International climate finance / Gender / German climate finance

Further need for improvement in Germany’s reporting on future climate finance

The first submissions on future projections of climate finance as required under Article 9.5 of the Paris Agreement were submitted in 2020. Germany reported as a member of the European Union, which provided its submission on November 24, 2020. Following up on a CARE report, this website also published an analysis of the submission. On October 18, 2022, the EU – including Germany – issued its second 9.5 submission.

Unclear outlook for future climate finance

In the European Union’s 2022 submission, which runs to a total of 238 pages, the German chapter takes up 15 pages. Regarding the projected level of future climate finance, Germany first emphasizes that its self-imposed target of doubling the budget to 4 billion euros per year by 2020 compared to 2014 had already been reached in 2019, and as much as 5.09 billion euros had been raised in 2020. However, the submission is not accompanied by a more detailed breakdown or source, making the statement difficult for outsiders to verify. Analysis from the German NGO side on the website and elsewhere raises critical questions at the very least.  The submission then states that in 2021, former Chancellor Angela Merkel pledged an increase to 6 billion euros annually by 2025 – noting that this includes grant equivalents from KfW loans – and that the current Chancellor, Olaf Scholz, confirmed this pledge at the 2022 G7 summit. This means that there is at least one officially documented target, although nothing is stated about the development between 2020 (latest figures) and 2025. A general reference is also made to the budgetary reservation of the parliament and that it is therefore difficult to make more specific statements for the future. Moreover, given the urgency of the climate crisis, an increase from 5 to 6 billion within 5 years still does not seem like an urgently needed leap forward. German civil society supports the long-standing demand for 8 billion euros as a target for 2025 – i.e. a further doubling – in the latest COP27 position paper, and has also pointed out that the 6 billion target has not yet been taken into account by the current budget decisions.

Regarding future priorities (Section b), reference is made primarily to programs for which commitments have been made in 2021 to be implemented in subsequent years (see Table 1). These include financial resources for UNFCCC funds and the World Bank, funds for InsuResilience and the Global Shield Against Climate Risks initiated at COP27, as well as funds for other initiatives, especially in the forest sector. Regarding the Green Climate Fund (GCF), the submission does not give any new figures, but it does anticipate an ambitious German contribution depending on the overall negotiations on the 2023-2026 replenishment. In the meantime – this is not mentioned in the submission – Germany has offered to host the GCF donor conference and has been taken up on this proposal. The conference is scheduled to take place in Bonn on October 5, 2023.

Table 1: German commitments to multilateral funds and initiatives

German commitments to funds and initiativesCommitments in 2021
Least Developed Countries Fund (LDCF)EUR 100 million
Adaptation FundEUR 50 million
Global Environment Facility (GEF)EUR 700 million
Climate Investment Funds (CIF, World Bank)EUR 260 million
InsuResilience Global PartnershipEUR 300 million (2021-2022)
Initiatives in the forest sectorEUR 125 million
African Development Bank (AfDB) Green Baseload FacilityEUR 100 million

Regarding the additionality of future funds, the submission refers to the German government’s definition of additional funds as those that would be newly committed or paid out in a reporting year and had not already been reported as climate finance in previous years. However, this means that even under the current German government, a rather weak definition of additionality persists – with no additionality against the long-promised 0.7% target – a practice that falls well short of the Scandinavian countries. It is nevertheless better than the practice of some other donor countries such as the United States, Japan or the Netherlands, as another CARE report from 2022 has shown.

More information on the mode of delivery of climate finance

Following up on the COP26 decision to at least double adaptation funding by 2025 (compared to 2019 levels), Germany commits in the Article 9.5 submission to contribute to this goal and “increase its focus” on adaptation measures in the context of balancing mitigation and adaptation (Section a). Elsewhere (Section c), it states that Germany is determined to increase financing for adaptation. However, the path has not been more clearly quantified.

The submission also contains some information regarding the changes in the division of responsibilities between the individual federal ministries resulting from the change of government and a subsequent reorganization of portfolios. The new division of responsibilities will influence climate finance in the coming years and should be seen in a positive light. At least in broad terms, it shows that the Federal Ministry for Economic Cooperation and Development (BMZ) will remain the main player in quantitative terms, but that the Federal Foreign Office and the Federal Ministry for Economic Affairs and Climate Protection (BMWK) will now also play a role in the implementation of climate finance – essentially through the joint implementation of the International Climate Initiative (IKI). The newer IKI instruments on medium and small projects are also mentioned as a tool to “strengthen smaller stakeholders’ capacities in developing and emerging countries and to encourage the effective involvement of all social groups”.

CARE also welcomes the fact that information on policies and priorities in Section c) explicitly addresses gender aspects against the background of the approach to feminist foreign and development policy in the coalition agreement of the present Social Democrat/Green/Liberal government:

Hereby, the planned revision of the gender action plan will lay the groundwork for Germany’s mission to strengthen the rights, resources, and representation of women in all their diversity and LGBTIQ+ throughout its foreign policy and development cooperation. A cornerstone of the renewed commitment will be a significant increase in the gender-responsive development portfolio, extending the gender-responsive design of climate policy and decisions and the implementation of gender-responsive adaptation and mitigation strategies is a priority.” (p. 104).

By now, the Federal Foreign Office and the BMZ have developed specific strategies on feminist foreign and development policy – very important steps in the right direction.

Thus, the German government has made progress on transparency overall, but still lacks a clear perspective and ambitious goal for increasing future climate finance.

Sven Harmeling, CARE