In the wake of the ruling of the Germany’s Constitutional Court two days ago that the government’s shifting funds from the anti-coronavirus fund to the climate-related fund KTF was against the constitution, the government all of a sudden lacks €60 billion of €216 billion earmarked for green projects until 2027. Green economist Claudia Kemfert from the German Institute for Economic Research suggests that “we will have to consider declaring a climate emergency.” Kemfert told the Berlin-based Tageszeitung daily that like the coronavirus emergency, “the climate emergency is here and we can declare it,” justifying extra borrowing by the government outside of the fiscal debt brake which is declared obligatory by the Constitution.
Kemfert said one way forward was the removal of climate-damaging subsidies: According to a list from the Federal Environment Agency, the abolition of 41 state subsidies would generate more than €60 billion. However, for legal reasons, only half of it can be abolished in the short term.
The Constitutional Court ruling “was a black day for climate protection,” complained Kemfert. The KTF is the government’s central instrument for climate protection projects. Its funds are to be used to finance measures for greater energy efficiency or the expansion of charging infrastructure, for example. It is not yet clear exactly which projects will be affected by the lack of funding. Whether or how the hole will be filled is also unclear. Due to the debt brake, the government cannot solve the problem with loans. Of course, the easiest way to solve the problem would be the scrapping of green projects.
