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German Vice Chancellor Robert Habeck has scrapped his plans to attend the UN Climate Change Conference in Dubai, citing a domestic budget crisis following a recent court decision.

The landmark ruling struck down the government's €60 billion ($65 billion) reallocation from pandemic borrowing to climate projects. Habeck's cancellation was made in consultation with Chancellor Olaf Scholz, with his presence deemed essential for budget talks in Berlin.

The fallout intensifies the budget crisis for Scholz's coalition government, currently negotiating with Finance Minister Christian Lindner. As COP28 unfolds without German representation, the urgency to resolve budget issues grows, with a political agreement needed before year-end.

Habeck remains optimistic about negotiations but acknowledges the challenging process.