Green grants and other financial awards include funds that governments give directly to individuals or organizations for a specific environmental goal. Governments can use grants and other financial awards to pursue environmental goals by subsidizing the cost of a product or service that helps achieve those goals. This encourages consumers or producers to purchase these products or services. For example, governments may use grants to incentivize homeowners to install solar panels.
These tools can also result in unintended impacts. For example, they may be an inefficient use of resources if the reason for the grant is no longer applicable. They can also influence economic growth and technological advancement by selectively encouraging development in certain technologies.
Case studies
United Kingdom: Green Homes Grant Vouchers
The United Kingdom’s (UK) National Audit Office (NAO) examined the performance, procurement, and management of the Green Homes Grant Voucher Scheme. The UK’s Department for Business, Energy, and Industrial Strategy set up the scheme in July 2020 as part of the government’s “green recovery” from the pandemic. The scheme was expected to support up to 82,500 jobs and install energy efficiency improvements and low carbon heat measures in 600,000 homes between September 2020 and March 2021.
NAO evaluated the scheme against its objectives. To conduct its audit, NAO reviewed prior relevant NAO reports and the department’s data and relevant business documents, and interviewed relevant government officials and external stakeholders. NAO found, among other things, that the scheme did not deliver the expected number of home improvements or jobs created and that many homeowners and installers had negative experiences using the scheme.
NAO made several recommendations, mostly focused on the design and implementation of future energy schemes. For example, NAO recommended that the department determine how its home energy efficiency schemes fit with its overall plans of decarbonization; balance the accessibility and efficiency of the scheme with the risk of poor quality workmanship and fraud; and deploy people with technical, delivery, and commercial experience to provide input during the early stages of new schemes.
The Republic of Ireland’s Office of the Comptroller and Auditor General (C&AG) conducted a midterm review of the Department of Agriculture, Food, and the Marine’s Forestry Programme 2014–2020. The government established the grant program in 2015 to increase the amount of forested land in Ireland. It also set annual targets for the total area of land to be converted to forest and the mix of trees to be planted.
The C&AG reviewed the program targets and outputs to date in 2018 and how the department administered the grant scheme. The C&AG also looked at noncompliance with scheme conditions and the economic basis for the scheme.
The C&AG found, among other things, that the department consistently did not use all funding provided for the program, had not met various annual targets, and did not have an adequate cost-benefit analysis for the program. It recommended that the department conduct a revised and updated cost-benefit analysis and review the impact of changes to grant payment rates to ensure the amended program produced cost beneficial value for Ireland.
Criteria
The INTOSAI Working Group on Environmental Auditing (WGEA) aims to increase the expertise in environmental auditing and to enhance environmental governance with high-quality contribution and visibility by both members of the Working Group and non–member SAIs. Currently the INTOSAI WGEA consists of 86 member countries.
