With the 2015 signing of the Paris Agreement, governments acknowledged the enormous impact that climate change has on sustainable economic growth, social progress and the reduction of inequality. The current COVID pandemic has increased the need to protect biodiversity and prevent irreversible warming.

Now is the time to shape structural reform policies that can galvanise the transition to a low-carbon economy resilient to climate change while continuing to drive productivity and economic activity. Budgetary policies have a decisive role in this regard. Hence, the design, planning and application of these policies must be in line with climate-friendly objectives and be effectively integrated in the social and economic goals for transition.

The concept of “green budgeting” alludes to the tools used to promote spending and financing policies that align with these new environmental aims. It is crucial that governments be aware of how great an impact their budgets can have in effectively reaching these climate-related commitments.

It is our duty to meet these commitments by taking action.  Given the overwhelming influence that public budgets have as instruments, not only through direct action but also by sending signals to the private sector, budget decision-makers cannot remain oblivious to the challenge of decarbonising the economy.