Sri Lanka Advances Climate-Responsive Public Financial Management through Climate Budget Tagging Training

Sri Lanka took an important step towards improving climate responsive public financial management through a two-day capacity development training programme on Climate Budget Tagging (CBT) on 22-23 October 2026 in Colombo.

This training programme was organised by the Institute of Policy Studies of Sri Lanka (IPS) in collaboration with the National Budget Department (NBD) of the Ministry of Finance and the United Nations Development Programme (UNDP). The training programme gathered Ministry of Finance officials, budget and planning officials from line ministries, and climate focal points to improve their skills in applying CBT in Sri Lanka’s budgeting process.

IPS Research Fellows Dr Manoj Thibbotuwawa and Dr Erandathie Pathiraja and Research Officer Nimesha Dissanayaka served as the experts for the training sessions. The training builds on the Climate Public Expenditure and Institutional Review (CPEIR) for Sri Lanka covering 2016–2025, in which the IPS provided analytical and technical expertise. While CPEIR provides a retrospective assessment of climate-related public spending, CBT provides a forward-looking mechanism to institutionalise the identification, tracking, and reporting of climate-relevant expenditure through the annual budget cycle.

The first day focused on understanding and applying the CBT methodology, including the identification, classification, and weighting of climate-relevant expenditure as mitigation, adaptation, or loss and damage, supported by practical sector examples. The second day focused on institutionalising CBT within Sri Lanka’s public financial management system, covering its integration into the annual budget cycle, institutional roles, data systems, and quality assurance. Practical mock budget-tagging exercises and Menti-meter quizzes brought the two days together, emphasising the importance of embedding CBT into routine budget preparation, review, and reporting.

Climate Budget Tagging provides a systematic approach to identifying and tracking public expenditure that contributes to climate objectives. By making climate-related allocations more visible within the national budget, CBT can strengthen transparency and accountability, support evidence-based decision-making, and improve the alignment of public spending with national climate priorities.