The global community is once again looking back on an extremely bitter record. According to calculations by the "Global Carbon Project" of the Future Earth research network, more carbon dioxide was emitted from fossil fuels in the past twelve months than ever before - an estimated 36.8 billion tonnes. Limiting global warming to 1.5 degrees is now considered unrealistic by scientists.

These are frightening findings. To make matters worse, those working on innovative solutions to decarbonise the economy have had anything but an easy time this year. As in the previous year, the turnaround in interest rates, inflation and the general economic downturn have led to massive uncertainty among start-up investors. According to an analysis by consultancy firm PwC, 1.3 billion dollars in venture capital flowed into climate protection technologies in Germany last year. The fact that this is less than in the boom year of 2021 is not surprising initially. However, it is also a sharp drop of 48% compared to 2022. Even in 2020, the volume was higher.

Germany is one of the key players in this sector, alongside the USA, China, Great Britain, Sweden, and France. Particularly in the fields of renewable energies, energy efficiency, sustainable agriculture, and circular economy, the Federal Republic leads startup activities in Europe, says Dominik Steinkühler, Partner at Vorwerk Ventures in Berlin.

"Cutting-edge research at technical universities such as RWTH (Rheinisch-Westfälische Technische Hochschule Aachen), KIT (Karlsruhe Institute of Technology), TUM (Technical University of Munich) and non-university institutions such as the Fraunhofer, Leibniz and Max Planck Institutes and the Jülich Research Centre are a unique starting point for innovation," says Steinkühler.

He is not the only investor to emphasise the quality of scientific research as a particular strength of Germany. A survey conducted by the European Investment Fund among European venture capital investors in October showed that they value Germany's "first-class ecosystem" and "academic excellence" in terms of technology, among other things.

The disastrous results of the latest Pisa test were not yet known at the time. In the international education study, German pupils achieved their worst results to date. Performance fell significantly, particularly in maths, reading and science.

Does this mean we need to worry about Germany as a centre for climate technology? Danijel Višević, Managing Partner at the Berlin-based climate tech investor World Fund, believes that the Pisa tests have at least revealed "problems of educational equality" in Germany. "Top university research at RWTH Aachen University, for example, is not getting worse as a result," says the former journalist and co-founder of the online magazine "Krautreporter".

According to Višević, many location factors are "excellent for climate tech, not only in Germany but throughout Europe, from research and the quality of start-ups to political ambitions in climate protection". This is also reflected in the fact that the continent has the most patent applications and company start-ups in the climate sector compared to the USA or China.

"There is only one hurdle we still have to overcome," says Višević. And that is "the lack of funding for start-ups, especially at the beginning of the critical growth phase." For their part, the USA, China and, most recently, the UK have invested billions to promote green tech as an industry of the future. "This is hard-hitting industrial policy to which the EU has not yet found a coherent response," says the investor.

The German budget crisis is, of course, anything but favourable here. In the wake of the Federal Constitutional Court's budget judgement, the Climate and Transformation Fund will be massively cut. Next year alone, 12.7 billion euros will be cut from the original plans. It is not yet entirely clear which programmes will be affected. However, Economics Minister Robert Habeck has confirmed that solar funding will also be affected.

This is "certainly not a good signal to the industry", says Višević. And it's not just the finances that have the potential to slow down the innovative strength of the local tech ecosystem.

This must be politically desirable. "To combat climate change, we need progress and international cooperation," says Steinkühler. "Both are characterised by open markets, immigration and acceptance of new technologies - all in complete contrast to what the AfD stands for."

The investor sees the party, which is now classified as "definitely right-wing extremist" in three German states, as a threat not only to democracy but also to "the leading role that Germany, as Europe's largest economy and a country of cutting-edge research, can play on the international stage in realising a climate-neutral future".

This year will again show how real this danger can become for the start-up scene. New state parliaments will be elected in Saxony, Thuringia and Brandenburg. It cannot be ruled out that the party will win in all three federal states.