Germany’s climate budget too small for necessary public investments – report

Germany’s designated climate action budget – the Energy and Climate Fund (KTF) – isn’t big enough to fully cover the necessary climate-friendly transformation costs, especially if the economy and taxpayers are also to be relieved, researchers have concluded in a report by the state-supported Ariadne project. The fund is largely fed with revenues from carbon pricing, which could amount to up to 302 billion euros by 2030, said the researchers. “At the same time, the total need for public climate investment is estimated at up to 616 billion euros, especially if CO2 prices do not rise sufficiently,” they wrote. The report recommends that the transformation of public infrastructure should be financed through regular budget funds rather than the KTF, as it is one of the central tasks of government. When subsidising private investments, for example in the building and transport sector, the report advises smaller and targeted programmes.

The KTF was established in 2010 as an “essential contribution” to the implementation of the government's long-term energy concept. It enables additional programme expenditures to promote an environmentally friendly, reliable and affordable energy supply and climate protection. The fund’s role as a central financing instrument for the energy transition and climate protection in Germany was further strengthened with the Climate Protection Programme 2030. The current government coalition has decided to further develop it into a “Climate and Transformation Fund”.