Issue Deep Dive: Germany/Climate
Last updated: January 2, 2023
Germany ranks second among DAC donor countries in terms of its spending on projects with some degree of climate focus.
Germany ranks seventh among DAC donors when considering its spending on climate change-related projects, relative to its total ODA spending.
While Germany’s focus on climate change mitigation and adaptation increased in recent years, total funding in this sector only increased moderately between 2016 and 2020, with year-to-year decreases in 2017 and 2020. Even though Germany’s total bilateral ODA increased between 2016 and 2020, funding for climate change-related projects did not increase in the same proportion. As a share of Germany’s bilateral ODA, spending on climate change-related projects decreased from 41% in 2026 to 35% in 2020.
In 2015, former German Chancellor Angela Merkel promised that Germany would increase its funding for global climate protection from €2.0 billion (US$2.3 billion) in 2014 to €4.0 billion (US$4.6 billion) by 2020. According to the BMZ, Germany reached this target one year early, in 2019, with a total expenditure of €4.3 billion (US$4.9 billion) for climate protection and adaptation measures. In 2021, according to the BMZ, Germany contributed €5.3 billion (US$6.1 billion) to climate protection and adaptation. (The numbers based on the Rio markers differ from the numbers published by the German government, since countries often only refer to projects principally targeting climate, while the number based on the Rio markers incorporate projects principally and significantly targeting climate.)
In 2020, Germany channeled 16% of its bilateral allocable ODA to projects whose principal focus was climate, well above the DAC average of 9%. Funding for projects with climate as a significant goal stood at 19% (:abbrDAC average: 14%). However, 65% of Germany’s bilateral allocable ODA was not screened against the Rio markers in 2020 or did not target climate change (:abbrDAC average: 77%).
Germany focusses on climate change mitigation by supporting partner countries in their energy transition. In 2020, the largest share of Germany’s climate financing was spent on energy-related projects.
The majority of Germany’s climate-related ODA flows into projects targeting climate change mitigation (67%). Measures focusing on adaptation to climate change account for 55% of Germany’s climate financing. As is apparent from the relative size of these percentages, there is also a significant overlap between the two markers; a project can target both adaptation and mitigation. In 2020, 23% of Germany’s funding in the climate sector was channeled toward projects tagged with both markers.
German CSOs have criticized Germany’s strong focus on mitigation, emphasizing that increased funding for adaptation projects is pivotal to safeguarding the livelihoods of the population affected by climate change in LICs.
While Germany favors bilateral climate finance, it also channels parts of its climate financing through multilaterals, though not all these funds are counted as ODA. This includes, among others, contributions to the GCF (€1.5 billion (US$1.7 billion) in funding for the 2020-2023 period) and to the GEF (€700 million (US$798 million) in funding for the 2022-2026 period).
Climate is a core topic of German development cooperation: According to the BMZ’s ‘Agenda 2030 Thematic Model’, introduced by the ‘BMZ 2030 Strategy’, climate is one of six core themes of German development cooperation. The strategy highlights three fields of action within the core theme ‘Climate and energy, just transition’:
- Climate protection and adaptation to climate change;
- Renewable energy and energy efficiency; and
- Sustainable urban development (mobility, circular economy, and waste management).
Supporting partner countries in their sustainable energy transition has been stated as one of BMZ’s priorities. This includes the expansion of climate-friendly energy sources, creation of climate-friendly jobs, socio-ecological transformation of the economy, and the strengthening of adaption measures, including in cities.
Germany continuously expands investments to climate and environment protection: At the virtual Climate Ambition Summit, co-convened by the UN, on December 12, 2020, former Chancellor Merkel pledged an additional €500 million (US$570 million) for 2020 and 2021 to support LICs in their climate protection efforts. At the January 25, 2021, CAS, Merkel committed another €220 million (US$251 million) to support the low-income countries’ efforts to adapt to the effects of the climate crisis. In September 2022, Germany announced it would double its funding for biodiversity conservation to €1.5 billion (US$1.7 billion) annually until 2025, relative to its average investment between 2017 and 2021. The BMZ’s budget for international environment and climate protection in 2023 increased by €47 million (US$54 million) from the previous year to €833 million (US$949 million).
Germany expands climate advocacy under G7 presidency: In June and July 2022, Germany hosted the Bonn Climate Change and the Petersberg Climate Conferences, where government representatives met to prepare for COP27 in November 2022. Under its G7 presidency, Germany proposed and launched the ‘Global Shield Against Climate Risks’ with seed funding of €170 million (US$194 million). The initiative aims to mobilize additional funding for protection against and compensation for Loss and Damage resulting from climate change.
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