Key figures of the 2016 German federal budget: progress on the $100 billion pledge?

2016 will be a good year for climate finance according to Finance Minister Schäuble. Even the $100 billion promise will be fulfilled. © German Bundestag / Achim Melde

Financial support for developing countries is one of the key issues that need to be addressed if a global climate agreement is to be adopted in Paris in late 2015. In particular, the industrialized countries will be judged on the progress they have made toward raising at least $100 billion per year for climate finance from public, private and alternative sources by 2020, as promised five years ago.

They have repeatedly rejected demands by developing countries for a credible roadmap for the fulfillment of that promise in the past. In light of this, it is highly interesting to find the following sentence (on page 10 in German) in the German government’s recently published position on key figures for the 2016 federal budget (which also includes a rough financial plan for the years 2016 to 2019):

“There is agreement that the estimated funds for the financial planning period will be sufficient to meet the German government’s climate protection commitments (Copenhagen commitment).”

Translation: together with other funds from private sources (about which very little is known), the funds earmarked in the budget in the coming years are sufficient to cover Germany’s fair share of the $100 billion pledge – in Finance Minister Wolfgang Schäuble’s opinion, at any rate. By emphasizing the existence of an agreement, Schäuble is essentially calling for silence from the peanut gallery – i.e. Environment Minister Barbara Hendricks and Development Minister Gerd Müller.

How much this agreement is worth, and how climate finance from Germany will change in the coming years, can only be stated in general terms. The German government sees climate finance as a part of development finance, and so it is worth taking a closer look at the promised additional resources of €8.3 billion over the next four years, of which the government says a significant share will go toward climate finance:

First, a troubling aspect (in red): of the additional €8.3 billion, just under €3.1 billion are listed in Section 60, the budget of the general financial administration of the federal government; these funds are earmarked for development financing, but whether they will actually be provided and how they will be allocated to the individual budgets relevant to development and climate finance has not been clarified. No official reasons have been provided to date for this strange design. In fact, it remains unclear whether resources available for development and climate finance are truly set to increase after 2017 or whether this is merely creative accounting.

We can gather that there will indeed be more money in 2016 (and 2017) in comparison to the previous plan, both for the International Climate Initiative (ICI) of the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) and climate-related development finance of the Federal Ministry for Economic Cooperation and Development (BMZ). While the table above only lists cash outflows, the commitments made or planned during the course of a year are relevant for the volume of bilateral climate finance; this planned increase in cash resources would require growth in bilateral commitments, however. Not much more can be said at present for lack of detailed planning figures that likely will only be publicized during the budget debate.

Still, 2016 could become a year of small (according to the German government, major!) steps forward. That is not surprising. As mentioned earlier, the industrialized countries must be able to document an increase in climate finance for the coming years – at least in general terms – by the end of 2015 in order to avoid showing up at the climate summit in Paris empty-handed. It would seem that Barbara Hendricks and Gerd Müller have successfully convinced their colleague Wolfgang Schäuble of that necessity. And that’s a start.

Jan Kowalzig / Oxfam