Additional measures needed to close “financing gap” for Germany's 2030 climate targets – report

Additional political efforts are needed to close the public "financing gap" for measures needed to meet Germany's 2030 climate targets, according to a Green Budget Germany (FÖS) report commissioned by WWF. Public funds necessary to achieve Germany's 2030 climate targets sufficiently cover the financial needs of the construction and industry sectors, said the report. However, the sectors of hydrogen production and infrastructure, nature conservation, electrification, and public transport are significantly underfunded and would require additional public money, according to the report. Moreover, there is a clear discrepancy between planned and actual expenditure. 

"We need a clear and coherent climate finance concept, including an impact check, to secure revenues, guide government spending and private capital, and verify climate and environmental impacts by default," Viviane Raddatz, climate head at WWF Germany, said. There is a public financing need for around 51 billion euros annually in the years until 2030 – without including the "climate bonus" or funds for climate adaptation – according to the report, while public spending and tax cuts amounted to less than 20 billion euros in 2022, for example. WWF also called for the government to phase out environmentally harmful subsidies, which currently amount to about 65 billion euros per year, as they undermined the effectiveness of funds allocated to climate protection.

Germany is spending billions on becoming climate neutral by 2045, but has no idea whether this money is well spent, according to the country’s Federal Court of Auditors (Bundesrechnungshof). It was often unclear what share of the items in the federal budget were used for climate action, it said in a report earlier this year. Germany has set the target of cutting emissions by at least 65 percent by 2030 compared to 1990 levels.