Germany - Climate
At a glance
Germany is the second-largest donor country to climate projects
Germany is the second-largest donor country to climate projects in absolute terms. US$8.2 billion of its official development assistance (ODA) was spent on targeted action against climate change as a principal or significant objective in 2020 (see box). This corresponds to 35% of Germany’s bilateral allocable ODA, which is well above the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) average of 23% for climate projects and makes Germany the seventh-largest donor in relative terms.
Germany’s funding in this sector has increased over the last five years, rising by 10% since 2016 when it allocated US$7.5 billion to climate.
Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.
Each marker has three possible scores:
- Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
- Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
- Not targeted, meaning the project does not address climate change mitigation or adaptation.
Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.
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 German Federal Ministry of Economic Cooperation and Development (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 to climate change. (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; see box for more information.)
To reach its international climate goal, the 2020 budgets of the BMZ and the Federal Ministry for the Environment (BMU) were increased by €500 million (US$570 million) and €100 million (US$114 million), respectively. The additional €500 million (US$570 million) for the BMZ was mainly used to expand renewable energies in countries in Africa, invest in rain forest protection measures, and support adaptation measures to strengthen agriculture in drought regions.
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 low-income countries (LICs) in their climate protection efforts. The funding came from the BMZ’s budget and has mostly been channeled via the World Bank and other development banks to expand renewable energies in LICs, primarily on the African continent. At the January 25, 2021, Climate Adaptation Summit (CAS), Merkel pledged another €220 million (US$251 million) to support the lowest income countries’ efforts to adapt to the effects of the climate crisis.
During the 26th UN Climate Change Conference of the Parties (COP26) in November 2022, Germany did not take on a leading role since the government at that time had just been voted out of office and was only transitionally in office until the new government was formed in December 2021. Still, Germany did announce contributions of €100 million (US$114 million) to the Least Developed Countries Fund and €50 million (US$57 million) to the Adaptation Fund. However, these pledges were part of commitments already made by Merkel during the Climate Adaption Summit in January 2021. Further, Germany announced to contribute €10 million (US$11 million) to the Santiago Network on Loss and Damage. In June and July 2022, Germany hosted the Bonn Climate Change Conference and the Petersberg Climate Conference respectively where government representatives met to prepare for COP27, due to take place in Sharm El Sheikh in autumn 2022.
In May 2020, the BMZ released its new strategy ‘BMZ 2030’, defining climate as one of five future core topics of German development cooperation, underlining Germany’s increasing commitment to climate on the international stage. The strategy lays out three fields of action within the core topic ‘Responsibility for our planet - climate and energy’:
1) Climate protection and adaptation to climate change;
2) Renewable energy and energy efficiency; and
3) Sustainable urban development (mobility, circular economy, and waste management).
Germany’s climate-related ODA predominantly focuses on climate change mitigation
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 2019, 23% of Germany’s funding in the climate sector was channeled toward projects tagged with both markers. (For more information on the markers, see box.)
German civil society organizations (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 low-income countries (LICs).
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% (DAC 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 (DAC average: 77%).
The largest share of Germany’s climate financing was spent on energy-related projects (21%) in 2020, followed by projects focusing on environmental protection (15%), agriculture (14%; including forestry, fishing, rural development), and water and sanitation (13%).
Germany is committed to multilateral climate finance
While Germany puts a strong focus on bilateral climate finance, it also channels parts of its climate financing through multilaterals, though not all these funds are counted as ODA. This includes contributions to the following multilaterals:
- Green Climate Fund (GCF): The BMZ contributed €750 million (US$855 million) for the GEF’s 2015-2018 strategic period. For the 2020-2023 period, Germany has doubled its contribution to €1.5 billion (US$1.7 billion) in funding;
- Global Environment Facility (GEF): Between 2018 and 2022, the BMZ will have contributed €420 million (US$479 million) to the GEF, making it the second-largest donor in absolute terms, after Japan;
- Least Developed Countries Fund (LDCF): Until 2020, the BMZ had contributed a total of €315 million (US$359 million), making it the largest donor. At the Climate Adaptation Summit in January of 2021, Germany pledged an additional €100 million (US$114 million) to the LDCF, bringing total contributions to €415 million (US$473 million);
- Climate Investment Funds (CIFs): As of November 2021, Germany has contributed more than €650 million (US$741 million) to the CIFs since its establishment in 2008. In May 2021, Germany pledged €80 million (US$91 million) to CIF for the Global Energy Storage Program;
- Forest Carbon Partnership Facility (FCPF): Between 2009 and 2021, Germany contributed US$428 million. The FCPF is the largest multilateral initiative to compensate for emission reduction through preventive deforestation (REDD +) in low-income countries;
- Special Climate Change Fund: As of March 2022, Germany has contributed US$120 million in total, making it the largest donor to the Fund; and
- Adaptation Fund: Germany is the top contributor to the Adaptation Fund, with US$456 million committed to date. At the Climate Adaptation Summit in January of 2021, Germany pledged another €50 million (US$57 million) to the Fund.
Germany also supports the InsuResilience Global Partnership committed to providing climate risk insurance to protect 500 million of the world's poorest people annually against climate risks, such as floods or crop failures, by 2025. To date, the BMZ has provided around €800 million (US$912 million) to support various risk financing and insurance solutions, making it the largest donor to the Partnership. The Global Partnership was launched by Germany, together with other partners at the 2017 UN Climate Conference in Bonn, Germany.
BMZ leads on Germany’s climate strategy and contributes 80%-90% of Germany’s climate funding
The BMZ drives the German development strategies, including on climate, and between 80% and 90% of Germany’s global climate funding comes from the BMZ's budget. The BMZ leads on funding for international climate measures that count as ODA, but with the new government in office since December 2021, the responsibility for international climate policy also lies with the Federal Foreign Office. The BMU also supports comprehensive climate protection measures through the International Climate Initiative (IKI). The Federal Ministry for Economic Affairs and Climate Action, the Federal Ministry of Education and Research, and the Ministry of Foreign Affairs also contribute to German climate finance, however with small shares.
On the operational level, GIZ and the German development bank (KfW) support partner countries to access international climate financing through the Climate Finance Readiness Programme (CF Ready). The program supports countries in building up organizational, technical, and personnel capacities to be able to apply for and use strategic funds, e.g., from the GCF.
Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.