United States - Climate

 

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Explainer: Analysis is based on Rio markers for climate change mitigation and climate change adaption in the CRS. Each marker has 4 possible scores: principal, significant, screened, not targeted, and not screened. We count investments scored as principal as the narrow or lower bound estimate and funds scored as either principal or significant as the wider or upper-bound estimate.

Data presented is bilateral funding only. Refer to section (‘Multilateral climate finance’) below for discussion on the donor’s multilateral contributions to climate finance


 

Funding to and policy action for climate dwindled under former President Donald Trump 

In 2020, the US committed a total of US$897 million to official development assistance (ODA) for climate change mitigation and adaptation (see box). Since 2016, the last year in which the Obama Administration was in office, funding for climate has seen an annual decline of 12% on average, highlighting a steady decrease in commitment to climate measures throughout the tenure of former President Donald Trump. Despite the decline, due to its sheer volume of ODA in general, the US is the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee’s (DAC’s) seventh-largest funder of climate ODA. However, as a share of total bilateral allocable ODA spending, the US’ contribution to climate change ODA is negligible: it spends just 3% of total bilateral allocable ODA on climate change objectives (DAC average: 23%). It makes the US — the world’s largest donor to global development — the third-lowest DAC funder of climate change mitigation and adaptation in relative terms, ahead of only Portugal and Luxembourg. This figure has remained stable, between 3-5% of total bilateral allocable ODA, between 2016 - 2020. 

 


Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.

Each marker has three possible scores:

  1. Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
  2. Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
  3. Not targeted, meaning the project does not address climate change mitigation or adaptation.

Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.


 

The Trump Administration largely sought to roll back the climate change policies of its predecessor. In June 2017, Trump announced that the US – the world’s second-largest emitter of carbon dioxide (CO2) – would withdraw from the Paris Agreement (the first ever universal, legally binding global climate change agreement, which holds signatories accountable to keeping global temperatures below a 2°C increase above pre-industrial levels). This was a central promise of his presidential campaign. The US was the only country to pull out of the pact, which was signed by nearly 200 countries in 2015.  

Under President Joe Biden, climate change, including climate finance, is a major new priority. Mitigating climate change was a major element of Biden’s election campaign, which included a plan for a ‘clean energy revolution and environmental justice.’ Upon winning the US presidential election in November 2020, President Biden officially reentered the Paris Agreement. In April 2021, after assuming office, 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 will also focus on mobilizing finance for climate investments, including an intent to significantly increase the US contribution to global climate financing. The increase in funding will require Congressional approval. Biden’s FY2023 budget proposal includes US$128 million in allocations to the Global Environmental Facility (GEF), new investments in the Green Climate Fund (GCF; US$1.6 billion), and the Climate Technology Fund (US$550 million). 

Climate change is a politically divisive topic in the US and, until the Biden Administration, the US has had no overarching strategy on international climate change mitigation or adaptation. However, the US development implementation agency, the United States Agency for International Development (USAID), launched its new ‘USAID Climate Strategy 2022-2030’ on Earth Day (April 21, 2022). The strategy guides USAID’s approach “to reduce global greenhouse gas emissions, help partner countries build resilience to climate change, and improve our operations.” This is laid out through six targets, including: 

  • Partnering with countries to support activities that reduce, avoid, or sequester six billion metric tons of CO2-equivalent; 
  • Supporting the conservation, restoration, or management of 100 million hectares with a climate mitigation benefit; 
  • Enabling the improved climate resilience of 500 million people; 
  • Mobilizing US$150 billion in public and private finance for climate; 
  • Aligning our development portfolios with countries’ climate change mitigation and adaptation commitments in at least 80 countries by 2024; and 
  • Supporting partners to increase participation and leadership in climate action of Indigenous Peoples, local communities, women, youth, and other marginalized and/or underrepresented groups.  

USAID also has an Environmental and Natural Resource Management (ENRM) framework which serves as an agency-wide guiding document to ensure USAID investments in all sectors consider impact on the environment.  

The US Development Finance Corporation (DFC) announced that it will set its own climate investment goals to have both a net-zero investment portfolio by 2040 and a climate nexus in at least one-third of all its investments by 2023. It has also named, for the first time, a Chief Climate Officer.  

US focuses on adaptation; only 1% of funding goes to projects with climate change as a principal goal 

In 2020, 53% of the US’ ODA for climate change went to climate change mitigation.  Meanwhile, 70% targeted adaptation. As is apparent from the relative size of these percentages, there is also significant overlap between the two markers. This is because a project can target both adaptation and mitigation. 23% of the US’ funding for actions against climate change was channeled toward projects tagged with both markers in 2020 (for more information on the markers, see box).  

The US spent just 1% (US$363 million) of its funding on projects with climate change mitigation or adaptation as a principal goal, which is much lower than the DAC average of 9%. The amount the US spends on projects with climate change mitigation or adaptation as a significant goal is higher, at US$534 million, or 2%, of total allocable bilateral ODA spending (DAC average: 14%).  

In line with overall US development priorities, the greatest share of US ODA for climate change goals in 2020 went to ‘environmental protection’ (US$232 million, or 26%) and ‘agriculture’ (US$221 million, or 25%). A far lower share goes to ‘food and commodity assistance’ (US$107 million, or 12%) and ‘health’ (US$69 million, or 8%). Despite the declined allocations under the Trump Administration, the  Biden Administration’s climate plans signal a major shift in priorities for the US across all government departments and agencies. 

After steep cuts during the Trump era, Biden has proposed a major revitalization of multilateral climate finance 

The US is a supporter of multilateral organizations working to fight climate change, but not all contributions are ODA-eligible. Biden’s FY2023 budget request signals a shift toward reversing a deemphasis on climate policy under the Trump Administration, with a total of US$5.3 billion in funding requested for international climate programs. 

  • GEF Trust Fund: Biden’s FY2023 budget proposal would allocate US$150 million to support a first installment to the GEF’s eighth replenishment, covering 2022-2026; 
  • Green Climate Fund (GCF): Biden has budgeted US$1.6 billion for the GCF, which Congress did not fund in FY2022; 
  • United Nations Environment Programme (UNEP): In 2021, the US contributed US$7 million to the UNEP; and  
  • Climate Investment Funds (CIF): The US is the largest donor to the CIF since its inception in 2008, contributing US$2.0 billion of total US$10.3 billion donor contributions as of 2020. 

The State Department manages climate-change related programs while USAID leads on implementation  

The State Department manages or co-manages bilateral development programs and funding to international organizations, including those related to climate change mitigation or adaptation. Meanwhile, USAID leads implementation (see ‘Main Actors’). USAID has two policies – one related to action on global climate change mitigation and adaption and another to environmental protection – which provide benchmarks for achieving climate-related goals and guide programming on climate change objectives.  

The Biden Administration has adopted a ‘whole-of-government approach’ to climate both from a domestic and global perspective and has announced several specific initiatives to help low-income countries meet climate challenges. The Department of State and USAID will work with partner countries to help plan and meet their strategies for zero emissions and climate-resilient futures. Biden has also added a Special Envoy on Climate at a cabinet-level rank for the first time in history. 

Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.