Anyone who professionally observes climate conferences must occasionally wonder about how much praise is showered on the work of the responsible UN Secretariat, how many tasks are regularly delegated to it – and how dismal the payment morality of UN member states for this work turns out to be. Because UNFCCC boss Simon Stiell is once again having to go begging for funds, we have taken a closer look and ask: Who actually owes him all this money? Just a hint: It’s not the Germans, they dutifully contribute to the UN coffers. Let’s hope that this morality also remains intact in the federal budget for 2025.
German engineers are also leading in the cleantech industry in Europe, as another of our Features shows today. And in coordination with an EU delegation, the Germans are exploring in Beijing where and how international climate action efforts can continue – perhaps even if a potential US President Trump suddenly shifts into reverse gear again. Sufficient reason to inform you about the convoluted pathways through which climate policy is being shaped in China.
This year, finances will dominate international climate negotiations. “We’re talking about trillions, not billions,” said Simon Stiell, the Secretary-General of the UN Framework Convention on Climate Change (UNFCCC), at the ministerial meeting in Copenhagen on March 21 on this issue.
At the same time, Stiell has been talking about millions for months: Because his agency, UN Climate Change, which, among many other tasks, organizes and coordinates climate finance negotiations, is itself in acute financial difficulty. The main reason: Many UN member states, especially the large and wealthy countries with high CO2 emissions, either don’t pay or only partially and belatedly contribute to the work of the Secretariat.
Stiell warned that the biennial budget of his organization for 2024/25 is “less than half financed. We are trying to meet an ever-expanding mandate while simultaneously addressing the many challenges of today.”
In the years 2024 and 2025, the Secretariat, with its approximately 400 staff members, faces a lot of work, according to the budget proposal from Stiell’s administration: UN Climate Change must help with the implementation of the Global Stocktake, the reform of the financial agenda, and the drafting of new national climate plans (NDCs) in addition to other tasks. The core budget shows a “high dependence on unpredictable supplementary funding”.
However, COP28 only approved a core budget of 74 million euros, which member states are supposed to contribute to according to a distribution key. According to the COP decision, an additional 78 million euros in urgent and COP-desired tasks should come from additional and voluntary “supplementary funding”. However, less than 10 million euros have been received so far. Thus, there is a gap of approximately 68 million euros in the budget for 2024/25.
It is now uncertain what activities the Secretariat will still finance. Recently, there were reports that the regional “Climate Weeks” of the UN, where problems and solutions to the climate crisis are worked on with a regional focus, had been canceled for 2024 due to lack of funding. However, the Secretariat explained to Climate Briefings that the meetings had not been officially canceled but had been suspended due to a lack of funds. Depending on the funding by host countries, one or two of the meetings could still take place in the second half of the year. However, it is difficult to find donors and hosts.
From UN documents analyzed by Climate Briefings, it emerges which countries are withholding the most money: It is primarily the wealthy countries. Even the two largest CO2 emitters, the USA and China, have not paid their contributions to the Secretariat’s work as of March 1, 2024.
The poor payment morale of many countries has a long tradition at the UNFCCC and generally at the United Nations. In 2022, for example, only half of the total UN budget was collected by mid-year – partly because the USA and China did not pay. And the work of the UNFCCC Secretariat, based in Bonn, has also been repeatedly affected by outstanding payments in the past. According to UN data, there were deficits of 16 and 30 million euros in the budgets for 2019 and 2023, respectively.
The issue of finances for the work of the Secretariat is treated as secondary in climate negotiations. Such “technical issues” are negotiated at the very end of the COPs – when all political tensions have dissipated, ministers, media, and decision-makers have left the room, and general exhaustion sets in.
The current UN data also shows that out of the 198 countries of the UN Framework Convention, only 27 have already paid their contributions for 2024. These include:
In addition to the “core budget”, UN Climate has long had several special budgets that are filled voluntarily and unreliably. Just under nine million euros – clearly not enough to offset the deficits in the core budget – have flowed into the voluntary Trust Fund for “additional activities” in 2024. This includes just over two million from the UK, 1.5 million from the Open Society Foundation, and 1.2 million from the Rockefeller Foundation. Germany and Korea (the host countries for the UN Secretariat and the Green Climate Fund), as well as countries like the UAE, Belgium, Switzerland, Canada and Japan, and research institutes, are also contributing with smaller amounts.
And with just under a million, some countries finance a fund for “participation in the UNFCCC process”. COP28 host UAE has particularly stood out in 2024.
Given the negative reports currently circulating about the state of affairs in Germany, this assessment comes as quite a surprise: “Germany is a central hub for clean technologies” and hosts the most production facilities overall and in almost all considered technologies. This is the conclusion reached by the Brussels-based think tank Bruegel based on a new database. It examines the economic activity of European countries, including in future industries such as wind power, solar energy, heat pumps, batteries, and electrolyzers.
Indeed, Germany leads the way in many technologies. At the end of 2022, Germany accounted for one-third of the total installed wind and solar energy capacity in the EU – despite having less than one-fifth of the EU population. Germany not only leads in the use of this technology but also in employment: In 2022, according to Bruegel’s statistics, around 87,000 people were employed in the wind and solar sectors each. Germany also leads the EU in terms of production capacities for wind and solar plants.
While these figures may be relative when adjusted for population size, Germany still remains well above the EU average: In terms of installed solar capacity per capita, the country ranks second behind the Netherlands. The German figure, at 0.8 megawatts per capita, is twice as high as in significantly sunnier countries like Italy and Spain. In terms of installed wind capacity per capita, Germany ranks fifth behind the northern European EU countries Sweden, Denmark, Finland, and Ireland.
Bruegel also gives Germany a good grade when it comes to batteries: Currently, Poland, Sweden and Hungary lead in production capacities, where Northvolt, LG and Samsung each already operate large factories. However, when the three projects under construction by Northvolt, Volkswagen and CATL in Germany are completed, this will change. Germany will become “a new focus” for batteries, according to Bruegel.
There are contradictory results regarding heat pumps: In manufacturing, Germany ranks second with 24 production sites, behind Italy. However, in terms of usage, the country lags far behind: Only 4.4 percent of German households heated with a heat pump in 2022. In contrast, in Finland, this figure is 55.5 percent, in Sweden 46.3 percent and in Estonia 39.5 percent. The Bruegel figure for Germany differs from the three percent communicated by the BDEW because the Brussels-based think tank calculates using a uniform household size of 2.2 persons for better comparability.
The validity of the statistics is limited by the fact that most data only consider the year 2022. The rapid developments seen in 2023, especially in heat pumps and solar energy, are not yet included. In both fields, Germany achieved new record levels last year.
In addition to the good news about developments within the EU, the Bruegel database also shows where the real challenge lies in the fight for the green markets of the future: A comparison of the EU, USA and China shows how quickly China is currently pulling ahead: The installed capacity for wind and solar energy there was around twice as high as in the EU. Per capita, this still means a significantly lower value, but the recent growth rates suggest that this will change soon.
The development is even more extreme concerning production capacities and jobs: China already dominates in solar energy here; while the EU is still well-positioned in wind, China is rapidly catching up. Production capacities for electric cars, where China also sees significant growth rates, are not yet reflected in the Bruegel database.
Who decides on climate policy in China – and through which processes – is not easily discernible in the opaque structures of the Communist Party. However, one trend is clear: Since 2014, China’s system has increasingly been tailored to President Xi Jinping, who took office at that time. Consequently, Xi also sets the tone for climate policy.
For instance, in July 2023, he emphasized in a speech that the next five years would be a crucial phase to build a “beautiful China” (美丽中国) and an “ecological civilization” (生态文明). These are Xi’s code words for environmental and climate action, which he linked in the speech to his overarching goals of building a modern socialist country and promoting national rejuvenation. According to experts, this indicated a high priority for Xi on the issue. “Xi has been a key figure in China’s shifting stance on climate change,” several authors recently concluded in a Carbon Brief article.
He takes the issue seriously – because China suffers from the climate crisis and because the cleantech sector has become a growth industry for the country. Xi personally announced China’s 30/60 climate goals – peak emissions by 2030, carbon neutrality by 2060 – at the United Nations in September 2021.
Of course, China also has a Ministry of Ecology and Environment and a climate envoy like Liu Zhenmin for COP climate conferences. In addition, there is the National Energy Administration (NEA), the powerful National Development and Reform Commission (NDRC), which sets the framework for industrial policy, and a number of other ministries, all of which belong to the State Council. However, in the Xi era, they are ultimately just implementers of political directives coming from the CCP, as Prime Minister Li Qiang recently emphasized.
Xi manages the party through a network of commissions that he has gradually introduced since 2014. So-called “Central Commissions” act as permanent political super-ministries. A key role in this system is played by the Central Commission for Comprehensively Deepening Reform (CCDR/中央全面深化改革委员会), led by Xi himself.
The CCDR assigns ministries to develop specific plans or laws for a pre-determined point on Xi’s reform agenda. Once a measure is finalized, it is published in a document that immediately becomes a “law in force” and is therefore binding. The CCDR deals extensively with environmental policy, says Nis Grünberg, a climate expert at Merics, a German think tank with a focus on China. For example, it was the CCDR that once decided on China’s import ban on plastic waste. The government only formally adopted the ban afterward.
Often, it is party documents or plans – not laws – that set firm targets and thus anticipate legal regulations. Just like China’s Five-Year Plan, which is legally binding. Guidelines for the emission reduction path can be found, for example, in the 1+N plans gradually released since October 2021. They specify how China’s economy should be aligned with the 30/60 goals, broken down by sectors, industries and technologies.
The CCP documents always define the framework. For example, a document titled “Opinions on comprehensively promoting the construction of a beautiful China” (关于全面推进美丽中国建设的意见) was published by the Central Committee and the State Council at the turn of the year. “There are some meaningful targets for 2027 in this document and it is significant in speeding things up as it can provide a deadline for a lot of things,” comments Lauri Myllyvirta of the Centre for Research on Energy and Clean Air (CREA). Because it sets many specific deadlines, many of them for 2027. For instance, by 2027, 45 percent of new vehicle registrations are to be electric cars.
The document lacks details, which, according to Myllyvirta, is logical: High-level papers from the CCP Central Committee do not deal with the specifics of specific technologies. “That would be the task of the National Energy Administration, which is subordinate to the NDRC, which in turn is subordinate to the State Council, which in turn is subordinate to the party.” This corresponds exactly to the decision hierarchy for climate policy.
The 14th Five-Year Plan requires reducing energy consumption per unit of GDP by 13.5 percent between 2021 and 2025. The interim report on the ongoing plan, published in late December 2023, acknowledged that China is not on track to achieve its targets for CO2 intensity and energy intensity. Since the plan is binding, the authorities must now take action to prevent the plan from failing by 2025.
The number of published documents is as important as their content as a political signal, emphasizes a new study by the Oxford Institute for Energy Studies (OIES) on the subject. It is significant that so many recent documents have “highlighted the importance of environmental protection and targets across multiple major sectors”. This sends an important signal to local officials and the industry. “The official climate targets are a strategy that aspiring provincial politicians must follow today,” says Nis Grünberg to Table.Briefings. “It is important that Xi Jinping repeatedly addresses the issue of green development – and ensures that it is promoted. It is also about openness to new ways of thinking.”
This is crucial because, according to Grünberg, provinces and cities are very important in decisions about the future direction of energy policy. “They still have a lot of influence on investments and sometimes act as drivers for green energies. For example, some provinces are directly investing in the construction of large solar plants in their areas.” How a region decides depends, among other things, on its geography. “But leadership personalities also play a role,” emphasizes Grünberg: “Do they opt for the good old heavy industry and infrastructure programs? Or do they formulate a smart green development plan?”
In China too, lobbyists try to exert influence. While the old sectors – fossil energy producers or the heavy industry fueled by them, all large state-owned enterprises – want to stay in the game for as long as possible, the young companies of the cleantech sector are pushing for a faster transformation. This sector has long since become a systemically important growth engine, says Grünberg. “In climate policy, the conflict of interest between the old and new industries will intensify in the coming years. How this conflict is resolved by the government is the decisive factor, as it is with us.”
Anyone who professionally observes climate conferences must occasionally wonder about how much praise is showered on the work of the responsible UN Secretariat, how many tasks are regularly delegated to it – and how dismal the payment morality of UN member states for this work turns out to be. Because UNFCCC boss Simon Stiell is once again having to go begging for funds, we have taken a closer look and ask: Who actually owes him all this money? Just a hint: It’s not the Germans, they dutifully contribute to the UN coffers. Let’s hope that this morality also remains intact in the federal budget for 2025.
German engineers are also leading in the cleantech industry in Europe, as another of our Features shows today. And in coordination with an EU delegation, the Germans are exploring in Beijing where and how international climate action efforts can continue – perhaps even if a potential US President Trump suddenly shifts into reverse gear again. Sufficient reason to inform you about the convoluted pathways through which climate policy is being shaped in China.
This year, finances will dominate international climate negotiations. “We’re talking about trillions, not billions,” said Simon Stiell, the Secretary-General of the UN Framework Convention on Climate Change (UNFCCC), at the ministerial meeting in Copenhagen on March 21 on this issue.
At the same time, Stiell has been talking about millions for months: Because his agency, UN Climate Change, which, among many other tasks, organizes and coordinates climate finance negotiations, is itself in acute financial difficulty. The main reason: Many UN member states, especially the large and wealthy countries with high CO2 emissions, either don’t pay or only partially and belatedly contribute to the work of the Secretariat.
Stiell warned that the biennial budget of his organization for 2024/25 is “less than half financed. We are trying to meet an ever-expanding mandate while simultaneously addressing the many challenges of today.”
In the years 2024 and 2025, the Secretariat, with its approximately 400 staff members, faces a lot of work, according to the budget proposal from Stiell’s administration: UN Climate Change must help with the implementation of the Global Stocktake, the reform of the financial agenda, and the drafting of new national climate plans (NDCs) in addition to other tasks. The core budget shows a “high dependence on unpredictable supplementary funding”.
However, COP28 only approved a core budget of 74 million euros, which member states are supposed to contribute to according to a distribution key. According to the COP decision, an additional 78 million euros in urgent and COP-desired tasks should come from additional and voluntary “supplementary funding”. However, less than 10 million euros have been received so far. Thus, there is a gap of approximately 68 million euros in the budget for 2024/25.
It is now uncertain what activities the Secretariat will still finance. Recently, there were reports that the regional “Climate Weeks” of the UN, where problems and solutions to the climate crisis are worked on with a regional focus, had been canceled for 2024 due to lack of funding. However, the Secretariat explained to Climate Briefings that the meetings had not been officially canceled but had been suspended due to a lack of funds. Depending on the funding by host countries, one or two of the meetings could still take place in the second half of the year. However, it is difficult to find donors and hosts.
From UN documents analyzed by Climate Briefings, it emerges which countries are withholding the most money: It is primarily the wealthy countries. Even the two largest CO2 emitters, the USA and China, have not paid their contributions to the Secretariat’s work as of March 1, 2024.
The poor payment morale of many countries has a long tradition at the UNFCCC and generally at the United Nations. In 2022, for example, only half of the total UN budget was collected by mid-year – partly because the USA and China did not pay. And the work of the UNFCCC Secretariat, based in Bonn, has also been repeatedly affected by outstanding payments in the past. According to UN data, there were deficits of 16 and 30 million euros in the budgets for 2019 and 2023, respectively.
The issue of finances for the work of the Secretariat is treated as secondary in climate negotiations. Such “technical issues” are negotiated at the very end of the COPs – when all political tensions have dissipated, ministers, media, and decision-makers have left the room, and general exhaustion sets in.
The current UN data also shows that out of the 198 countries of the UN Framework Convention, only 27 have already paid their contributions for 2024. These include:
In addition to the “core budget”, UN Climate has long had several special budgets that are filled voluntarily and unreliably. Just under nine million euros – clearly not enough to offset the deficits in the core budget – have flowed into the voluntary Trust Fund for “additional activities” in 2024. This includes just over two million from the UK, 1.5 million from the Open Society Foundation, and 1.2 million from the Rockefeller Foundation. Germany and Korea (the host countries for the UN Secretariat and the Green Climate Fund), as well as countries like the UAE, Belgium, Switzerland, Canada and Japan, and research institutes, are also contributing with smaller amounts.
And with just under a million, some countries finance a fund for “participation in the UNFCCC process”. COP28 host UAE has particularly stood out in 2024.
Given the negative reports currently circulating about the state of affairs in Germany, this assessment comes as quite a surprise: “Germany is a central hub for clean technologies” and hosts the most production facilities overall and in almost all considered technologies. This is the conclusion reached by the Brussels-based think tank Bruegel based on a new database. It examines the economic activity of European countries, including in future industries such as wind power, solar energy, heat pumps, batteries, and electrolyzers.
Indeed, Germany leads the way in many technologies. At the end of 2022, Germany accounted for one-third of the total installed wind and solar energy capacity in the EU – despite having less than one-fifth of the EU population. Germany not only leads in the use of this technology but also in employment: In 2022, according to Bruegel’s statistics, around 87,000 people were employed in the wind and solar sectors each. Germany also leads the EU in terms of production capacities for wind and solar plants.
While these figures may be relative when adjusted for population size, Germany still remains well above the EU average: In terms of installed solar capacity per capita, the country ranks second behind the Netherlands. The German figure, at 0.8 megawatts per capita, is twice as high as in significantly sunnier countries like Italy and Spain. In terms of installed wind capacity per capita, Germany ranks fifth behind the northern European EU countries Sweden, Denmark, Finland, and Ireland.
Bruegel also gives Germany a good grade when it comes to batteries: Currently, Poland, Sweden and Hungary lead in production capacities, where Northvolt, LG and Samsung each already operate large factories. However, when the three projects under construction by Northvolt, Volkswagen and CATL in Germany are completed, this will change. Germany will become “a new focus” for batteries, according to Bruegel.
There are contradictory results regarding heat pumps: In manufacturing, Germany ranks second with 24 production sites, behind Italy. However, in terms of usage, the country lags far behind: Only 4.4 percent of German households heated with a heat pump in 2022. In contrast, in Finland, this figure is 55.5 percent, in Sweden 46.3 percent and in Estonia 39.5 percent. The Bruegel figure for Germany differs from the three percent communicated by the BDEW because the Brussels-based think tank calculates using a uniform household size of 2.2 persons for better comparability.
The validity of the statistics is limited by the fact that most data only consider the year 2022. The rapid developments seen in 2023, especially in heat pumps and solar energy, are not yet included. In both fields, Germany achieved new record levels last year.
In addition to the good news about developments within the EU, the Bruegel database also shows where the real challenge lies in the fight for the green markets of the future: A comparison of the EU, USA and China shows how quickly China is currently pulling ahead: The installed capacity for wind and solar energy there was around twice as high as in the EU. Per capita, this still means a significantly lower value, but the recent growth rates suggest that this will change soon.
The development is even more extreme concerning production capacities and jobs: China already dominates in solar energy here; while the EU is still well-positioned in wind, China is rapidly catching up. Production capacities for electric cars, where China also sees significant growth rates, are not yet reflected in the Bruegel database.
Who decides on climate policy in China – and through which processes – is not easily discernible in the opaque structures of the Communist Party. However, one trend is clear: Since 2014, China’s system has increasingly been tailored to President Xi Jinping, who took office at that time. Consequently, Xi also sets the tone for climate policy.
For instance, in July 2023, he emphasized in a speech that the next five years would be a crucial phase to build a “beautiful China” (美丽中国) and an “ecological civilization” (生态文明). These are Xi’s code words for environmental and climate action, which he linked in the speech to his overarching goals of building a modern socialist country and promoting national rejuvenation. According to experts, this indicated a high priority for Xi on the issue. “Xi has been a key figure in China’s shifting stance on climate change,” several authors recently concluded in a Carbon Brief article.
He takes the issue seriously – because China suffers from the climate crisis and because the cleantech sector has become a growth industry for the country. Xi personally announced China’s 30/60 climate goals – peak emissions by 2030, carbon neutrality by 2060 – at the United Nations in September 2021.
Of course, China also has a Ministry of Ecology and Environment and a climate envoy like Liu Zhenmin for COP climate conferences. In addition, there is the National Energy Administration (NEA), the powerful National Development and Reform Commission (NDRC), which sets the framework for industrial policy, and a number of other ministries, all of which belong to the State Council. However, in the Xi era, they are ultimately just implementers of political directives coming from the CCP, as Prime Minister Li Qiang recently emphasized.
Xi manages the party through a network of commissions that he has gradually introduced since 2014. So-called “Central Commissions” act as permanent political super-ministries. A key role in this system is played by the Central Commission for Comprehensively Deepening Reform (CCDR/中央全面深化改革委员会), led by Xi himself.
The CCDR assigns ministries to develop specific plans or laws for a pre-determined point on Xi’s reform agenda. Once a measure is finalized, it is published in a document that immediately becomes a “law in force” and is therefore binding. The CCDR deals extensively with environmental policy, says Nis Grünberg, a climate expert at Merics, a German think tank with a focus on China. For example, it was the CCDR that once decided on China’s import ban on plastic waste. The government only formally adopted the ban afterward.
Often, it is party documents or plans – not laws – that set firm targets and thus anticipate legal regulations. Just like China’s Five-Year Plan, which is legally binding. Guidelines for the emission reduction path can be found, for example, in the 1+N plans gradually released since October 2021. They specify how China’s economy should be aligned with the 30/60 goals, broken down by sectors, industries and technologies.
The CCP documents always define the framework. For example, a document titled “Opinions on comprehensively promoting the construction of a beautiful China” (关于全面推进美丽中国建设的意见) was published by the Central Committee and the State Council at the turn of the year. “There are some meaningful targets for 2027 in this document and it is significant in speeding things up as it can provide a deadline for a lot of things,” comments Lauri Myllyvirta of the Centre for Research on Energy and Clean Air (CREA). Because it sets many specific deadlines, many of them for 2027. For instance, by 2027, 45 percent of new vehicle registrations are to be electric cars.
The document lacks details, which, according to Myllyvirta, is logical: High-level papers from the CCP Central Committee do not deal with the specifics of specific technologies. “That would be the task of the National Energy Administration, which is subordinate to the NDRC, which in turn is subordinate to the State Council, which in turn is subordinate to the party.” This corresponds exactly to the decision hierarchy for climate policy.
The 14th Five-Year Plan requires reducing energy consumption per unit of GDP by 13.5 percent between 2021 and 2025. The interim report on the ongoing plan, published in late December 2023, acknowledged that China is not on track to achieve its targets for CO2 intensity and energy intensity. Since the plan is binding, the authorities must now take action to prevent the plan from failing by 2025.
The number of published documents is as important as their content as a political signal, emphasizes a new study by the Oxford Institute for Energy Studies (OIES) on the subject. It is significant that so many recent documents have “highlighted the importance of environmental protection and targets across multiple major sectors”. This sends an important signal to local officials and the industry. “The official climate targets are a strategy that aspiring provincial politicians must follow today,” says Nis Grünberg to Table.Briefings. “It is important that Xi Jinping repeatedly addresses the issue of green development – and ensures that it is promoted. It is also about openness to new ways of thinking.”
This is crucial because, according to Grünberg, provinces and cities are very important in decisions about the future direction of energy policy. “They still have a lot of influence on investments and sometimes act as drivers for green energies. For example, some provinces are directly investing in the construction of large solar plants in their areas.” How a region decides depends, among other things, on its geography. “But leadership personalities also play a role,” emphasizes Grünberg: “Do they opt for the good old heavy industry and infrastructure programs? Or do they formulate a smart green development plan?”
In China too, lobbyists try to exert influence. While the old sectors – fossil energy producers or the heavy industry fueled by them, all large state-owned enterprises – want to stay in the game for as long as possible, the young companies of the cleantech sector are pushing for a faster transformation. This sector has long since become a systemically important growth engine, says Grünberg. “In climate policy, the conflict of interest between the old and new industries will intensify in the coming years. How this conflict is resolved by the government is the decisive factor, as it is with us.”
