German coalition agrees defence and climate package: comment

"Just as Spain's Prime Minister said that defence for his country includes against those threats posed by climate change [2], so the new German government has explicitly recognised that it is not a trade-off between defence and climate change. This is as true for tackling both, as it is to protecting each country's prosperity and growth.

"Here in the UK, commitment to tackle climate change has seen the net zero industries grow far faster than the economy as a whole, and contribute £83 billion in value to the UK economy. Despite claims by some UK commentators that we must choose between net zero and defence, it is increasingly clear that, as climate disasters worsen everywhere fundamentally threatening our food and wider national security, there is no choice. And with an acceleration to net zero meaning a decrease in our foreign gas dependence, tackling climate change also boosts our national security in terms of energy. "

The funding for climate change is targeted at investments to help Germany reach its overall goal of reaching net zero by 2045, suggesting that the coalition partners see it as a key measure for bolstering growth. Recent analysis of the net zero economy by CBI Economics found that the sector is a significant engine of growth for the UK; between 2023 and 2024, the sector grew 10.1% and now generates £83.1 billion in Gross Value Added (GVA), with £28.8 billion directly from net zero businesses and £54.3 billion from supply chain activities and broader economic contributions. [3]