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Fiscal Affairs Department
How to Make the Management of Public Finances Climate-Sensitive—”Green PFM”
Prepared by Ozlem Aydin, Bryn Battersby, Fabien Gonguet, Claude Wendling, Jacques Charaoui, Murray Petrie, and Suphachol Suphachalasai
INTERNATIONAL MONETARY FUND
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©2022 International Monetary Fund
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Composition: The Grauel Group
HOW TO NOTE
Fiscal Affairs Department
How to Make the Management of Public Finances Climate-Sensitive—”Green PFM”
Prepared by Ozlem Aydin, Bryn Battersby, Fabien Gonguet, Claude Wendling,
Jacques Charaoui, Murray Petrie, and Suphachol Suphachalasai
Names: Aydin Sakrak, Ozlem, author. | Battersby, Bryn, author. |Gonguet, Fabien, author. | Wendling, Claude, author. | Charaoui, Jacques, author.| Petrie, Murray, author. | Suphachol Suphachalasai, author. | International Monetary Fund. Fiscal Affairs Department, issuing body. | International Monetary Fund, publisher.
Title: How to make the management of public finances climate sensitive : “green PFM” / Prepared by Ozlem Aydin, Bryn Battersby, Fabien Gonguet, Claude Wendling,
Jacques Charaoui, Murray Petrie, and Suphachol Suphachalasai.
Other titles: Green PFM. | Green public financial management. | How to notes (International Monetary Fund).
Description: Washington, DC : International Monetary Fund, 2022. | Dec. 2022. | Includes bibliographical references.
Identifiers: 9798400221682 (paper)
9798400226465 (ePub)
9798400226496 (Web PDF)
Subjects: Climatic changes—Government policy. | Finance, Public.
Classification: LCSH HC79.E5 A9 2022
This How To Note accompanies Gonguet and others (2021) and was prepared under the supervision of Manal Fouad. The authors would like to recognize Lorena Rivero del Paso’s contribution and thank Torben Hansen, Sailendra Pattanayak, Carolina Renteria, and other IMF colleagues for excellent comments.
DISCLAIMER: Fiscal Affairs Department (FAD) How To Notes offer practical advice from IMF staff members to policymakers on important issues. The views expressed in FAD How To Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or its management.
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Contents
Introduction
Identifying Entry Points Within the Budget Cycle
Strategic Planning and Fiscal Framework
Budget Execution, Accounting, and Reporting
Legal Framework
Identifying Interactions with PFM Functions Across and Beyond the Budget Cycle
Fiscal Transparency
Fiscal Risk Management
Coordination with Other Public Sector Entities
How to Implement Green PFM: Some Guiding Principles
Annex 1. Climate-Sensitive Public Investment Management
References
Boxes
1. Interaction with Other Types of Priority-Based Budgeting
2. The IMF’s Recent Engagement in Areas Related to Green PFM
3. Green PFM as Part of the Legal Framework: Country Examples
4. Some Misconceptions about Green PFM
Figures
1. A Holistic View of Green PFM Practices
2. Five Guiding Principles for the Implementation of Green PFM Reforms