Environmental groups call Germany’s 200-billion-euro climate spending announcement a trick calculation

The announcement by German finance minister Christian Lindner (FDP) and economy minister Robert Habeck (Green Party) that Germany would invest 200 billion euros in climate action and energy transition projects by 2026 has been criticised by environmental groups, which accused the government of engaging in false accounting and trick calculations. NABU (Nature and Biodiversity Conservation Union) says the government is not going to disburse much more than what was already planned. “The 200-billion-euro climate finance package appears impressive but mostly contains funds that have already been included in the government’s budget planning,” NABU head Jörg-Andreas Krüger said. The energy and climate fund will receive 30 billion euros in additional funding over five years, much of which will be spent on lowering power prices, he argued. Programmes to reduce the use of gas and oil in buildings or for the transition to fully electric cars would continue to be underfunded, Krüger added. NGO Greenpeace said the financial plans would essentially mean that the government “sticks to the status quo” in energy policy and does not release new funding. Greenpeace’s Mauricio Vargas said replacing the current levy on power prices to fund renewables expansion, which the government plans to ease the burden on customers, would already cost the state about 12 billion euros per year. “These funds are needed for a rapid pivot away from fossil energies,” Vargas argued.
By contrast, Green Party leader Omid Nouripour said in the Frankfurter Rundschau the new plan would in fact top up previous budget drafts by 90 billion euros. “The plan of the previous government was 110 billion euros,” Nouripour said. While the new coalition of the Greens, the FDP and the Social Democrats (SPD) initially wanted to increase climate action and energy transition spending by 60 billion euros, “the remainder now comes on top of that.”

Almost all funding of climate action and energy transition activitiesis carried out via the Energy and Climate Fund, a special budget that is filled with proceeds from emissions trading, CO2 pricing and state money. The new government has transferred 60 billion credit-financed euros earmarked for pandemic recovery measures into the fund, a measure that has been contested by the country’s auditors as well as the conservative opposition party CDU for undermining the country’s budget rules.