New German government signs off 60-billion-euro climate investment

Germany’s new federal government has officially begun its journey towards achieving the ambitious climate targets set out in its coalition agreement, this week signing off a 60-billion-euro climate investment plan. 

Germany invests in climate to boost economy

Hailing the investment as a “booster for the economy”, Federal Finance Minister Christian Lindner said it would “enable us to sustainably cope with the economic consequences of the corona pandemic and start a powerful departure into a climate-neutral and digital future for Germany.”

The money - unused funds from the government’s coronavirus budget - will be used to top up the Energy and Climate Fund, which was set up in 2011 to enable investments in climate protection and the energy transition beyond the federal budget. The Finance Ministry stressed that, since only unused credit is being used to finance the funds, there will be no new borrowing.

Traffic light coalition has ambitious climate targets

The “traffic light parties” that make up Germany’s new ruling coalition government have laid out a series of ambitious climate targets for the coming years, including an accelerated commitment to phase out coal by 2030, and source 80 percent of electricity in Germany from renewable sources by 2030. 

The reallocation of the funds has been criticised by some opposition parties, with Dietmar Bartsch of the Left party slamming the fact that the government chose to repurpose money earmarked for supporting businesses during the coronavirus pandemic, rather than increase taxes for the super-rich.

The coalition, on the other hand, has pointed out that many climate investments were not paid or were watered down as a result of the coronavirus crisis. They have further stressed that investments that “promote the necessary transformation to a climate-neutral economy” have made a “significant contribution” to alleviating the consequences of the pandemic.