Carbon Brief estimates that U.S. agency cuts and America's retreat from international agreements could wipe out a tenth of global climate finance
Drastic federal budget cuts and withdrawals from key international agreements could shrink global climate finance by 10%, all due to decisions by Donald Trump. These cuts put at risk the commitment made at COP29 in Baku to mobilize $300 billion for the world’s most climate-vulnerable nations.
During the Biden administration, the U.S. significantly increased its climate finance, reaching $11 billion per year in 2024 – about 8% of the global total. Over Biden’s four-year term, U.S. contributions to climate finance grew sevenfold, accounting for 21% of bilateral and multilateral funding in 2024.
Trump’s axe on climate finance
Trump – through Elon Musk’s mandate to slash federal spending across all sectors – has already taken steps to dismantle the backbone of U.S. contributions to climate finance, according to an analysis by Carbon Brief.
The single most significant cut is to USAID. The agency currently manages about one-third of U.S. climate finance, or $2.8 billion. It is also the primary provider of direct grants, which developing nations favor over loans that increase public debt.
Another major blow is the elimination of $4 billion previously allocated to the Green Climate Fund. In 2023 alone, Washington’s contribution to the Global Environment Facility (GEF) was $1 billion.
While smaller in scale, two other Trump decisions could deeply undermine trust in international climate diplomacy. The U.S. is withdrawing from both the Loss and Damage Fund and the Just Energy Transition Partnership.
The Loss and Damage Fund is essential for expanding climate finance to address destruction caused by extreme weather events, a long-standing demand from developing nations. The Just Energy Transition Partnership, meanwhile, is a multilateral initiative designed to help coal-dependent emerging economies transition to renewables.
