Policy Context

Climate change, including climate finance, is a major priority for the Biden Administration: At the beginning of his administration, US President Joe Biden reentered the Paris Agreement. In April 2021, Biden convened a two-day Leaders’ Summit with heads of state and government from 40 nations, resulting in multiple commitments to tackle the climate crisis, including the US' new target for reducing emissions by 50-52% by 2030 compared to 2005 levels.

The Biden Administration has adopted a whole-of-government approach to climate, which includes both domestic and global work: The FY2025 budget requests US$3 billion in discretionary funding for both State and USAID. From a foreign assistance perspective, the Administration has focused on helping 'developing' economies adapt to the impacts of climate change. At the beginning of his term, President Biden appointed a first-ever Special Envoy on Climate, who holds cabinet-level rank. The US Treasury has also initiated climate related international programs.

USAID is a leading agency on international climate policy and programs: On Earth Day 2022 (April 21, 2022), USAID launched a new USAID Climate Strategy 2022-2030. USAID’s approach is “to reduce global greenhouse gas emissions, help partner countries build resilience to climate change, and improve our operations.” USAID also has an ENRM framework, which serves as an agency-wide guiding document to ensure USAID investments in all sectors consider their impact on the environment. In June 2023, USAID released its first progress review of its climate work.

ODA Spending

How much ODA does the US allocate to climate projects?

The US ranks 5^th among DAC donor countries in terms of its spending on projects with some degree of climate focus.

The US ranks 24^th among DAC donors to climate (10% of total bilateral allocable ODA; DAC average: 24%), relative to its total ODA spending. This increased from 3% in 2021.

How is US's climate ODA changing?

During the Trump administration, from 2017-2021, US funding for climate saw an annual decline of 12% on average, highlighting a steady decrease in commitment to climate measures during the former president’s tenure. In 2021, climate funding increased for the first time since 2016, growing 7% from US$933 million in 2020 to US$996 million in 2021. The Biden Administration has made climate a major priority, signaling a major shift in priorities for the US across all government departments and agencies, but congress has limited growth in this sector, keeping the overall funding level essentially flat through 2022.

How does the US allocate climate ODA?

Bilateral climate-related ODA

In 2022, US$1.8 billion of the US’ ODA for climate change went to climate change mitigation. Meanwhile, US$3.7 billion targeted adaptation. US$1.4 billion of the US’ funding for actions against climate change was channeled toward projects tagged with both markers.

Bilateral climate adaptation-related ODA

The US' bilateral ODA to climate adaptation decreased by 33% between 2017 and 2021, with principal funding experiencing a substantial decrease of 91%, in line with the overall cuts to climate finance during the Trump administration. Adaptation-related ODA started to increase slowly after 2018, mostly due to increases in significant funding for health and humanitarian assistance.

The largest share of the US' adaptation-related ODA went to the agriculture sector in 2021. Funding to this sector largely focuses on agricultural policy and administrative management, especially in partner countries based in sub-Saharan Africa. Nearly all adaptation-related ODA to health was significant funding, meaning that climate adaptation has been mainstreamed into health funding. Funding was mainly focused on STD control, including HIV/AIDS, reproductive health care and COVID-19 control. Environmental policy, administrative management, and biodiversity were prioritized within ODA for environment protection.

Despite it being the third-largest sector, environmental protection received the largest share of principal funding, amounting to US$24 million, which accounted for 37% of all principal adaptation-related ODA. More than half of ODA to WASH was principal funding, focused on large water supply and sanitation systems.

Multilateral Spending and Commitments

The US is a supporter of multilateral organizations working to fight climate change. For FY2024, funding for CTF stayed consistent with the FY2023 level of US$125 million. The FY2025 budget request included a US$25 million increase. GEF funding also remained level at US$150 million, and the FY2025 request was for level funding. No funding for the GCF was allocated for FY2024, although the State Department was permitted to contribute to the GCF. Biden’s FY2025 budget request included US$3 billion to support the GCF replenishment.

Below are recent US commitments to climate multilaterals, though not all these funds are counted as ODA.

Funding Outlook

What is the current government's outlook on climate ODA?

Overall, the Biden Administration has pushed for significant increases in climate finance, which have not always received congressional support. Although the IAB does not provide specific details, the FY2024 final appropriations provided bilateral climate funding of US$1.1 billion to State and USAID, which is a small cut from FY2023. The FY2025 budget request contains a request for US$3 billion in total discretionary bilateral funding. Other climate funding is built into other agency funding, including through the DFC, the US DFI.

Key Bodies