Budget cuts are painful, no doubt about it. In times of empty coffers and growing deficits some really hard choices have to be made. Too bad that one of the first cuts in Germany’s ongoing budget negotiations under the conservative-liberal coalition government has been to the credibility of Germany as a leading nation in international climate policy.
Just three months ago at the COP 15 in Copenhagen, German “climate chancellor” Angela Merkel and her G8 chums had promised developing countries who felt wounded by the minimalist Copenhagen Accord instead of the hoped-for comprehensive post-Kyoto Agreement a financial band-aid in form of quick and non-bureaucratic fast-track climate financing of an additional US$ 30 billion (approximately € 23 billion) over the next three years. The EU’s share was supposed to be € 7.2 billion, of which some € 1.26 billion (or € 420 million per year 2010 to 2012) were to be paid by the Merkel government.
‘Additionality’ to existing development aid is the key criterion here, and thus the litmus test for the credibility of international climate finance pledges, as a new Post-Copenhagen analysis by hbf and ODI emphasizes. Germany had promised that its contributions to the short-term finance pledges given in Copenhagen would be additional to existing ODA.
The grandiose sounding pledges have now met with reality — and it is not pretty. Germany’s promises do not pass the litmus test of additionality. In ongoing budget talks only a meager € 70 million of Germany’s contribution to the fast-track finance for 2010 is truly in addition to existing development aid, while € 350 million have just been ‘recycled’ from existing aid programs. One can call this benevolently ‘creative budgeting’, but also — more to the point — ‘deceptive packaging’, ‘cynicism’, or ‘breach of promise’.
Observers of the budget negotiations even reported that it could have been worse, that at times not one Euro of new money was booked under international climate aid. Unfortunately, this episode doesn’t bode well for the future, and the next two years of the fast-track climate financing period until 2012. German media in recent days have openly speculated that the German Environment Ministry(BMU) as early as next year might lose its current income from the auction of German emissions certificates under the European emissions trading system. The BMU has used this money to set up and fund climate projects under its International Climate Initiative (ICI). Instead, Germany’s auction revenue (half of which has gone to the BMU the last two years) from 2011 on might go entirely to the German Ministry of Finance.
This would be a tragedy, especially since the ICI in an international comparison of bilateral climate initiatives proved to be the class valedictorian: in 2009, all promised finance pledges were fulfilled, some US$ 360 million. And this is definitely the exception, rather than the rule in international climate finance.
Bad enough, if Germany was the only G8 country to renege on its promises for additional international climate finance. Alas, it isn’t. British observers have revealed that the UK Treasury also had promised money in Copenhagen for climate aid — some £1.5 billion over three years — which it had already booked as development assistance. Fearing that in view of the ongoing economic and budget crisis in G8 countries the UK and Germany might not be the last are countries to dodge their Copenhagen pledges, climate finance experts are worrying that none of the € 10 billion in short-term finance to be collected in 2010 might be “new and additional” money as had been promised. They resolve to keep track and the governments to account for a major public deception in the making.
In light of these developments, it does not surprise that developing countries in the international climate negotiations are wary of pledging national actions on emissions reductions. How can Annex 1 countries ask them to bind themselves to mitigation commitments, if industrialized countries are not willing to fulfill their financing ones? Ultimately, what could be more fundamentally and morally binding as the commitment for industrialized countries to financially support the poorest developing countries in dealing with the adverse affects of climate change to which they have scarcely contributed?
Germany might have “saved” € 350 million in taxpayers’ money by not fulfilling its Copenhagen pledge for 2010. Internationally, the government of Angela Merkel has lost credibility and — after a weak performance in Copenhagen — even further ground on its claim to be one of the stalwart promoters of a forward-thinking, solution-oriented international climate policy. And this is an asset in international politics whose value cannot be measured in Euro and Cents.