Trump’s USAID Cuts Will Have Devastating Impact on Global Climate Finance: Analysis

President Donald Trump’s withdrawal of nearly all aid from the United States Agency for International Development (USAID) will significantly impact global climate finance to vulnerable nations, a new analysis by Carbon Brief has found.

The U.S. spent roughly $11 billion on foreign aid last year, with a similar amount slated for this year if plans by former President Joe Biden had been continued.

“The US retreat from its global climate finance commitments is a staggering blow to the chances of keeping global temperature rise to 1.5C [above preindustrial levels]. By abruptly axing nearly a tenth of the limited funds for climate protection in developing countries, it is effectively abandoning millions of communities who have done nothing to cause global heating but who are losing homes, livelihoods and lives because of it,” Anne Jellema, 350.org’s executive director, told The Guardian.

Roughly $8 of every $100 in aid to help developing countries manage extreme weather impacts and reduce their greenhouse gas emissions came from the U.S.

Trump has threatened to cancel nearly all USAID projects, with climate funding likely to be put on the “cutting block,” an expert told Carbon Brief.

U.S. climate finance from USAID reached almost $3 billion in 2023, the analysis said.

The Trump administration has also cancelled an additional $4 billion in funding from the U.S. for the United Nations Green Climate Fund.

The $300 billion climate finance goal agreed upon by nations in 2024 could face an “enormous gulf” if the U.S. stops providing and reporting any official climate finance, another expert said.

The U.S. is the fourth-largest international climate finance provider, but also the largest economy and biggest carbon dioxide emitter in the world. In other words, its wealth and climate change responsibility are disproportionate to its contributions to global climate finance.

Just 0.24 percent of the country’s gross national income (GNI) is given as aid to developing countries — the same as the Czech Republic, whose GNI is three times less.

The Biden administration’s significant increases in climate finance helped developed countries reach their $100 billion target in 2022.

“The way that the Biden administration was doing stuff and the way that [former president Barack] Obama before was doing stuff, [was to] start to weave a degree of climate sensitivity into everything… So, basically, a huge percentage of programmes [are] working on some aspect of climate,” Dr. Ed Carr, a Stockholm Environment Institute US center director who previously worked at USAID, told Carbon Brief.

In one of Trump’s many executive orders, a “pause” was put on U.S. foreign aid, 60 percent of which is handled by USAID, with the State Department overseeing most of the rest.

The approval of Congress is required for USAID funds to be repurposed, or for Trump to “close it down,” as he said he would like to do in a post on Truth Social.

Lawsuits and court orders have instructed the Trump administration to lift its pause, but it has instead stated an intention to do away with over 90 percent of USAID contracts, as well as $60 billion of U.S. foreign aid.

“This would have major implications for US climate finance,” Carbon Brief said.

USAID projects include a significant amount of grant-based funding, which many developing countries prefer to loans, seeing it as providing better support for climate adaptation.

“Now is the moment for wealthy nations to rise above politics and show real leadership. The world is watching, and the stakes have never been higher. We must act together to keep hope alive for a livable future,” Jellema told The Guardian.