Welcome
Press Release by the Federal Foreign Office and the Federal Ministry for Economic Affairs and Climate Action
At the last UN Climate Change Conference COP28, the German Federal Government launched the Green Guarantee Group. It will develop concrete recommendations before the COP30 in Brazil on how to advance the use of “green guarantees” in promoting green investments and increase their effectiveness.
Foreign Minister Annalena Baerbock:
The days when extreme climate events only appeared on the news every few months are long gone. Hurricanes, floods, droughts - every day the news show how drastically and perpetually climate change is affecting the lives of many people here and around the world.
The good thing is: we already have the knowledge and the tools available to effectively address climate damage. At the same time, preserving a livable planet does not come for free; it costs money, plenty of money. Wind turbines have to be built, technologies need to be advanced, flood damage has to be prevented. And it is not only in Europe that public budgets are reaching their limits. Enormous sums are available on the financial markets. But the vast majority of green investments flow into industrialized countries. This is not only unfair, it is also not very effective.
With the Green Guarantee Group, convening in Berlin tomorrow, we are addressing essential questions of climate finance: How do we adjust the levers of the international financial system so that funds flow to where they are most effective? How do we create intelligent incentives so that private investors invest their money where climate protection measures bring the greatest added value? So that in the future, for example, on the African continent – where 60% of the suitable areas are – there will be much more than just one percent of solar systems.
Minister Robert Habeck:
For raising the trillions of dollars needed for the green transition globally, we need to unite on all levels. Nationally, internationally but also the public and private sector. This combination can be found in blended finance, especially in green guarantees, which are known to be an important enabler for crowding private capital into the green transition, while only putting little pressure on public budgets. The Green Guarantee Group brings together a variety of countries and institutions. Together, we will push the uptake of green guarantees and thus mobilize private investments in clean technologies in emerging and developing markets.
In order to effectively protect the climate globally, to promote adaptation to climate change and to support emerging and developing countries in achieving their climate goals, the industrialized countries have committed to mobilizing USD 100 billion annually for climate protection measures in developing countries by 2025. This commitment requires a broad donor base. Germany, for example, contributed a total of EUR 9.9 billion in 2023, of which EUR 5.7 billion came from the federal budget, but also mobilized private investments with public funds. The mobilization of private funds was increased to more than EUR 4.2 billion last year. It is a central pillar of international climate finance, particularly in times of strained budgets.
In order to further increase the share of private investment in climate protection, on Tuesday, 01 October 2024, the German government is launching the next phase of the Green Guarantee Group (GGG) in the wake of the Berlin Global Dialogue. More than 90% of green investments continue to flow to industrialized countries, leaving climate projects in emerging and developing countries severely underfunded. The GGG is aiming to remedy this imbalance by focusing on guarantees as a key instrument for mobilizing and leveraging private investment and accelerating sustainable development.
In March 2024, the GGG initiated a series of discussions between government representatives, multilateral development banks, development agencies, think tanks, the private sector, academia and civil society. The Berlin Global Dialogue now offers the opportunity for a first high-level political exchange on the challenges, ideas and future of green guarantees.
The Federal Foreign Office and the Federal Ministry for Economic Affairs and Climate Protection have appointed Lars-Hendrik Röller as Chair of the GGG. He was Germany's Sherpa for the G7 and G20 for over 10 years and economic advisor to former Chancellor Angela Merkel. He is a professor at ESMT and chair of the Berlin Global Dialogue. The GGG's activities are supported by a secretariat based at the European Climate Foundation and headed by Morgan Després.