How Your Municipality Can Start Using a Carbon Budget Framework Today

Imagine trying to manage your personal finances without knowing how much money you have in the bank. Not knowing how much you have makes it difficult to set a realistic budget,  prioritize expenses, or plan for the future. Without a clear limit, you may unintentionally overspend, fall short on essential needs, or miss opportunities for strategic investments.

Yet, many municipalities approach their climate targets in this way: pledging to reduce greenhouse gas emissions to limit global warming to 1.5°C while not knowing what the limit is on their emissions “spending” in order to achieve that target. A net-zero target set 15 to 25 years into the future can feel like an abstract, far-off concept with little bearing on day-to-day municipal operations, such as programs and projects with timelines of less than five years. Much like setting a monthly budget supports personal finance objectives, a carbon budget framework provides near-term milestones to keep a municipality on track with their climate objectives.

How does the carbon budget framework work?

A municipal carbon budget sets a cap on how much a city government’s operations or an entire community can emit. Typically, carbon budgets are defined according to a city’s share of the remaining global carbon budget aligned with limiting global warming to 1.5 degrees Celsius.

By adopting a carbon budget framework, a city mobilizes all departments to account for greenhouse gas emissions when designing municipal initiatives, be it construction projects, planting trees, or social programming, as well as policies, like building standards, that influence community emissions. Climate impacts, in the form of estimated emissions expected from an initiative, are calculated and included in budget requests or administrative reports. This includes emissions reductions as one of the criteria evaluated in the municipal decision-making process.

Cities like Oslo, Montreal, and Edmonton have already adopted carbon budgeting frameworks. Each of them reports publicly on their annual carbon budgets, alongside their fiscal budgets. By aligning financial resources with climate targets, cities can prioritize impactful initiatives and allocate funding where it is needed most. Regular budget reviews and progress assessments ensure that spending remains in line with objectives, allowing for timely adjustments if targets are at risk. This ongoing oversight helps municipalities stay accountable, course-correct when necessary, and maintain momentum toward their long-term climate goals.

Resources to get you started

Many free tools and guides are available to support municipalities with carbon budgeting. 

Carbon Budget 101

Both the C40 Carbon Budget Primer and Clean Air Partnership Climate Accountability Toolkit provide comprehensive overviews of carbon budgeting and accounting processes for municipalities. 

Calculating your carbon budget

For Canadian municipalities, you can obtain your community’s emissions profile from MEED for free. This will give you a starting point for calculating your carbon budget. 

GHG accounting

The C40 Handbook on GHG Quantification provides an overview on how to quantify GHG emissions. Some free emission calculators are also available. In Canada, the free GHG Calculator for municipal projects was designed by SSG be used across different departments to understand the emissions impact of different municipal projects. Additionally, the European Rental Association put together an equipment CO₂ calculator for calculating emissions for construction projects.

Climate Lens as a First Step

Getting buy-in for a full carbon budget framework may require starting small. Some municipalities begin by integrating qualitative carbon impact assessments into budget discussions. For example, in 2022, the City of Fredericton adopted a climate lens, requiring all capital budget proposals and decision reports to declare qualitative climate mitigation and adaptation impacts. By 2024, the City has advanced to quantifying project emissions for eligible projects.

Every Municipality Can Take Action Today

No matter the size of a municipality, integrating climate considerations into decision-making can start today. Free tools make it easier than ever to assess emissions and take action. Developing a carbon budget is a bold, transparent step municipalities can take to show accountability to their climate targets. It’s the kind of leadership we need now more than ever.