Climate crisis can justify state borrowing beyond debt limits, says German regional constitutional court
Clean Energy Wire / taz
The climate crisis constitutes an “exceptional emergency” that can justify state borrowing beyond constitutional debt limits, said the constitutional court of the German city state of Bremen in a ruling about the state’s budget. However, the court set strict conditions for justifying such borrowing, and returning to the regular budget.
Human-made climate change has become “an acute climate crisis which in terms of its nature, intensity, effects, spatial extent, and temporal dynamics, constitutes an exceptional emergency situation,” said the court.
Lawmakers from Bremen's parliamentary opposition, the Christian Democrats (CDU), had argued that climate change is not an acute, sudden and temporary emergency and thus could not justify additional state debt – as the federal state's governing coalition led by the Social Democrats (SPD) did for the 2023 and 2024 state budgets. The CDU said long-term challenges like climate change must be addressed through the regular budget.
The court, however, countered that excluding climate change as a ‘permanent crisis’ or ‘new normal’ from emergency financing “ignores the latest findings in climate science on the dynamic increase in risk and the concrete danger of so-called tipping points.”
Still, the judges ruled that Bremen’s 2023 and 2024 budgets violated debt rules, as the government had not sufficiently linked specific spending measures to the climate emergency. The court said that the longer a crisis lasts, the more a government must rely on regular financing and plan an exit from emergency loans.
The court's decision is “a milestone for climate protection,” said Bremen finance minister Björn Fecker. But he stressed that it was not a “free pass” to finance all climate measures through emergency loans, noting that the court had set a high bar for justification.
The ruling could influence Germany’s 15 other federal states, as state constitutional court rulings are also taken into account in decisions there, said newspaper taz. “Anyone who wants to finance climate protection measures at city, state or federal level in the future but does not have the money for this in their normal budget will take a very close look at what the Bremen court has decided,” it wrote.
A ruling by Germany's highest court in November 2023 declared an integral part of the government's funding plan for climate and energy programmes unlawful. The court found that the coalition could not reallocate tens of billions of euros in unused pandemic-related borrowing to finance climate measures.
