New case studies from the Under2 Coalition’s Next Generation Budgets project reveal how public spending and green investment are powering climate progress in states and regions.
Public budgets have enormous power to shape climate outcomes; they’re the financial foundation of policies that shape how we work, heat our homes, eat and go from A to B for decades to come. States and regional governments are already proving what’s possible when governments align spending with net zero goals.
The Next Generation Budgets project convened ambitious subnational governments from the United States and Europe, to strengthen the synergy between finance and climate policy, and increase the ability of public budgets to speed up climate action.
Beyond budgets, the project launched in 2024 to help governments share innovative ways to unlock climate finance and improve how they define climate financing plans to unlock climate finance.
One year on, these governments are greening their public spending with green budget tagging and creating initiatives to increase green investment – with as Scotland’s new Ecosystem Restoration Code initiative and Maryland’s Green Bank as just two examples.
Through tailored support, peer learning and implementation plans, subnational leaders are changing the way they use their public budgets to drive climate action and strategically thinking about ways to attract private investment.
As the project draws to a close, we've launched a series of case studies from our participating governments. Examples from Basque Country, North Rhine-Westphalia, Maryland and Scotland, showcase how subnational governments are rethinking spending decisions to accelerate emissions cuts, strengthen resilience and unlock strategic climate investment.
Basque Country designs new climate budgeting methodology
Working across the departments of Industry, Energy Transition and Sustainability, the government of Basque Country has designed a climate budgeting methodology aligns its public spending with climate change mitigation and adaptation. In a bold move, the government has allocated 2.5% of its general budget to climate action.
North Rhine-Westphalia bankrolls community-led energy projects
Launched in 2025, the Community Energy Fund mitigates the risks and costs of renewable energy projects during the early stages, by providing grants to fund site surveys, environmental assessment and permit applications for community energy projects. Less than a year into this initiative and 17 applications have already been approved - approximately € 3.8 million in funding.
Maryland’s Green Bank bridges the climate finance gap
The challenge in Maryland is not dissimilar to other states and regions – inadequate climate finance for projects. The solution? Green banks. The state has strengthened its green banks to fund climate-friendly projects. This includes direct loans for energy efficiency, solar installations, and electrification upgrades.
Scotland’s nature positive goal
Around £40bn of annual economic value and approximately 255,000 jobs are provided by industries dependent on Scotland’s natural capital. With nature restoration at the heart of the mission, the Scottish government launched a new Ecosystem Restoration Code to unlock private investment.
Download and read the case studies:
