Financing climate mitigation and adaptation measures

Climate change is threatening the natural resource base on which our lives depend. Concerted international action is required in order to limit global warming to under 2 °C and implement adequate measures for adapting to the impacts of climate change. But how will such measures be financed? This is a key question in international climate negotiations. In these negotiations, industrialised countries agreed to provide financial support to developing countries for their necessary reform and transformation processes. For example, in the Copenhagen Accord in 2009, industrialised countries committed to jointly mobilise 100 billion US dollars annually by 2020 from various sources of financing (public and private, bilateral and multilateral - including alternative financing sources). The Paris agreement form 2015 extended this pledge to 2025, with a higher target to be set for the post-2025 period.

Germany is reliably fulfilling these commitments. The German Federal Ministry for the Environment (BMUB) and the Federal Ministry for Economic Cooperation and Development (BMZ) are financing numerous international climate activities. Both ministries are closely coordinating their priorities for bilateral and multilateral activities. IKI is BMUB's main instrument for promoting climate change mitigation and adaption measures across the globe.

Green Climate Fund

The Green Climate Fund (GCF) plays an important role due to its Mandate to support the paradigm shift to a low-emission and climate-resilient society. After the first donor conference in Berlin in November 2014 and COP 20 in Lima, the funds pledged for the GCF already totalled US$10.2 billion by the end of 2014,32 making it the largest multilateral climate fund. At the Petersberg Climate Dialogue in July 2014, Germany made the first international contribution and pledged €750 million for initial capitalisation (approximately US$1 billion) of the GCF.

German Climate Technology Initiative

The German Climate Technology Initiative (DKTI), founded by BMUB and BMZ in 2011, promotes the spread of climate technologies which have been tested and found to be technically sound but still encounter obstacles when entering the market in emerging economies and developing countries. The Initiative is being implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and KfW. The DKTI combines both technical and financial cooperation measures and pursues the following objectives:

  • Transforming to a low-carbon economy in emerging economies, developing countries and transition countries and contributing to the achievement of the 2 degree climate goal;
  • Mobilising economic potentials for climate technologies;
  • Linking climate protection, sustainable development and poverty reduction;
  • Contributing to Germany's international commitments to climate and development finance (ODA).

More information:

www.kfw-entwicklungsbank.de (external)

Climate change partnership (external)

Energy and Climate Fund

Between 2010 and the end of 2013, the Special Energy and Climate Fund (EKF)  complemented the national and international climate financing of the German Government, and contributed to its international climate and biodiversity projects. 40 million euros from BMUB's portion of the EKF went to the NAMA Facility being supported in cooperation with the British Department of Energy and Climate Change.

Fast start financing

In 2009 in Copenhagen, industrialised countries agreed to provide 30 billion US dollars in additional public funding from 2010 to 2012 for fast start finance. The German Government contributed approximately 1.29 billion euros, thus fulfilling its international commitments. IKI plays a key role in German fast start financing.

Further information:

Study: "German Fast Start: Lessons Learned for Long‐Term Finance" (PDF, 2,6 MB)

Flyer "Fast start finance - Review and lessons learned" (PDF, 1,08 MB, accessible PDF)

Project lists fast start finance

Post fast start financing

At the end of the fast start period in 2012, Germany announced at the Doha climate negotiations that the international climate finance budget will be increased from 1.4 billion euros in 2012 to roughly 1.8 billion euros in 2013.

IKI Key Area

Further information