Integrating Sustainable Development Goals (SDGs) into national budgetary processes www.iddri.org
Context Defining the ends 2015: a year of strong international commitments for sustainable development (Agenda 2030, Paris Agreement) Now: how can we boost the implementation phase?
National budgets = primary political and economic expression of government policy
a strategic means of implementation?
The Agenda 2030 and the SDGs End state goals
Means or strategies
Context
Between 2016 and 2017: 23 countries announced measures to « align » their budgets with the SDGs In our study we looked at a sample of 9 case studies Methodology: Desk research and semi-structured interviews
Key questions
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In the context of fiscal consolidation: How do countries achieve their objective to reduce the fiscal deficit while achieving these ambitious environmental and social objectives?
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SDGs are a broad, overarching agenda vs. budgets are about making choices How do you bring these two together?
Key condition for success
Translating SDGs into a strategic understanding of the specific situation of the country ďƒ˜ SDGs as opportunity to define national strategic medium-term priorities, reflecting the 3 dimensions of SD, for example: protecting biodiversity, mitigating climate change, fighting inequality, creating decent work
Key condition for success
Example of priority setting in Slovenia:
Define strategic orientations and national development goals along the three dimensions of SD
Integrate the national goals into a Slovenia 2030 Development Strategy
Adopt performance evaluation indicators for the national budget
Key questions
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Are the SDGs a useful tool to guide choices about 1) how to spend, 2) how to reduce expenditures and 3) how to raise revenue?
SDGs as a tool to identify priority areas for spending?
Example Slovakia:
Clustering the 17 SDGs around six national priorities for 2030
transform national priorities into strategic goals with measurable target values and outcome indicators
Integrate these goals into a National Development Strategy until 2030
Development Strategy will feed into a National Investment Plan
SDGs as a tool to question taxation systems and to identify innovative sources of revenue? • Introduce new taxes Example: Colombia – HLPF 2018 A tax on plastic bags -> raises income -> creates behavioral change (-35%) • Assess the impact of existing taxes on SDGs Example: Finland – includes an assessment of the consistency of taxes (and subsidies) with national SD priorities in the budget document
SDGs as a tool to identify priority areas for reducing expenditures? In the context of a budget reduction process: • How to ensure that priorities for reducing expenses are discussed with respect to SDGs? • Could we evaluate and discuss the impact of a reduction in spending on different policies and SDGs? • And finally, as a way to weigh reduction in spending with respect to their impact on strategic SD priorities?
Other ways to use the SDGs in the budgetary process •
Improving the narrative of a budget, asking ministries to include reporting elements on the SDGs in the main budget document (Norway, Finland)
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Mapping budgets against the SDGs (Colombia, Mexico, Nepal, Assam (India))
Source: IDDRI, with data from UNDPa and UNDPb, 2017
Budget mapping for Assam and Nepal (expenditure)
How will this information be used?
Linking SDG budgeting with existing initiatives? Example France: •
Beyond GDP: Loi SAS, 13/4/2015: « Le Gouvernement remet annuellement au Parlement, le premier mardi d'octobre, un rapport présentant l'évolution, sur les années passées, de nouveaux indicateurs de richesse,(…), ainsi qu'une évaluation qualitative ou quantitative de l'impact des principales réformes engagées l'année précédente et l'année en cours et de celles envisagées pour l'année suivante, notamment dans le cadre des lois de finances. »
▪ Green budgeting: At the One Planet Summit on 12/12/2017, France supports the Paris Collaborative on Green Budgeting launched by OECD: “design new, innovative tools to assess and drive improvements in the alignment of national expenditure and revenue processes with climate and other environmental goals.” • SDGs: Comité interministériel de la coopération et de la solidarité, 8/1/2018: « Le gouvernement rendra lorsque cela est pertinent et possible ses indicateurs de performance budgétaire plus cohérents avec les ODD » - discussion on SDG budgeting taking place in the context of the elaboration process of the French SDG roadmap
Conclusion
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Integrating SDGs into budgetary processes needs a common vision about sustainable development priorities
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An opportunity to evaluate the impact of budgetary and fiscal policies and guide choices, eg. about reducing expenditures
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An opportunity to identify and prioritize investment needs
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An opportunity to assess the consistency of taxes and subsidies with the national SD priorities
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So far, SDG budgeting still in its infancy
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A risk to make the integration of SDGs into national budgetary process a purely technical exercice
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SDGs are not the first attempt to link sustainable development objectives to budgetary and fiscal policies – What do we need to move forward?
Questions to explore
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What can the EU learn from these emerging practices and debates about integrating the SDGs into budgetary processes (Finland, Slovenia, Slovakia, Spain, France)?
▪ How can the EU support Member States in aligning their budgets with their strategic medium and long-term sustainable development and climate objectives? ▪ How can the SDGs become useful in negotiating priorities in a context of budget reduction processes? Stability and Growth Pact: Guidance needed on strengthening the link between fiscal responsibility and national medium term sustainable development pathways
Thank you! CONTACT elisabeth.hege@iddri.org
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