Germany is to double its contribution to international climate finance by 2020, on the basis of the 2014 figures. Development aid is to be increased by a total of 8.3 billion euros for the period 2016 to 2019, said Chancellor Angela Merkel in her speech at the Petersberg Climate Dialogue.

At the two-day meeting, ministers from some 35 countries continued preparations for the climate agreement to be adopted at the UN Climate Change Conference in Paris at the end of the year.

Germany will honour its pledges

The Chancellor pointed out that Germany has quadrupled state-funded climate finance since 2005, bringing the total to a good 2 billion euros in 2013. To this sum must be added over 1.5 billion euros in loans extended by the KfW Group for climate change mitigation and adaptation to climate change in developing countries. These states, declared the Chancellor, need help if they are to cope with the consequences of climate change, including droughts and flooding. "They cannot cope with these impacts without external support," stressed the Chancellor.

Stepping up international climate finance

International climate finance is a critical factor, which will determine whether the Paris conference is a success or a failure, underscored the Chancellor. More than 10 billion US dollars have been pledged through the Green Climate Fund. Now the first projects must be selected and launched, said Angela Merkel, to strengthen the confidence of the countries that depend on this funding.

In 2009 at the UN Climate Change Conference in Copenhagen, the industrialised states agreed to mobilise a total of 100 billion US dollars (87 billion euros) a year as of 2020 from public and private sources for developing countries. "We are aware that the industrialised nations as a whole will have to do more if we are to honour the pledge," stressed Angela Merkel. A clear roadmap is needed to close the gap, she added. Alongside public funds, capital must come from the private sector.

A universally binding agreement is the goal in Paris

The Chancellor stressed how important it is for the Climate Change Conference at the end of the year in Paris to succeed. Success hinges on the ability of the conference to produce a binding climate agreement. "The benchmark is the two-degree ceiling on global warming." The impacts of climate change will only be controllable to any degree if we manage to keep global temperature rise down to no more than 2° Celsius as compared to the pre-industrial period, she explained.

French President François Hollande, who will be hosting the Paris conference, stressed that the national emission reduction targets announced so far fall well short of what is needed to keep global warming under the two-degree ceiling. Angela Merkel called for an ambitious "last push forward as we enter the home straight". The national contributions of all 194 states parties are to be announced prior to the conference in Paris. So far only 40 states have published their plans.

Decarbonisation in the 21st century

Angela Merkel and François Hollande called on the international community to completely renounce the use of oil, gas and coal over the decades to come. All energy needs should be met using renewable sources. "We must decarbonise our economies in the 21st century," said Angela Merkel. The most important instrument is to be a global trading system in pollution rights. "It must be our goal to put in place a global carbon market with a robust price for CO2 emissions."

The European Union already has a market on which pollution rights are traded – emissions trading. All companies generating CO2 emissions are required to buy certificates for every tonne of emissions. Prices, however, have plummeted in the wake of the long economic crisis. The EU has thus adopted a reform which should push up the prices of certificates again.