Germany - Climate
At a glance
Germany is one of the world’s top donor countries to climate
Germany is the second-largest donor country to climate. US$8.0 billion of its official development assistance (ODA) was spent on targeted action against climate change as a principal or significant objective in 2018. This corresponds to 42% of Germany’s bilateral allocable ODA, which is significantly above the Organisation for Economic Co-Operation and Development (OECD) Development Assistance Committee (DAC) average of 22% for climate, making Germany the third-largest donor in relative terms.
Germany’s funding in this sector has increased over the last years, rising by 15% between 2014 (US$7.0 billion) and 2018. Germany’s funding in climate was lowest in 2015 (US$5.8 billion) but significantly increased in 2016 (US$7.5 billion) following the Paris Climate Agreement.
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.
During the United Nations (UN) Climate Action Summit in September 2019, Chancellor Angela Merkel emphasized that Germany will increase its funding for global climate protection from €2.0 billion (US$2.4 billion) in 2014 to €4.0 billion (US$4.7 billion) in 2020, thereby living up to her promise made in 2015. (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.)
In order to reach its international climate goal, the 2020 budgets of the Federal Ministry for Economic Cooperation and Development (BMZ) and the Federal Ministry for the Environment (BMU) were increased by €500 million (US$590 million) and €100 million (US$118 million), respectively. The additional €500 million (US$590 million) for the BMZ will mainly be used to expand renewable energies in Africa, invest in rain forest protection measures, and support adaptation measures to strengthen agriculture in drought regions.
In May 2020, BMZ released its new strategy ‘BMZ 2030’ defining climate as one of five future core topics of German development cooperation. This underlines 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’:
- Climate protection and adaptation to climate change;
- Renewable energy and energy efficiency; and
- Sustainable urban development (mobility, circular economy, and waste management).
Germany’s climate-related ODA predominantly focuses on climate change mitigation
Germany’s climate-related ODA is predominantly flowing into projects targeting climate change mitigation (73%). Measures focusing on adaption to climate change account for 49% 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. This is because a project can target both adaptation and mitigation. In 2018, 22% 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 in adaption projects is pivotal to safeguard the livelihoods of the population affected by climate change in low-income countries.
In 2018, Germany channeled 21% of its bilateral allocable ODA to projects whose principal focus was climate (DAC average: 7%). Funding for projects with climate as a significant goal stood at 21% (DAC average: 15%). However, the majority (58%) of Germany’s bilateral allocable ODA was not screened against the Rio markers in 2018 or did not target climate change (DAC average: 78%).
The largest share of Germany’s climate financing was spent on energy-related projects (40%) in 2018, followed by projects focusing on water and sanitation (17%), and environmental protection (15%).
Germany’s strong focus on energy-related projects is also mirrored in German Development Minister Gerd Müller’s latest call on the EU to expand its planned Green Deal — aiming to transform the EU to a low-carbon economy — to the African Continent.
Germany shows strong commitment to multilateral climate finance
Germany 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$885 million) between 2014 and 2018. Germany has already announced €1.5 billion (US$1.8 billion) in funding for the upcoming replenishment period (2020-2023), thereby doubling Germany’s contribution to the GCF.
- Global Environment Facility (GEF): Between 2018 and 2022, the BMZ will have contributed €420 million (US$496 million) to the GEF, making it the second-largest donor in absolute terms, after Japan.
- Least Developed Countries Fund (LDCF): The BMZ is the largest donor at the LDCF, with a total contribution of €315 million (US$372 million) so far.
- Climate Investment Funds (CIFs): The BMZ has contributed €550 million (US$649 million) to the CIFs since 2008.
- Forest Carbon Partnership Facility (FCPF): Germany has contributed €360 million (US$425 million) to the FCPF so far, channeled through the BMZ (approx. €350 million) and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU, approx. €10 million). The FCPF is the largest multilateral initiative to compensate for emission reduction through preventive deforestation (REDD +) in developing countries.
The BMZ leads Germany’s climate-related assistance, contributing 80% to 90% of Germany’s climate funding
The BMZ drives the German development strategies, including on climate. According to BMZ, between 80% and 90% of Germany’s global climate funding comes from BMZ's budget. Within the BMZ, the Directorate 42 ‘Climate policy and climate financing; Commissioner for climate policy and climate financing’ defines Germany’s priorities around climate. It is part of the Directorate General 4 ‘Global Issues’, which is overseen by Parliamentary State Secretary, Norbert Barthle. In addition, the BMU supports comprehensive climate protection measures through the International Climate Initiative (IKI). The Federal Ministry of Economics and Labor, 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.