Climate Change

This background paper by IESR and Germanwatch examines the climate financing landscape in Germany and Indonesia, focusing on climate mitigation in the energy sector. For Germany, this paper provides a comprehensive summary of its climate financing flows, structure, and global trends. With respect to Indonesia, it examines its climate mitigation targets and achievements, energy transition financing trends, and potential avenues for international climate finance support.

Climate change is increasingly evident through devastating impacts on lives and livelihoods, such as the destructive floods in Pakistan and Indonesia. The likelihood of global warming exceeding 1.5°C is over 50%, amplifying the severity of climate change effects and associated losses. This background paper discusses Loss and Damage in Indonesia, explaining the concept, its history within the UNFCCC, and providing an overview of financing options.

The current international scenario is characterised by a complex web of global crises. This situation is having a particularly negative impact on the countries of the Global South, which are facing considerable financial constraints that are hindering the implementation of the 2030 Agenda. In this context, the French Government is organising the Summit for a New Global Financing Pact on 22-23 June 2023, which aims to forge a new pact between Global North and Global South countries.

In the lead up to this weekend’s G7 Leaders’ Summit in Hiroshima, Germany has been exposed for joining Japan in pushing fellow G7 members to backslide on previous commitments and endorse increased public investments in gas. Contrary to what Germany’s Chancellor Olaf Scholz says, different studies show that new investments in gas are not necessary to increase energy security but only exacerbate the climate crisis and threaten food security. Chancellor Scholz risks undermining a successful G7 Summit regarding climate for the second year.

Following the release of their ‘Instrument Methods’ for Paris alignment, the World Bank Group published accompanying sector notes for Energy and Extractives; Agriculture and Food; Transport; Environment, Natural Resources and Blue Economy; Water; as well as Urban, Resilience, Disaster Risk Management, and Land. The notes detail the approach to assess whether different types of projects in these sectors are aligned with the Paris Agreement. The World Bank Group will update the notes, and will publish six more for additional sectors. In this blog we look at whether the approaches in the notes are sufficient to avoid financial flows that conflict with the Paris Agreement.

To take advantage of the Just Energy Transition Partnership (JETP) and other financing opportunities, Indonesia must identify key requirements to create the right environment for cooperation without violating existing principles. Our background paper provides a brief overview of the state of the energy transition plan and financing in Indonesia.

In a series of dialogues with Indonesian civil society organisations (CSOs), Germanwatch and the Habibie Center explored how to integrate social justice aspects into the energy transition debate in Indonesia. This policy brief provides the context for how Indonesian CSOs view the JETP and how they relate to other key socio-economic issues.

The World Bank Group (WBG) has published the first set of documents beginning to detail how they will align their investments with the Paris Agreement – the so-called “Paris Alignment Methodology”. The publication of these methodologies is a long overdue first step to deliver on the commitment to align the WBG operations with the goals of the Paris Agreement. They will need to be strengthened and clarified to fully align the WBG investments with the Paris Agreement.

On Friday, 10 March 2023, the EU’s Foreign Affairs Council (FAC) adopted its conclusions on climate and energy diplomacy for this year, entitled: ‘Bolstering EU climate and energy diplomacy in a critical decade’. In this blog post, we present the key priorities to which the Council agreed and highlight the areas where the EU needs to provide more clarity and increase its ambition.

The emerging polycrisis is challenging governments and institutions around the world. Especially countries in the Global South lack the financial capacity to address the current challenges and simultaneously prepare their nations for the impacts of climate change. The existing international financial architecture has so far been unable to provide the necessary financial resources.There are three major reform proposals that address different institutions within the international financial architecture. This primer introduces the proposals presented and provides an overview of the main institutions and actors involved in the process in Germany.