resources
●
●
●
●
An annual budget is approved each year to approve appropriations for climate finance, primarily in the form of
development cooperation and ODA.
Switzerland manages a rolling ‘financial plan’ which sets out expected expenditures and revenue over the
following 3-year time period.
Country Strategies, developed in partnership with developing countries, are the primary vehicle for Switzerland’s
bilateral development aid and such programs are multi-year in length and are subject to revisions through annual
programming.
Various Swiss institutions, of which generally focus on leveraging private finance, are wholly or partially owned by
the government of Switzerland, rely on public funding to varying degrees, and may be subject to their own
strategic planning and timeframes.
349
OECD, 2014. “2014 Global Outlook on Aid: Results of the 2014 DAC Survey on Donors’ Forward Spending Plans and Prospects for Improving Aid
Predictability”.
350 Switzerland, Federal Department of Foreign Affairs (FDFA). “Development and Cooperation: Countries”.
351 Renewable Energy and Energy Efficiency Promotion in International Cooperation (REPIC).
352 Swiss Investment Fund for Emerging Markets (SIFEM).
353 Swiss Investment Fund for Emerging Markets (SIFEM).
And Swiss BS
354 Swiss Export Insurance Agency (SERV).
355 Swiss BS.
356 Switzerland Global Enterprise.
357 Swiss Technology Fund.
115
9.3.23. United Kingdom
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
constitutional monarchy and Commonwealth realm358
6 April - 5 April
March
October
3-year medium-term budgetary framework
the Chancellor
Overall budget framework
The government is headed by a Cabinet of around twenty members formed by the Prime Minister, who is the leader of the majority
party in the House of Commons. Most of the members of the Cabinet are responsible for one or more government departments. 359
The Parliament has a second chamber, called the House of Lords which mainly revises bills sent from the House of Commons.
The Chancellor of the Exchequer is the lead in budgetary matters in UK. Under the Chancellor, the Treasury is concerned with revenue,
and the expenditure of the budget.360 The Chief Secretary to the Treasury, a member of the Cabinet leads on public expenditure
matters substituting the Chancellor. The Chief Secretary is supported by officials organized under a Second Permanent Secretary in
the public expenditure sector of the Treasury. This includes a General Expenditure Policy Group which deals with forward planning.361
Parliament can only grant money for departments to spend. It also can propose a reduction of spending but a Government can utilize
its majority to protect its own proposals. Supply Estimates is an estimated expenditure proposal which department proposes based
on its strategy and priorities up to a year ahead.362 Main estimates are presented in March each year, and an individual Estimate (or
“Vote) may specify that certain levels of receipts can be “appropriated in aid” to reduce the net provision required.363 The votes are
listed in the annual Appropriation Act.
United Kingdom adopted Medium-term budgetary framework as a multi-year fiscal framework. The multi-year document of United
Kingdom covers only fixed period of time mainly coincides with the term of an elected government.364 The Forward planning of United
Kingdom is defined in the three-year Spending Review. For example, a Spending Review in 2013 sets plans for 2015/2016. 365 Part of
the review process, Departmental Expenditure Limit (DEL) is set over three years, Most of the DEL is undifferentiated and allows the
administration full decision over its spending priorities. 366
358
Constitutional monarchy and commonwealth realm – “a system of government in which a monarch, Queen Elizabeth II is guided by a
constitution whereby his/her rights, duties, and responsibilities are spelled out in written law or by custom.” (see World Fact Book:
https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?fieldkey=2128&term=Government%20type and Wikipedia:
https://en.wikipedia.org/wiki/Commonwealth_realm)
359 OECD (1995)
360 Ibid.
361 Ibid.
362 Ibid.
363 Ibid.
364 Sherwood, M. (2015). Medium-Term Budgetary Frameworks in the EU Member States (Vol. 8022). doi:10.2765/905635
365 OECD (2014)
366 Iparraguirre, J. L. (2010, March). Introductory Module to Economics of Ageing.
116
Deadline
Annual Budget Process of UK367
November/Dece
mber
Chancellor of the Exchequer makes an autumn statement on the state of the economy to MPs
Here is a good opportunity for governments to come up with certain-budget proposals on budgetary policy and
discuss economic situation.
Chancellor Makes a Budget Statement to the House of Commons
Sets out plans for how to spend the money that will be authorized by the Commons in the coming fiscal year.
This is debated for four days in the House of Commons, one day in the House of Lords
The Finance Bill is introduced
It must have a second reading within 30 days
Then, the non-controversial measures are sent to the public bill committee and the Committee of the Whole
House
Finance Bill goes to the Reporting state
Third reading is done on the same day
The Finance Bill arrives to the House of Lards
After a second reading debate, it is passed without a vote and further debate.
A Supply and Appropriation Bill is passed
This authorizes the Vote on Account for the next financial year which allows the House of Commons to vote to
apportion to the government up to a certain limit for the early months of the financial year until the Supply and
Appropriation (Main Estimates) Bill is passed
February/March
July
Climate finance in the budget process
UK climate finance is “paid out of the 0.7% of national income dedicated to foreign aid, and is not additional spending.”368 It is not
clear how the additional spending on climate finance will impact on other development projects. 369 UK’s International Climate Fund
(ICF) is in charge of allocating climate funds. UK also mainstream climate change funds into UK ODA and EU development assistance
and MDB lending.370 ICF spends 60 percent of its funds to multilateral channels and 40 percent to bilateral channels. All spending of
ICF needs to be steady with DAC definition of ODA. 371
Planning at operational level
Budget negotiations with the Treasury on ODA allocations include Department for International Development (DFID) DECC and
Department for Environment, Food & Rural Affairs (Defra) and other departments that hold development funding, prior to final review
by the Prime Minister and public announcement by the Chancellor. Department budgets are outlined in a multi-year comprehensive
spending review, but subject to annual modification. The three departments are also responsible for the operation of ICF.
DFID's internal budget is not subject to further parliamentary approval. Also, DFID’s Business Plan for 2011 to 2015 sets out the
coalition government’s priorities. DFID's operational plans, which include internal divisional plans as well as regional and country
operational plans, are developed in 5-year cycles (known as Strategic Partnerships). 372
At country level, functioning plans are developed by partnering country office staff in negotiation with national ministries, to reflect
local needs and priorities of national objectives. Accordingly, country offices are then able to determine an appropriate funding
367http://www.parliament.uk/site-information/glossary/budget-resolutions/#jump-link-3
and
http://eurocrisislaw.eui.eu/country/uk/topic/budgetary-process-changes/
368 International Climate Fund. Policy paper. (2015). Retrieved March 30, 2016, from https://www.gov.uk/government/publications/internationalclimate-fund/international-climate-fund
369 Friends of the earth, (2015, November), Climate Finance, Retrieved April 1, 2016, from
https://www.foe.co.uk/sites/default/files/downloads/briefing-climate-finance-paris-negotiations-93356.pdf
370 Submission of Strategies and Approaches, (2014), United Kingdom.
371 International Climate Fund (ICF) Implementation Plan 2011/12 – 2014/15 Technical Paper. (n.d.). doi:10.1017/CBO9781107415324.004
372 OECD (2014)
117
approach, whether through projects and partnerships with international or local organizations, or through general budget support to
governments.373
Availability of projected levels of public financial resources
●
●
●
373
Forward information of the budget framework is contained in the Spending Reviews. Most recent was the 2013
Spending Review which covered 2015/16.
Also, forward information on planned annual expenditure in the UK partner countries is published in DFID’s Annual
Report and Accounts and Operational Plans.
UK’s ICF spends 60 percent of its funds to multilateral channels and 40 percent to bilateral channels.
Donor Tracker, (n.d.) UK Budget Process, Retrieved March 20, 2016 from http://donortracker.org/donor-profiles/uk/budget-process.
118
9.3.24. United States
Type of Government
Fiscal Year
When Budget is Proposed
When Budget is Approved
Multi-year Budget Process
Who Approves the Budget
Constitution-based federal republic374
1 October - 30 September
January – February
September
Annual budget only
Congress
Overall budget framework
The United States budget process sets priorities for the federal government by determining how much should be spent through
appropriations for annually-funded programs, known as discretionary spending. 375 U.S. Agencies formulate budget proposals, in
conjunction with the President’s Office of Management and Budget (OMB) that include both programmatic discretionary spending
and contributions through multilateral channels and present these funding proposals in the President’s Budget Request to Congress
each year. The President has delegated authority to OMB to apportion the budgetary resources available for most executive branch
agencies.376 All legislation and other submissions to Congress must also be cleared by OMB, making it a very influential body in the
budgetary process.377
Each year, Congress must develop and pass a set of appropriations bills for the following fiscal year. There is no multi-year budget plan
although annual budgets are approved in light of 10-year spending forecasts. These appropriations, once passed, are then managed
by OMB in how the funds are utilized by the agencies. Because all legislation must originate in Congress, it is this “power of the purse”
that drives the congressional involvement in the budget process.
Deadline
Annual Budget Process of United States378
April
OMB Planning Guidance
The Office of Management and Budget (OMB) issues a letter to departments in April, known as planning guidance.
This letter specifies the general funding levels for each department.
Budget Formulation by Agencies
Each agency initially formulates budget requests on an annual basis for the upcoming year for which the Congress
needs to make appropriations. Budget proposals are submitted to Office of Management and Budget (OMB).
OMB Budget Review
OMB analyzes each agency submission within the context of the overall federal budget and recommends what
level of funding agencies can request from Congress. By January, budget proposals are finalized and compiled for
the President’s budget. In January: Congressional Budget Office (CBO) releases The Budget and Economic Outlook
with 10-year budget projections.
President’s Budget Request Submission to Congress
The President submits the President’s Budget Request to Congress.
February to
September
January
February (first
Monday)
374
The Constitution of the United States divides the federal government into three branches to ensure a central government in which no individual
or group gains too much control: (1) Legislative – Makes laws (Congress), (2) Executive – carries out laws (President, Vice President, Cabinet), and
(3) Judicial – Evaluates laws (Supreme Court and Other Courts). The United States Congress is a bicameral legislature composed of a House of
Representatives (lower house) and a Senate (upper house). (United States of America. “Branches of Government”.)
375 Peter G Peterson Foundation. “Federal Budget Process: A Primer”.
376 (WH)
377 (OECD)
378 White House. “Budget Concepts and Budget Process”.
OECD. “Budgeting in the United States”.
119
April 15
August
September 30
Congressional Budget Resolutions
Congress prepares a Congressional Budget Resolution, which outlines a budget plan for at least five years and sets
limits for annual discretionary spending. The budget resolutions are non-binding, fiscal blueprints that guide the
Appropriations Committees as they undertake their work. In recent years this deadline is regularly missed.
Congressional Appropriations and President Signature
Congress must pass 12 appropriations bills each year to fund specific departments and agencies of the Federal
government for the next fiscal year. Appropriation bills originate in the House and must be agreed to by the
Senate. Some authorizing legislation expires after one year, some expires after a specified number of years, and
some is permanent.379 Historically, Congress has rarely enacted all appropriations on time, and oftentimes two or
more individual appropriations are rolled together to create an Omnibus Appropriation. When one or more
appropriations bills has not been agreed to by this date, Congress usually enacts a joint resolution called a
“continuing resolution,’’ (CR) which is an interim or stop-gap appropriations bill that provides authority for the
affected agencies to continue operations at some specified level until a specific date or until the regular
appropriations are enacted. The Congress must present these CRs to the President for approval or veto.
President Signature
The President signs the bills and CRs approved by Congress.
Climate finance in the budget process
The United States has a variety of instruments through which it channels climate finance, as outlined below, and considers “climatespecific” funds as those that are assessed to support adaptation and mitigation. The United States measures and tracks public climate
finance through the following channels in its reporting under the UNFCCC:
●
●
●
Congressionally appropriated finance, which is delivered through both bilateral and multilateral channels, and includes
foreign assistance funding for international development through, inter alia, USAID, the Departments of Treasury and State,
and the Millennium Challenge Corporation;
Development finance through the Overseas Private Investment Corporation (OPIC); and
Export credit finance through the U.S. Export‐Import Bank (Ex‐Im). 380
U.S. contributions through multilateral channels are requested by agencies and are appropriated as “Multilateral
Economic Assistance” in the annual budget.381 For example, requests by State Department for contributions to the GCF.
Climate finance through bilateral channels are often integral to specific agency programs and may be subject to
congressional appropriation.
Planning at operational level
The Office of Management and Budget (OMB) appropriates, or specifies, the amount of funds that an agency may use according to a
time period, program, project or activity. Actions taken by agencies make use of these appropriated funds in order to carry out their
programs, projects or activities. Agencies engage in partnerships with organizations through one of three types of arrangements:
●
●
Contracts (Acquisition): Direct purchase of goods or services by the federal government.
Grants (Assistance): Transfer of funds to another party for the implementation of programs that contribute to the public good
and further the objectives of the Foreign Assistance Act. A grant is distinguished from a contract, which is used to acquire
property or services for the federal government's direct benefit or use.
379
White House. “Budget Concepts and Budget Process”.
UNFCCC. “U.S. Submission on methodologies and systems used to measure and track climate finance”.
381 US Congress. “H.R. 4818 - Consolidated Appropriations Act, 2005”.
380
120
●
Cooperative Agreement (Assistance): Similar to a grant, but with substantial involvement from the Agency. A cooperative
agreement is distinguished from a grant in that it provides for substantial involvement between the federal agency and the
recipient in carrying out the activity contemplated by the award.
The type of arrangement depends on the type of work, purpose of the funding, and nature of the relationship between the Agency
and the implementing partner. 382 Each agency has its individual approach to planning, agreeing with the partner country and
implementing its assistance. These approaches range from single-year planning and reporting systems to multi-year compacts.
The United States Agency for International Development (USAID) 383 manages the United States development assistance. USAID has a
Joint Strategic Plan with the Department of State for 3-year fiscal years (e.g. 2014-2017). USAID manages bilateral development
assistance through 5-year Country Development Cooperation Strategies (CDCS) or Regional Development Cooperation Strategies
(RDCS).384 USAID also operates under a 5-year policy framework to guide its development priorities. 385
The State Department 386 manages U.S. foreign affairs. The Millennium Challenge Corporation (MCC) 387 frequently has multi-year
compacts with partner countries. The Overseas Private Investment Corporation (OPIC) 388 is a key US development finance institution
that mobilizes private capital for international development. The Export-Import Bank (EXIM)389 is an export credit agency of the United
States that provides export credit, low-cost, and long-term debt financing.
Availability of projected levels of public financial resources
●
●
●
The United States uses an annual budget process, which is normally passed by October 1 each year.
Indicative information may be available on programmatic funding up to 5 to 10 years beyond the current fiscal
year. Bilateral channels, however, may offer longer forecasts, but are generally subject to bilateral agreements
with partner countries.
Bilateral programmatic information is available through USAID’s Country Development Cooperation Strategies
(CDCSs) which are generally 5-year indicative plans.
_________________________________________
382
(UNFCCC)
USAID, Retrieved March 1, 2016, from https://www.usaid.gov/
384 USAID, Country Strategies, Retrieved April 30, 2016 form https://www.usaid.gov/results-and-data/planning/country-strategies-cdcs
385 USAID, USAID Policy Framework 2011-2015, Retrieved March 1, 2016 from https://www.usaid.gov/documents/1870/usaid-policy-framework2011-2015
386 US Department of State. Retrieved March 1, 2016, from www.state.gov/
387 Millennium Challenge Corporation. Retrieved March 1, 2016, https://www.mcc.gov/
388 Overseas Private Investment Corporation. Retrieved March 1, 2016, https://www.opic.gov/
389 Export-Import Bank of the United States. Retrieved March 1, 2016, http://www.exim.gov/
383
121