Component 4
Mainstreaming climate goals
Planning and mobilizing climate-aligned investments will be best sustained and most impactful if the country’s climate goals, as outlined in NDCs, NAPs, and LT-LEDS, are fully integrated into wider economic and development planning and budgeting processes.
Mainstreaming requires first comprehending long-term systemic changes that may be needed in economic and social infrastructure to shift toward low-emission and climate-resilient development and then building fair transition pathways into sectoral planning and finance frameworks. Integrating climate into the mandate and tools of ministries of economy and finance and identifying opportunities for greening the financial systems also helps to mainstream climate goals. Mainstreaming aids countries in mobilizing external resources and redirecting internal finance flows in alignment with climate targets.
Steps
- Step 9Map national and sectoral planning, budgeting, and finance frameworks and their synergies with climate goals implementation
- Step 10Create a roadmap to integrate climate goals into national and sectoral planning policies, budgeting, and investment frameworks
- Step 11Assess opportunities to green the financial systems
Step 9
Map national and sectoral planning, budgeting, and finance frameworks and their synergies with climate goals implementation
Mapping existing national and sectoral planning, budgeting, and finance frameworks involves systematically identifying and analyzing key planning, budgeting, and investment frameworks within the public sector to discern opportunities and gaps. This comprehensive process includes evaluating public-sector initiatives like national and sectoral planning; finance, economic, and fiscal policies; and budgeting frameworks designed to allocate public funding and promote the greening of the financial system.
Example: Rwanda mapped its existing investment frameworks, including the Green Growth and Climate Resilience Strategy (GGCRS), to align with its NDC and SDG priorities. Through stakeholder engagement with government agencies, private investors, and development partners, the country identified and validated key investment priorities such as renewable energy, sustainable agriculture, and urban resilience. This process also revealed gaps in financing and coordination, which were addressed through capacity-building initiatives and targeted policy reforms. The outcome was a pipeline of bankable projects that successfully attracted international and private-sector financing, demonstrating the effectiveness of this strategic approach.
Step 10
Create a roadmap to integrate climate goals into national and sectoral planning policies, budgeting, and investment frameworks
Developing a roadmap for integrating and aligning climate goals with national and sectoral planning policies, budgeting, and investment frameworks aims to synchronize targets and associated timelines and clearly define concrete implementation roles for the various stakeholders involved.
An important instrument in this process is climate budget tagging (CBT), which allows governments to categorize, track, and evaluate public expenditures related to climate action. By tagging budget items that contribute to climate goals, policymakers can ensure that financial resources are allocated efficiently and effectively toward achieving climate objectives. CBT also enhances transparency and accountability, making it easier to monitor progress and adjust strategies as needed. Integrating this tool into the budgeting framework will help to better align national and sectoral financial planning with overarching climate goals.
Example: Indonesia’s Low Carbon Development Initiative (LCDI) integrates climate goals into its national and sectoral planning through the National Medium-Term Development Plan (RPJMN), aligning climate objectives with economic and social development goals. The initiative prioritizes key sectors like energy, forestry, and agriculture while leveraging data-driven models to demonstrate the economic benefits of low-carbon policies. Indonesia also introduced fiscal tools like green bonds and carbon pricing to align budgets with climate targets and mobilize financing. To address gaps such as limited institutional coordination and technical capacity, the LCDI implemented capacity-building programs and enhanced cross-government collaboration. This approach has mainstreamed climate action into Indonesia’s development agenda, promoting sustainable growth and resilience.
Step 11
Assess opportunities to green the financial systems
Build upon the roadmap developed in Step 10 by exploring opportunities to facilitate the redirection of public and private investment flows toward climate-aligned pathways. This may involve various approaches, including Public Financial Management (PFM), Public Investment Management (PIM), Public Administration and Management (PAM), and public procurement, among others. It may also involve working with key actors in the financial system, such as central banks and regulators, to more systematically integrate climate risks into decision-making.
Example: Jamaica, with support through the NDC Partnership, from the French Development Agency (AFD), has assessed opportunities to green its financial systems, aligning them with its climate goals. Key efforts include exploring the development of a green bond market to attract private-sector investment for renewable energy and resilient infrastructure, as well as building the capacity of financial institutions to integrate environmental, social, and governance (ESG) criteria into lending practices. The country has also introduced policy reforms to incentivize low-carbon investments and engaged stakeholders to identify barriers and opportunities for sustainable financing. These initiatives have strengthened Jamaica’s financial system, enabling it to better support NDC implementation and promote climate resilience.
Lessons from the NDC Partnership’s Readiness Support for Greening Central Banks Initiative
Central banks play a key role in climate action. They are crucial to safeguarding financial stability, sending consistent and persistent market signals regarding climate-related risks and opportunities and implementing necessary corrective measures to recalibrate the financial system and protect vulnerable populations. However, central banks in many developing countries lack sufficient capacity and tools to effectively address these challenges.
During COP26, the NDC Partnership launched the Readiness Support for Greening Central Banks (GCB) initiative in response to developing countries’ requests. This initiative equips central banks with knowledge, institutional capacities, and systems to adopt precautionary approaches to climate risk, promote green investments, and address the climate-finance gap.
Through the GCB Initiative, central banks align their mandate and supervisory tools with the latest science to mobilize finance for NDCs, NAPs, and LT-LEDS, ensuring financial stability crucial for poverty reduction and equity, as climate change and financial crises disproportionately impact vulnerable communities. To date, 18 central banks covering 25 countries are receiving coordinated in-country support through the NDC Partnership, from the French Development Agency (AFD), German Federal Ministry for Economic Affairs and Climate Action (BWMK), European Investment Bank (EIB), United Kingdom (UK) and the World Bank as well as through the NDC Partnership Action Fund (PAF).
Learn more about the Readiness Support for Greening Central Banks Initiative, Emerging Experiences, and Recommendations here.
Support resources
The following resources can be considered. Explore the NDC Partnership Knowledge Portal Climate Toolbox for additional mainstreaming climate goals resources.