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 2019, the US committed a total of US$931 million on official development assistance (ODA) for climate change mitigation and adaptation (see box). Since 2016, the last year which the Obama administration was in office, funding to climate has seen an annual decline of 14% 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) eighth-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 fourth-lowest DAC funder of climate change mitigation and adaptation in relative terms, ahead of only Greece, Hungary, and Portugal. This figure has remained stable between 3-5% of total bilateral allocable ODA between 2015 and 2019.

 


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 of 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 of 2020, President-elect Biden officially reentered the Paris Agreement. In April of 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 finances for climate investments, including an intent to significantly increase the US contribution to global climate financing. The increase in funding will require Congressional approval. Included in Biden’s FY2022 budget proposal is an increase in allocations to the Global Environmental Facility (GEF) to US$149 million (a 6% increase over FY2021 levels), and new investments in the Green Climate Fund (GCF; US$600 million), and the Climate Technology Fund (US$300 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), has a dedicated framework for action on global climate change adaption. According to its website, it is active in 30 countries across Africa, Asia, and Latin America with programs on climate change adaption, including access to and use of climate and weather data and tools, resilience to climate-change related risks, and programs to promote women’s empowerment in climate change efforts.  

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 impacts 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.

The US focuses on adaptation; only 2% of funding goes to projects with climate change as a principal goal

In 2019, 63% of the US’ ODA for climate change went to climate change mitigation.  Meanwhile, 61% 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. 24% of the US’ funding for actions against climate change was channeled toward projects tagged with both markers in 2018. (For more information on the markers, see box.)  

The US spent just 2% (US$483 million) of its funding on projects with climate change mitigation or adaptation as a principal goal. Despite being notably low against the DAC average of 7%, this figure is still greater than the amount the US spends on projects with climate change mitigation or adaptation as a significant goal – US$448 or another 2% of total allocable bilateral ODA spending (DAC average: 16%).  

In line with overall US development priorities, the greatest share of US ODA for climate change goals in 2019 went to the agricultural sector (US$322 or 35%) and environmental protection (US$265 million or 28%). A far lower share goes to food and commodity assistance (US$69 million or 7%) and energy (US$57 million, 6%), in line with the Trump administration’s pivot away from promoting the clean energy transition. Although specific details of the Biden administration’s climate plans are still under development, it is clear that there will be 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 counted as ODA. Biden’s FY2022 budget request was praised by climate advocates as a step in the right direction, with a total of US$2.5 billion in funding requested for international climate programs.

  • Global Environmental Facility (GEF) Trust Fund: In FY2020 and 2021, the US contributed US$140 million to the GEF Trust Fund. Biden’s FY2022 budget proposal would allocate US$150 million.
  • Green Climate Fund (GCF): The US pledged US$1.0 billion to the GCF at its replenishment conference in May of 2020 for the period of 2020-2023. After a US$3.0 billion pledge from Obama in 2014, only US$1.0 billion was delivered before Trump took office, meaning that the US still owes the GCF an outstanding US$2.0 billion. The Biden budget proposes to provide US$635 million for FY2022.
  • United Nations Environment Programme (UNEP): In 2020, the US contributed US$8 million to the UNEP.  
  • Climate Investment Funds (CIF): The US is the largest donor the CIF since its inception in 2008, contributing US$2.0 billion of total US$8.5 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 adaption and another to environmental protection – which guide its 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 the 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.