Environment in emerging and transition economies

Public Environmental Expenditure Management


The governance of public expenditure in the environmental sector is often weak in the EECCA countries. This has diminished environmental benefits of public spending and rendered many environmental programmes unsatisfactory to Ministries of Finance and foreign donors. Hence, members of the EECCA Environmental Finance Network of the EAP Task Force stand committed to improve transparency, accountability and efficiency of public environmental expenditure programmes.


Practical tools, developed as part of the EAP Task Force Work Programme on Environmental Finance to support this co-operation, include the St. Petersburg Guidelines on Environmental Funds in the Transition to a Market Economy, Good Practices of Public Environmental Expenditure Management (PEEM), and the Handbook for Appraisal of Environmental Projects Financed from Public Funds. These tools served to provide practical assistance to Ukraine, Kazakhstan and Moldova and countries in CEE in reforming their laws and public environmental financial institutions. Moldova and Ukraine have subsequently begun strengthening the performance of their environmental funds.


In addition, Environment Ministers at the Fifth “Environment for Europe” Ministerial Conference, held in May 2003 in Kiev, Ukraine, endorsed the Good Practices for PEEM and encouraged economies in transition to use them as a tool to strengthen the management of environmental expenditure programmes. They also called on donors to support these efforts and to cooperate with economies in transition to draw up realistic environmental expenditure programmes in line with good international practices.


In this context, the Work Programme for 2004-2007 builds upon outputs developed previously and aims to provide managers of public environmental expenditure programmes with access to modern management tools. In addition, it places emphasis on improved disclosure of information on such programmes through rating and benchmarking which could create incentives for environmental financial institutions to perform better. The Work Programme in this area envisages the implementation of three major activities, namely:

  • Performance Rating of Public Environmental Expenditure Programmes;
  • Demonstration Project(s): Improving Performance of Public Environmental Financing Institutions;
  • Training in Appraisal of Environmental Projects Financed from Public Funds.


As part of the work on performance rating of public environmental expenditure programmes, the OECD has recently conducted an overall performance review of the State Environmental Protection Fund of Ukraine. The report in both English and Russian is attached.


In order to further strengthen, the capacity of managers of public environmental expenditure programmes, the EAP Task Force has developed a number of practical tools designed to help managers implement such programmes. More information on the first training workshop on this issue is provided here.


More information on the above activities, with their objectives, specific tasks, outputs and benefits could be obtained by clicking on the links above. For additional specific information please contact Nelly PETKOVA at nelly.petkova@oecd.org.