What is the purpose of a green budget?
The green budget is a new classification of budgetary and fiscal expenditure according to its impact on the environment and an identification of public resources of an environmental nature. Its primary purpose is not to compare one local authority with another, but to provide the local authority with a snapshot of the impact of its budget on the environment at a given point in time, and to enable it to monitor changes over the years by comparing the efforts made in this area.
Green budget expenditure is classified into four types according to its impact: favourable, mixed, neutral and unfavourable.
- Favourable expenditure : This category covers three types of expenditure: expenditure with a primary environmental objective or directly contributing to the production of an environmental good or service, and expenditure without an environmental objective but with a proven indirect impact,
- Mixed expenses : investment expenditure whose medium- and long-term impact is favourable in terms of climate objectives, even though the work generates short-term environmental pressures. This is the case for major infrastructure or public transport projects.
- Neutral expenditure : expenditure with no significant effect on the environment.
- Unfavourable expenditure : this expenditure directly harms the environment or encourages behaviour that is unfavourable to the environment.
Expenditure is assessed according to 3 environmental criteria:
- Mitigating climate change This corresponds to the objectives of the transition to a low-carbon economy and carbon sequestration by ecosystems.
- Adapting to climate change This relates to measures that promote resilience in the face of events directly correlated with climate change.
- Biodiversity This refers to the objectives of preserving, protecting and restoring biodiversity and ecosystems, as well as the sustainable management of natural, agricultural and forestry areas.
The five main pressures on biodiversity :
- Change of land use
- Pollution
- Direct use of resources
- Climate change,
- Exotic and invasive species
➔ Definitions used in the report on the environmental impact of the State's Green Budget FPL 2025
Regulations
According to article 179 of French Finance Act no. 2019-1479 of 28 December 2019, the Government is to submit to Parliament, as an annex to the Finance Bill, a report on the «environmental impact of the budget». This report provides an exhaustive and consolidated view of the information available on the resources devoted to environmental policies. This report is made up of various parts, including a section called the «green budget», which presents the environmental impact of budget appropriations and tax expenditure included in the Finance Bill.
There is currently no set framework for the conceptualisation of a green budget. It can be as simple as reporting which consists of identifying, among a local authority's expenditure, those which are favourable and those which are unfavourable to the ecological transition, in order to produce an annexed document presented with the budget.
The 2025 green budget of the Coeur de France Community of Communes :
