Dáil Éireann Debate, Tuesday - 14 October 2025
392. Deputy Jennifer Whitmore asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation for an update on his Department’s development of ‘green budgeting’ analysis of expenditure allocations in order to align with performance reporting, as committed to in the Climate Action Plan 2025 and due in Q4 2025; and if he will make a statement on the matter. [55495/25]
Amharc ar fhreagraMy Department’s work on green budgeting initiatives seeks to better embed climate and environmental information within the budgetary process with a view to informing the policy choices and budgetary decisions Government makes, intending to improve outcomes.
The main outputs of this work are published annually with the Revised Estimates Volume (REV), in December of each year. As with previous years, my Department intends to include the results of its green budgeting analysis within the REV publication in December 2026, and to accompany this with a paper that outlines the analysis and results, including detailing the link between green budgeting and the performance framework.
This is on track for completion in Q4 2025, in line with the commitments in the Climate Action Plan 2025.
By way of background on this initiative, since 2019 the Department of Public Expenditure has tracked climate-related spending in its annual reporting on public expenditure, identifying investments and operational expenditure that contribute directly or indirectly to a low-carbon, sustainable economy. Progressive improvements have been introduced year-after-year, and Ireland is considered to be at the forefront of international developments in this space. Monitoring of climate and environment related expenditure was extended at REV 2024 to include six environmental criteria, as modelled on the criteria of the EU Taxonomy for Sustainable Activities. We now also capture expenditure allocations which may have unfavourable effects on climate and environmental outcomes in this analysis.
As of the latest published assessment as part of REV2025, c.€7bn of Voted Expenditure was allocated to projects and programmes considered likely to have a favourable impact on the climate and environmental criteria selected for assessment. Some €2.1bn of expenditure was anticipated to have an unfavourable impact, including important social programmes such as the Fuel Allowance, those necessary but fossil-fuel intensive services such as security and defence provision, and necessary infrastructure investments such as those in roads and buildings, alongside our funding for broad based agriculture supports and subsidies for industrial growth leading to higher energy consumption. These programmes all involve some indirect but unfavourable impacts, and the impetus is on policy holders to consider the negative impacts of these spending programmes and to mitigate these impacts accordingly.
An element of the performance framework work ties in with the macroeconomic modelling on the impacts of climate change and climate action, reporting on carbon tax policies (published alongside the Expenditure Report at Budget 2026), and climate considerations in appraisal which combine to make Government action on climate change more transparent and effective and to raise awareness and understanding of the specific impacts of individual climate and environmental policies. Work to further align the green and performance budgeting workstreams will mean a strengthened link between allocation and outcome, and allow for better understanding of the climate and environmental impacts of expenditure allocations.
Ultimately, the additional information generated through these initiatives has the potential to support changes to policy making that will result in improved environmental outcomes, cost effectiveness and value for money.
Green budgeting initiatives and the wider performance framework play an important role in enhancing the level of accountability and transparency surrounding Government spending on climate action and the environment. They also generate insights that can be used to inform the evolution of climate policy, making sure that climate action is integrated within the budgetary process.
