Since 2020, and this is a first in Europe, each presentation of the finance bill (PLF) has been followed by a report on the environmental impact of the State budget. Inside it, a document classifies and quantifies public expenditure items according to their impact on the planet. This annual “environmental rating” applies to each denier allocated to a program, a mission or a ministry. Its main virtue lies in preventing any attempt at “greenwashing”, made difficult by a fine-tooth comb analysis of any budget line.
An “effort of transparency” which must be “welcomed and encouraged”, notes the Court of Auditors in a report published on July 27, recalling that France is “ahead” on this subject. The budgetary control institution, however, believes that this tool can be “improved”, and that it also encounters “limits”.
A scope still limited
First downside underlined by the sages of rue Cambon: the very limited scope of application of this rating, which is still limited to 10% of expenditure, most budgets being considered by default as “neutral”. “Such a low level of rating of expenditure with non-zero environmental effects questions the completeness of the document and its operational nature for public decision-makers in the short term”, thus tackles the financial jurisdiction. She also notices a lack of follow-up downstream, to ensure consistency between the stated ambitions and the results observed.
Among the bad students pointed out, there are the administrations upstream of the PLF, but also the parliamentarians, whom the Court judges that they do not sufficiently justify their arbitrations from the information provided by the document. It also notes that tax measures such as the exemption from VAT on fuel in civil aviation (TICPE) are not subject to this assessment, which would already lead to an increase in the amount of so-called “brown” expenditure by 7.6 Billions of Euro’s.
Towards a multiannual program
Another limit identified by the financial jurisdiction: the impossibility of the “green budget” to respond to the major issue in terms of public expenditure, namely the “convergence of the two objectives of general interest which are, on the one hand the public finances, on the other hand the mitigation of climate change and adaptation to its effects”.
To improve the monitoring of this expenditure and synchronize it with the parliamentary rhythm of public finances, the Court of Auditors also proposes to adopt a multi-annual program. “The integration of financial elements in the ecological programming laws is currently lacking. Symmetrically, the budgetary effort to be provided for the ecological transition is not yet integrated into the multi-annual trajectory of public finances”, thus summarizes the financial jurisdiction, proposing to rely on an independent third party for better consistency between the two and to check the credibility of the figures put forward. Finally, in public establishments of a certain size, the Court recommends the implementation of extra-financial performance criteria, as is the case in companies of a similar size.