German climate finance

The score so far: German climate finance prior to COP21

In the days before the UN Climate Change Conference (COP21), it’s worth taking a quick look at the state of German climate finance. The German government is likely preparing to make further commitments in Paris; climate finance is also going into the next round with the forthcoming adoption of the 2016 German federal budget.

One must hand it to the German government for putting other donor countries under considerable pressure to act with its announcement in May that it would be doubling the volume of German climate finance by 2020 – France, the United Kingdom and a number of other countries have since responded with pledges for climate finance by 2020. Germany is thus trying to stop doubts about the fulfillment of the $100 billion pledge by the industrialized countries from becoming a stumbling block for the Paris agreement.

The government is now faced with the task of gradually implementing the announced doubling. According to official figures, German climate finance has been rising steadily for years – a trend that will continue in 2016, mainly through an increase in allocations to the International Climate Initiative (ICI) of the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) and technical and financial cooperation in climate-related aspects of special initiatives of the Federal Ministry for Economic Cooperation and Development (BMZ). In addition, Germany will be making a first major contribution toward the Green Climate Fund and toward the G7 Climate Risk Insurance Initiative in 2016.

Table 1: German climate finance



2015 (planned)

2016 (planned)

Bilateral public funds 1

€ 1,7 billion

€ 1,9 billion

€ 2,1 billion

approx. € 2,21 billion

Contributions to multilateral climate

€ 253 billion

€ 238 billion

€ 146 million

€ 269 million

Further creditable multilateral
contributions 2


€ 224 million



Mobilized public funds 3

€ 1,5 billion

€ 2,8 billion



Mobilized private funds 4





The table contains the figures for 2013 and 2014 provided to the European Commission by the German
government within the framework of its reporting obligations. The figures for 2015 and 2016 have been derived or
extrapolated from information provided to the German parliament by the federal government and from documents
on the 2016 federal budget.

These are resources from the federal budget for bilateral climate-related development cooperation projects, i.e.
mainly from the budget of the BMZ and to a lesser extent that of the BMUB.

This item consists of contributions to multilateral development banks and other institutions that finance climate-
related programs. The federal government credits a share of its contribution toward climate finance corresponding
to the proportion of climate programs in the overall portfolios of such institutions.

This item includes funds mobilized on the capital market for low-interest KfW loans or DEG loans at market

The German government does not provide information on private investment that has been mobilized through
the use of public funds.

Source: author’s compilation based on German federal government data

To illustrate the increase, however, the German government continues to use an unusual accounting scheme for the funds pledged via the Energy and Climate Fund (EKF) from 2011 to 2013. Instead of correctly applying OECD standards and allocating funds to the years in which the pledges were made, the government is crediting the funds on the basis of disbursements during the implementation of the projects (and is thus crediting funds that were pledged years ago to 2014, for example). This time-shifting trick creates the impression that financial support is climbing steadily when in fact the total financial volume available for bilateral pledges has stagnated over the past five years (although it began rising again in 2014).

Contributions to multilateral climate funds account for only a very small part of German climate finance. They are set to increase significantly from 2015 to 2016, as the first major contribution to the Green Climate Fund (GCF) and payments to the Least Developed Countries Fund (LDCF), the Global Environment Facility (GEF) and the G7 Climate Risk Insurance Initiative for developing countries will be due in 2016. However, Germany is not planning on making payments to the Adaptation Fund in 2015 and 2016 after contributing a total of €80 million in 2013 and 2014.

Growth until 2020?

Apart from the Chancellor’s commitment to double German climate finance by 2020, there is still little clarity about the specific path this growth will take. The German government is using a target of €10 billion as an orientation for a fair German share of the $100 billion pledge, which also roughly corresponds to Germany’s relative commitment to other multilateral activities (development cooperation, etc.).

For this purpose, the nearly €2 billion federal budget appropriation in 2014 is expected to increase to €4 billion in 2020. Additional funds are to be mobilized to make up the difference to the target of €10 billion, including market funds as a part of public, partly subsidized loans within the framework of climate-related development cooperation, as well as mobilized private investment. How the growth will actually be realized and which instruments, channels and sources of finance will be used has not yet been outlined – that will be a task for the coming months.

Fig. 1: German climate finance until 2020

Illustration of planned growth based on Chancellor Merkel’s pledge to double German climate finance resources, in particular those allocated in the federal budget, by 2020 (as compared to 2014) Source: author

What can we expect from the German government in Paris?

The German government is in a fairly good position for the Paris summit thanks to its pledge to double its climate finance resources. We can expect Germany to reaffirm this commitment at the conference. Apart from that, there have been signals that the German government could make further individual pledges, for example to the Adaptation Fund, the Least Developed Countries Fund and the G7 Climate Risk Insurance Initiative.

The actions that the German government will take in Paris to ensure an overall positive influence on climate finance negotiations will be even more important – for example by convincing donor countries to agree on a target that will significantly increase financial support for adaptation to climate change in poor countries until 2020. African countries are calling for such a target – specifically, to double the relative share of adaptation within climate finance from the current 16 percent to 32 percent (i.e. $32 billion by 2020).

Post-2020 climate finance will also be on the agenda in Paris. The draft agreement contains a demand from the G77 group of developing countries to regularly set targets for financial support. The industrialized countries have rejected the idea so far, yet have not offered anything of their own that would improve the binding nature and reliability of future support.

Jan Kowalzig, Oxfam

Further information: „Aufbruch in den Aufwuchs bis 2020? Zwischenstand zur Klimafinanzierung aus Deutschland“, compact briefing, Oxfam Deutschland (PDF, in German).