Fast Start Finance (FSF) / German climate finance / International climate finance

Germany’s contribution to the Copenhagen fast-start pledge is largely old wine in new wineskins

“These funds will be new and additional, and not linked to other development measures such as poverty reduction.”

Those were the words of Federal Development Minister Dirk Niebel on 11 December 2009, referring to the pledge of more than €1.26 billion made shortly before by Chancellor Angela Merkel as the German contribution to the fast-start commitment by the industrialized countries – USD 30 billion in new and additional funds in 2010-2012 to support adaptation and mitigation measures in developing countries.

Germany certainly will fulfill its pledge nominally, as the government has repeatedly emphasized, for example here, and one cannot complain about a lack of transparency in the use of the funds: starting on page 33, this report contains nearly twenty pages of project lists with information about what Germany is actually doing with the money.

But is the money new? Is it additional? According to the pledge in the Copenhagen Accord, it should be. The problem: a common definition of “new” and “additional” was not established for good reason. Yet Germany has one: funds are counted as new and additional in the sense of the pledge if they either represent an increase in climate-related expenditures in development cooperation over the Copenhagen year 2009, or they are funds of the International Climate Initiative (ICI), based on the argument that the ICI is funded by the auction proceeds of emissions trading, making it an innovative way of generating funding.

A more appropriate definition of new and additional would be financial resources that had not been earmarked or committed prior to Copenhagen, i.e. “fresh” money. By that measure, just under €152 million (12% of the pledge) amounts to fresh money for the period from 2010 to 2012, as is documented here. The rest had already been allocated and/or internationally promised elsewhere, in some cases years earlier. Most glaring example is the €500 million that the German government had pledged in 2008 for forest and biodiversity conservation by 2012, and which are now largely also counted toward the 2009 fast-start pledge (as well as toward the 0.7% development cooperation commitment).