Germany to struggle reaching international climate finance target

Germany to struggle reaching international climate finance target – govt officials

It will be very difficult for Germany to reach its target of providing developing countries with at least six billion euros in climate finance from its federal budget by 2025, said government officials in Berlin. The recent budget crisis meant attaining the goal would become “very challenging” and that the government would need to put more effort into leveraging private funds. In 2023, the country provided 5.7 billion euros from its state budget to support climate change mitigation and adaptation measures around the world.

In view of Germany’s tight federal budget, it will be difficult for the government to reach its target of providing 6 billion euros annually in climate finance from its state budget to developing countries by 2025, said government officials.

“With the current budget planning, it is foreseeable that it will be difficult to raise the funds to the 6-billion mark in 2024 and 2025,” said Jochen Flasbarth, state secretary in the development ministry, during a press call. “I'm not saying it's unattainable, but it's darn hard.”

Economy ministry state secretary Anja Hajduk added that reaching the target would be “very challenging.”

Germany has set itself the target of providing 6 billion euros in climate finance from its state budget annually by 2025, and had already overshot this goal in 2022 (€6.4bn). Foreign minister Annalena Baerbock said earlier this year that the government aimed to stick to the target, despite budget woes. A 2023 ruling by the constitutional court on Germany’s debt limit has left the government’s budget plans short billions of euros, forcing cuts and a re-shuffling of existing funding for 2024 and the following years.

“We must continue our efforts to leverage additional funds” – state secretary

The government today said it provided 5.7 billion euros from its state budget in 2023 to help developing countries mitigate climate change and adapt to its effects. Forty-three percent of the public climate finance in 2023 were earmarked for adaptation measures, the rest for climate change mitigation.

In addition, the government said it mobilised more than 4 billion euros in loans – for example through the government-owned KfW development bank – and private funds, bringing Germany’s total contribution to 9.9 billion euros.

“Germany is a good and central partner for international climate finance and we have made a fair contribution of 10 billion euros in 2023,” said Flasbarth. “If we want to remain at the level of our fair share, we must continue our efforts to leverage additional funds,” he added, referring to funds mobilised beyond the federal budget. This was necessary not only in Germany, because the budgets of all traditional donor countries were currently under pressure, said the state secretary.

Jan Kowalzig, senior policy advisor at NGO Oxfam said it was bad enough that public climate finance decreased in 2023, compared to the previous year, but worse that planned cuts in the development budget meant “that Germany's internationally acclaimed pledge of 6 billion euros is unlikely to be met.” If the government were to travel to the upcoming UN climate change conference COP29 with this news, it would "not only damage Germany's reputation, but also the basis for trust between the rich and poorer countries in the joint fight against the climate crisis,” said Kowalzig.

Through climate finance, Germany helps countries mitigate and adapt to climate change, for example providing support in expanding renewable energy infrastructure, hydrogen production and a sustainable, climate-friendly infrastructure. The government renewed its call for more countries to join the group of donor countries, especially emerging economies with the financial means and which are responsible for an increasingly large share of global greenhouse gas emissions, such as China.

Climate finance is set to be front and centre at the upcoming COP29 in Baku, Azerbaijan in November. In 2009 developed countries agreed to “mobilise” 100 billion U.S. dollars annually to developing countries from 2020 to 2025 for climate change mitigation and adaptation – a target which they said they finally met by 2022, although that remains contested. NGOs like Oxfam continue to criticise government numbers for overstating their actual contributions.

At COP29, governments must negotiate the follow-up to the 100-billion-target, the so-called New Collective Quantified Goal (NCQG). Progress on agreeing this new goal has been slow and talks in Baku will be extremely difficult as countries are likely to clash over who pays in the future and how much.

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