Germany « Climate Equity

Observed around the world with varying degrees of curiosity, high expectations and hopes, skepticism, potential good will or schadenfreude, Germany, Europe’s largest economy, has embarked on probably the furthest reaching energy transformation of any industrialized country by its recent government decision – confirmed by a parliamentary vote end of June – to phase out nuclear energy by 2022.  This will be a costly endeavor, no doubt, a multibillion-dollar experiment to improve the country’s electricity grid and scale up generation and use of renewable energy domestically.  If Germany’s great energy transformation effort succeeds, other industrialized countries will have a harder time arguing that a low-carbon energy transformation will necessarily cost jobs, reduce a country’s economic growth and threaten its global competitiveness. 

Yet, the German experiment can only then be judged a true success, if Germany does not fund its national energy transformation  at the expense of its international obligations and pledges to help developing countries finance their own low-carbon and climate-resilient development.  Funding both the energy transformation at home and internationally at the same time, without short-cuts and excuses:  this  will set Germany apart from the rest of the industrialized world and cement a true German leadership position in climate actions globally ….. (more…)

In 2007,  Ecuadorean President Rafael Correa first suggested that his country would forgo oil exploitation in its Yasuni National Park indefinitely if the world community would compensate the Ecuadorean people for half of the unrealized income of US$ 7.2 billion via contributions to a special trust fund. This innovative idea for a new way to help a resource-rich but income-poor country like Ecuador overcome its resource-curse and develop in a more sustainable and climate-friendly way “post-petroleum” was greeted with a lot of enthusiasm.  Germany, having long established development cooperation ties with Ecuador, was one of the first countries signaling their support for such a fund.  In 2008, the German parliament, in a rare display of unity across the aisles, confirmed its willingness to appropriate funding.  Fast-forward three years:  Ecuador has been able to transform an innovative idea into a legally sound mechanism.  In early August, the Yasuni Ishpingo Tambococha Tiputini (ITT) Trust Tund, which ismanaged by UNDP, became a reality and ready to receive major contributions… 

But what is not (yet) happening, is major donor country support.  Especially, the recent refusal of Germany’s Development Minister Niebel to pay into the Yasuni Trust Fund is a setback.   One cannot underestimate the bad signal it sends to other potential donor countries hinting that the Trust Fund might, well, not be trustworthy. On top of it, Germany does itself – and its aspirations to global leadership in issues like climate change and institutions such as the UN Security Council – a huge disservice.  Let’s hope that the setback is temporary – and Germany’ can embrace the Yasuni Trust Fund in a major way after all.  There are many good reasons, why this innovative development financing tool is worth the world community’s support and generous financial contributions by countries such as Germany. (more…)

The German conservative-liberal coalition government of Chancellor Angela Merkel (who in an earlier incarnation was portraying herself as international climate policy champion) has apparently decided that in the face of budgetary shortfalls and fiscal consolidation its international climate finance commitments can be considered nill and void.  This seems the only explanation for the cabinet’s recent decision to appropriate in its draft budget for 2011 and its projection for 2012 under the budget lines “Climate Protection Measures in Developing Countries” for the Development Cooperation and Environment Ministries only one dismal figure: ZERO.

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Last week the so-called Petersberg Climate Dialogue ended after two days of meetings, hosted by Germany and Mexico, which had brought environment ministers and representatives of 43 countries to Bonn, Germany.  Amid a lot of mutual reassurances on the need for strengthening the UNFCCC, the promise of a new momentum in international climate talks as well as urgent calls for a higher level on ambition in emissions reductions, the critical issue of climate change financing received some attention, albeit little new cash.

No, no, this was not a financial coming-out party of the countries present, during which check books were graciously pulled out of the pockets and large checks for adaptation and mitigation efforts written.  Financially, Petersburg provided only peanuts, even if Germany as host felt compelled to promise a small contribution of EUR 10 million to the Adaptation Fund.

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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.

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