German climate finance

Key figures of the 2013 German federal budget: has the energy turnaround suddenly become cheaper?

Federal government budgets less money for climate protection

According to the plans of the German federal government, the transformation of Germany’s national energy supply will now apparently require a billion euros less in 2013 than previously planned. At any rate, that appears to be the case according to key figures for the 2013 federal budget published by the German government yesterday.

According to the published figures, Finance Minister Schäuble now believes that emissions certificate prices will remain low next year, and that as a result the revenue for the Climate and Energy Special Fund, which is financed by the auction proceeds of CO2 certificates, will remain around €1 billion below expectations – instead of €3.3 billion, only about €2.2 billion, as can be seen in this table.

Is that a bad thing? After all, the electricity price subsidy for energy-intensive industries – which is completely nonsensical from the climate policy perspective – has been dropped from the budget for 2013 as a result (it will be back in 2014 and thereafter, however). €500 million were originally earmarked for this subsidy for 2013, which already offsets half of the missing billion. That sounds good, but to save the remaining half billion, corners will be cut in a wide range of Special Fund programs, such as renewable energy – and not just in 2013, but also in subsequent years.

International climate finance will also suffer – hence this note. For the period of 2013 to 2015, just under €1.5 billion from the Special Fund were budgeted for the international climate finance program. Now that figure is only €1.1 billion, or €400 million less.

All of this would be less of a problem if the federal government were to offset the shortfall by allocating greater resources to the environment or development in the regular budget. It is not doing so, however. The funds related to international climate financing are not set to rise (environment) or will even decrease (development), setting a trend for the coming years.

We have already described the action that needs to be taken – rather than merely managing the decline in revenue for the Special Fund, the revenue base must be broadened and strengthened, especially through scarcity (and thus price stability) of the emissions certificates, for example through the already overdue increase of the EU climate target to 30% reductions by 2020.

Jan Kowalzig, Oxfam