Germany exceeds climate finance target

Market: Emissions
29/09/23

Germany exceeded its international climate finance target by making more than €6bn available last year, the government announced today, calling on other industrialised countries to "pay their fair share".

Germany's federal government last year made a total of €6.39bn available from budget funds for climate action and adaptation in developing countries.

This is about €1bn more than was made available in 2021 and exceeds the annual target of €6bn in climate financing from public funds promised by chancellor Olaf Scholz for 2025, the federal ministries of economic co-operation and development, and economic affairs and climate action, said today. The government informed the European Commission on its climate finance on 28 September, in line with requirements for all member states.

Germany therefore is contributing its "fair share" to the pledge of industrialised countries to mobilise $100bn/yr to combat climate change in developing and emerging countries, the ministries said.

Other industrialised countries now also must pay their "fair share of our shared promise", development minister Svenja Schulze said. This is not just a "central question of trust between industrialised and developing countries", Schulze said, but it would "also help us to hold other countries such as China and the gulf states responsible for climate financing".

The government intends to focus more on leveraging private capital in the future, "and thus increase effectiveness", economy and climate minister Robert Habeck said.

About 44pc of the funds provided last year went to adaptation, such as food security and climate-adapted agricultural methods. As such, the federal government is "well on its way" to making its contribution to the internationally agreed goal of doubling adaptation financing to $40bn by 2025 compared with 2019, the economy and climate ministry said.

The $100bn commitment includes not only budgetary resources, but also contributions mobilised with public funds. If these market funds, along with privately mobilised funds, are taken into account, then German climate financing accounted for about €8.8bn last year. Privately mobilised funds climbed to a record level of nearly €500mn, compared with €170mn in 2021.

The larger share of Germany's climate financing went to projects agreed with partner countries, including the so-called Just Energy Transition Partnerships. Another instrument is the International Climate Initiative (IKI), which supports projects that promote climate and biodiversity protection in developing and emerging countries.

German climate financing also supported multilateral funds such as the Green Climate Fund, the Global Shield against Climate Risks and the Global Environment Facility.

By Chloe Jardine

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