About the event
The Public Financial Management for Climate Action (PFM4CA) for ECA is an integrated framework that supports country-level results by building country ownership and institutional capabilities for mitigation and adaptation results. The framework seeks to build on systematic and evidence-based diagnostics to prioritize better and sequence operational support in green PFM. Its primary focus is on the ‘how ‘, optimizing promised results across different time horizons, and mitigating risks or pitfalls. For example, World Bank diagnostics such as the Country Climate Development Reports (CCDR) and Climate Change Institutional Assessments (CCIA) serve as a basis for assessing a given country’s ambition, ability, and actions.
The PFM4CA engagement framework takes a whole of government approach to achieving country-level results. Figure 1 sets out the key points of focus of the engagements. In terms of climate action, these start with a more systematic understanding of the overall country’s strategic orientation and organization for climate action for mitigation and adaptation. The PFM4CA engagement framework begins with the knowledge that national, sub-national, and SOE institutional sectors will all be critical to delivering on climate actions across the ECA region. The PFM4CA is built on the premise that a combination of taxation, expenditure, and regulatory measures can help deliver climate action objectives (e.g., GHG emissions results or reduced acute or chronic D&L risks).
Given the long-term implications of inertia and green transition trajectories associated with public infrastructure investments and non-financial asset governments, this area of PFM receives particular attention, given the role of specialized PFM sub-systems dealing with financial and physical management.
Climate action results will depend on the effectiveness of PFM-related policies and practices. The ability to mainstream climate action through PFM leavers will depend on the existing foundational capabilities associated with PFM. Improving climate-informed public investment in a more comprehensive and impactful manner will be challenging if essential Public Investment Management (PIM) capabilities are missing. Similarly, it will be difficult to conduct impact evaluations if the public sector lacks basic data systems. A key objective of the PFM4CA is to map out better the interplay of foundational PFM capabilities with ‘frontier’ climate action demands.
The PFM4CA initiative also works to promote awareness, application, and adoption of online decision-support tools for better climate actions. Through an integrated people, process, and technology engagement framework, it aims to stimulate public sector modernization for more inclusive and climate-smart development across the Europe and Central Asia Region (ECA), and beyond. At the heart of this approach is the ability to catalyze a more comprehensive set of country-level PIM, PAM, and decentralization engagements with a “less memo, more demo approach.” Climate is driving across the region to move “business as usual” PIM, PAM, and decentralization business processes. Functional resources such as the Geospatial Planing and Budgeting Platform (GPBP) – which can be found on pim-pam.net — can help realize this opportunity rather than have countries miss opportunities due to lack of end-user-friendly demonstrated methods and tools.
Results Framework
Day 1: Executive Briefing
Foundations of PFM for Climate Action
This first session aims to present an overview of the science behind climate change, along with a summary of anticipated global and regional changes specific to ECA countries. It will explore the significance of assessments conducted by the Intergovernmental Panel on Climate Change (IPCC) and their implications for the future climate and socio-economic effects.
The response to these changes will be covered including the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Accord and the Nationally Determined Contributions (NDCs). Lastly, this session will explore various strategies for addressing climate change, including efforts to mitigate greenhouse gas emissions and foster a low-carbon future.
It will also emphasize regional differences and the importance of promoting adaptation measures and building resilience to climate impacts.
Suggested Readings:
IPCC, 2021: Summary for Policymakers. In: Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Péan, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY
https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_SPM.pdf
United Nationas (2015). The “Paris Agreement” of the United Nations Framework Convention on Climate Change.
https://unfccc.int/sites/default/files/english_paris_agreement.pdf
NDC Registry in accordance with Article 4, paragraph 12 of the Paris Agreement – you can select your country from the table and download the NDC:
This session will build on the understanding of climate in the first session to address the economic implications of climate change. It will explore various examples of climate-related impacts and their economic impacts to provide an understanding of the growing challenges faced by countries.
These climate impacts encompass both sudden disasters and gradual incremental changes. Subsequently, the session will analyze the costs associated with responding to climate change and possible transition risks. This will cover the effort required to achieve mitigation targets as well as estimates for adaptation measures.
Finally, the role of government finance to support the national climate response will be considered in relation to other potential climate finance sources.
Suggested Readings:
World Economic Forum (2022). The Global Risks Report 2022 17th Edition.
https://unfccc.int/NDCREGhttps://www.weforum.org/publications/global-risks-report-2022/
World Economic Forum (2023). This is what the climate crisis is costing economies around the world.
https://www.weforum.org/stories/2023/11/climate-crisis-cost-global-economies/
United Nations Environment Programme (2024). Adaptation Gap report 2024 – “Come hell and high water”. Nairobi.
https://www.unep.org/resources/adaptation-gap-report-2024
The White House (2021). Executive Order on Climate-Related Financial Risk. Washington, DC.
This session aims to highlight the significant fiscal impact of climate change, making it a critical consideration in public financial management. Participants will gain insight into climate change as a fiscal risk and the specific channels through which effects like loss and damage can be manifested. Additionally, the costs and benefits of climate actions, particularly in adaptation and mitigation, will be examined to understand their relevance to the sustainability of public finances. The objective of this module is to deepen understanding of how fiscal policy can be aligned with climate goals, based on the Paris Agreement and its implementation mechanisms such as NDCs and NAPs. Moreover, the session is intended to prompt participants to reconsider the role of finance ministries in climate governance, while also offering a rationale for the climate-responsive management of public resources.
Suggested Readings:
Coalition of Finance Ministers for Climate Action (2023). Strengthening the Role of Ministries of Finance in Driving Climate Action. A Framework and Guide for Ministers and Ministries of Finance.
https://www.financeministersforclimate.org/sites/cape/files/inline-files/
International Monetary Fund (2022 How to Make the Management of Public Finances Climate-Sensitive–“Green PFM”. Washington, DC.
https://www.imf.org/en/Publications/Fiscal-Affairs-Department-How-To-Notes/Issues/
Organisation for Economic Co-operation and Development (2021). Green Budgeting: Towards Common Principles. Brussels.
https://economy-finance.ec.europa.eu/publications/green-budgeting-towards-common-principles_en
United Nations Development Programme (2022). Global Climate Public Finance Review.
https://www.undp.org/publications/undp-global-climate-public-finance-review
World Bank (2020). World Bank Reference Guide to Climate Change Framework Legislation. Equitable Growth, Finance and Institutions Insight. Governance. Washington, DC.
https://openknowledge.worldbank.org/entities/publication/
De Kleine Feige, Annette I. (2021). State-Owned Enterprises and Climate Action. Washington, D.C.: World Bank Group.
https://documents.worldbank.org/en/publication/documents-reports/
Climate Risk Workshop – Samruk-Kazyna (Kazakh SOE)
https://pfm4ca.com/wp-content/uploads/2024/12/PFM4CA-Risk-Workshop_KAZ-SOE.pdf
Climate Risk Workshop – Ministry of Finance
https://pfm4ca.com/wp-content/uploads/2024/12/PFM4CA-Risk-Workshop_MOF.pdf
Climate Risk Workshop – City of Vienna
https://pfm4ca.com/wp-content/uploads/2024/12/PFM4CA-Risk-Workshop_CoV.pdf
The objective of this session is to introduce Green Public Financial Management as an innovative approach to managing public finances in a sustainable and climate-sensitive way.
The focus is on adapting PFM functions to support climate action, inform climate policy, and effectively implement climate strategies. Participants will explore specific entry points within the PFM cycle to integrate climate considerations into PFM practices, systems, and frameworks. The session will also demonstrate how diagnostic tools, such as the CCIA and PEFA Climate, can be leveraged to identify gaps, opportunities, and recommendations for climate governance reform.
Additionally, participants will learn to identify and pursue relevant reforms while considering the political economy aspects related to climate change.
Suggested Readings:
Neil Bird (2017). Budgeting for NDC action. London: Overseas Development Institute.
https://cdkn.org/sites/default/files/files/National-budgeting-for-NDCs_web.pdf
United Nations Development Programme (2021). Budgeting for Climate Change – A Guidance Note for Governments to Integrate Climate Change into Budgeting. Bangkok.
La Cascia,Hunt; Fozzard,Adrian; Annandsingh Rattia,Diana Carolina; Saito,Yolanda (2021). Green Public Procurement – An Overview of Green Reforms in Country Procurement Systems. Washington, D.C.: World Bank Group.
INTOSAI (2010). Auditing the Government Response to Climate Change Guidance for Supreme Audit Institutions.
https://www.environmental-auditing.org/publications/studies-guidelines/
CIPFA (2021). Evolving Climate Accountability: A Global Review of Public Sector Environmental Reporting.
https://insights.cipfa.org/evolving-climate-accountability/
ADB (2023). Governance Brief – Green Public Investment Management. Governance Aspects of Strengthening Infrastructure Sustainability.
https://www.adb.org/publications/green-public-investment-management
The goal of this session is to explore the challenges and hurdles of implementing a Green Budgeting approach through a good-practice example. Participants will be guided through the lessons learned by the Austrian Ministry of Finance when integrating climate considerations into the budget cycle. Session 5 is designed as a fireside chat, where participants can gain background information in the form of a moderated interview.
| Time | Activity | Presenter(s) |
|---|---|---|
| 09.00 | Welcome Presentation of PFM4CA program Introduction of lecturers Pre-training evaluation quiz |
World Bank and Austrian School of Government (ASG) representatives Kai Kaiser Antonia Ida Grafl Jeremy Hills |
| 09.30 | Session 1: Climate Change and Our Response | Jeremy Hills |
| 11.00 | Break | |
| 11.15 | Session 2: The Economics of Climate Change | Jeremy Hills |
| 13.00 | Lunch Break | |
| 14.00 | Session 3: The Interplay of Climate Change and Public Finances | Antonia Ida Grafl |
| 15.30 | Break | |
| 15.45 | Session 4: Climate-sensitive Public Financial Management | Antonia Ida Grafl |
| 17.30 | Social gathering Fireside chat |
Andreas Rajchl (tbc.) Jose Delgado (tbc.) |
DAY 2: Taking Agency
Practical Methods for Climate Action in PFM
Building on the momentum for reform generated on the first day of the course, the second day will equip participants with the tools to take ownership and drive sustainable change in Public Financial Management (PFM).
The aim is to demonstrate the wide range and types of problems to which this approach can be applied, from finding solutions to technical challenges to systematically overcoming political economy barriers. The day begins with an introduction to the core principles of problem- and stakeholder-oriented service design, offering an overview of well-established frameworks such as Problem-Driven Iterative Adaptation (PDIA) and Design Thinking. Participants will explore why these frameworks can be pivotal to efficient PFM and how they provide practical methods for designing and implementing sustainable solutions to complex challenges, particularly within PFM for climate action.
They will gain hands-on tools for creating solutions tailored to a specific country’s context and the unique needs and challenges of its stakeholders. To highlight the benefits of these approaches, participants will examine real-world use cases from the public sector, with a special focus on PFM for climate action.
To apply the tools learned in the first session, this workshop will first guide participants in identifying specific challenges within their countries, drawing from the gaps, opportunities, and recommendations discussed on the first day.
These climate change-related challenges may originate either within the PFM system or from external factors that impact it. The identified challenges will be assessed based on defined criteria, such as complexity, suitability, and cross-country relevance, and participants will vote to select three key challenges.
Divided into three groups, participants will then focus on one challenge each, refining the core problem and identifying relevant stakeholders, their needs, their pain points, and further relevant characteristics.
In the third session, participants will have the opportunity to apply various tools and methods to identify potential solutions for the defined problem.
They will select one idea as an example, outline a possible solution, and create a quick prototype. Participants will then present the challenge, along with their ideas and solutions, to the group. Having experienced a first full cycle of problem definition, ideation, prototyping and testing, participants will reflect on the potential use of the practiced frameworks in their own organizations to plan future initiatives respectively.
The identified challenges and proposed solutions can ultimately serve as the foundation for launching a multi-partner program, guided by the problem- and stakeholder-oriented service design frameworks discussed.
Salimah Samji, Matt Andrews, Lant Pritchett and Michael Woolcock (2018). PDIA toolkit – A DIY Approach to Solving Complex Problems. Cambridge, MA: Havard Kennedy School.
https://bsc.hks.harvard.edu/tools/download-the-pdia-toolkit/
IDEO (2015). The Field Guide to Human Centered Design. Canada.
| Time | Activity |
|---|---|
| 8.30 AM | Registration |
| 9.00 | Welcome & Introduction |
| 9.15 | Session 1: How to Design and Implement Solutions for Complex Problems |
| 10.45 | Coffee Break |
| 11.00 | Session 2: Workshop – Identification and Definition of Challenges |
| 12.30 | Lunch |
| 1.30 PM | Session 3: Workshop – Ideation and Prototyping for Solutions |
| 3.30 | Presentation of Results and Discussion |
| 4.15 | End |
Presenters and Facilitators: Gerhard Embacher-Köhle, Fiona Hahn, Dušan Janković
DAY 3
Regional Experiences and Future Directions
Date: December 13, 2024
Venue: World Bank office (Room 21-5 / floor 21st – Access code: tbc)
GALAXY Tower, Praterstraße 31, 1020, Vienna
- 9:30 AM: Presentation: Climate-informed PIM Regional Survey
- 10:30 AM: Regional Experience Highlights
- Albania: PIM Curriculum, Single Pipeline
- Georgia: Green Budgeting and ePIM
- Serbia: Real Property Valuation
- North Macedonia: Public Investment Management
Performance audit of public investments (Supreme Audit Institution)
- 1:30AM: Coffee Break
- 11:45 AM: Priorities for 2025: Building a Community of Progress
- 12:15 PM – 1:45 PM: Next Steps
Please note:
- Participants should bring laptops or relevant devices to the workshops.
- Printed versions of suggested readings and presentations will not be provided at the event.
Key Citations
Adrien Bilal & Diego R. Känzig, 2024. “The Macroeconomic Impact of Climate Change: Global vs. Local Temperature,” NBER Working Papers 32450, National Bureau of Economic Research, Inc., August
Andrews, M., L. Pritchett, S. Samji and M. Woolcock 2015. Building capability by delivering results: Putting Problem-Driven Iterative Adaptation (PDIA) principles into practice. In: OECD 2015. A GOVERNANCE PRACTITIONER’S NOTEBOOK: ALTERNATIVE IDEAS AND APPROACHES. Pp. 123-133.
International Monetary Fund (IMF) 2022a. How to note: How to Make the Management of Public Finances Climate-Sensitive—“Green PFM”. Retrieved from https://www.imf.org/en/Publications/Fiscal-Affairs-Department-How-To-Notes/Issues/2022/12/08/How-to-Make-the-Management-of-Public-Finances-Climate-SensitiveGreen-PFM-525169
Organisation for Economic Co-operation and Development (OECD) 2021. Green Budgeting: Towards Common Principles. Retrieved from https://economy-finance.ec.europa.eu/publications/green-budgeting-towards-common-principles_en
Stechemesser, A., Koch, N., Mark, E., Dilger, E., Klösel, P., Menicacci, L., Nachtigall, D., Pretis, F., Ritter, N., Schwarz, M., Vossen, H., & Wenzel, A. (2024). Climate policies that achieved major emission reductions: Global evidence from two decades. Science. https://doi.org/adl6547
The Coalition of Finance Ministers for Climate Action (CFMCA) 2023. Strengthening the Role of Ministries of Finance in Driving Climate Action. A Framework and Guide for Ministers and Ministries of Finance. Retrieved from https://www.financeministersforclimate.org/sites/cape/files/inline-files/
Salimah Samji, Matt Andrews, Lant Pritchett and Michael Woolcock 2018. “PDIAtoolkit – A DIY Approach to Solving Complex Problems”, https://bsc.hks.harvard.edu/tools/toolkit/
IDEO, The Field Guide to Human-Centered Design, https://www.designkit.org/resources/1.html
Michael Lewrick, Patrick Link, Larry Leifer 2018. “The Design Thinking Playbook: Mindful Digital Transformation of Teams, Products, Services, Businesses and Ecosystem”
Organizers
Supporters
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