German climate finance / International climate finance

Climate finance in the wake of G7: will Merkel heed her own call?

Climate finance in the wake of G7: little progress was made with regard to financial support. © Max Beckmann / Oxfam

“Elmau delivered,” was Greenpeace’s comment on the results of the G7 conference, specifically the commitment by the G7 leaders in the summit’s final declaration to decarbonize the global economy in the course of the century and transform our energy systems. While the current climate protection goals of the G7 countries fall far short of what would be needed to keep global warming below the crucial 2°C threshold, the G7 summit could be an important signal for phasing out fossil fuels – only time will tell.

With regard to the other major loose end in climate policy, the G7 countries did not make much progress. At least the G7 agreed on an initiative to mobilize more private investment in renewable energy in developing countries while strengthening existing instruments – without revealing any specifics about how this would be realized, however. During negotiations on the content of the Leaders’ Declaration for the summit, the German government had tried to move the remaining countries toward statements in this regard – for example on how they could proceed in the coming years toward fulfilling their pledge to increase financial support for poor countries in the fight against climate change to $100 billion per year by 2020. A specially commissioned study investigated the various actors, resources and instruments of climate finance – but without making any statements about possible developments in the future (the study is worth reading even so).

Is the $100 billion roadmap coming?

In the face of resistance from Japan and the United States in particular, Angela Merkel and her colleagues merely repeated the $100 billion pledge – and added that they are well on their way to reaching that goal, which is an easy claim to make when you haven’t yet settled on an accounting method. In any case, only three weeks earlier, the German chancellor had announced that there was still a gap of around $70 billion a year to close – “well on their way” indeed.

The G7 summit thus did not make a great deal of progress on climate finance. The fact that Chancellor Merkel called on the industrialized countries to submit a roadmap for their $100 billion pledge in time for the UN Climate Change Conference in Paris – both at the press conference following the G7 summit and the Petersberg Climate Dialogue several weeks earlier – is more interesting in this respect. Apparently, the political significance of fulfilling this promise for the successful conclusion of negotiations for a new agreement to combat climate change is gradually dawning on the industrialized countries.

Now it remains to be seen whether Merkel will take her own call seriously. Germany’s G7 presidency will continue until next year, when it passes the baton to Japan. The chancellor could use the remaining time to work out a credible $100 billion roadmap with the other G7 countries, thus showing the developing countries how the pledge will be fulfilled prior to the upcoming Paris UN Climate Change Conference.

Such a roadmap would greatly increase mutual trust between rich and poor countries, making it an essential precondition for success in Paris. For it to be effective, the roadmap must include scenarios for the relevant actors, instruments and sources for the provision and mobilization of climate finance, especially with regard to how public funds of the donor countries earmarked for this purpose are set to increase by 2020. For Germany, the chancellor has already announced the doubling of the budget from just under two to four billion euros in 2020, thus garnering worldwide acclaim. What will Merkel do now to get the remaining industrialized countries on board?

Jan Kowalzig, Oxfam