The Trump administration in the US has imposed tariffs on all imports from China, Mexico and Canada, as well as on steel, aluminium and cars from around the world.
In response, the US has been hit with retaliatory tariffs from major trading partners, including the EU.
US president Donald Trump has said he intends to launch a further round of reciprocal tariffs on 2 April, targeting a broader range of countries.
This escalating “trade war” is expected to slow global growth and has also triggered warnings of a US recession.
Global energy flows and efforts to tackle climate change are already being affected by the escalating trade tensions.
The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines.
At the same time, as high-emitting industries face higher costs, some commentators have suggested that tariffs could hamper US plans for fossil-fuel expansion.
And as clean technology becomes more expensive to manufacture in the US, other nations – particularly China – are likely to step up to fill in any gaps.
Carbon Brief has asked a range of researchers and policy experts what they think Trump’s tariffs could mean for global climate action and energy supplies.
These are their responses, first as sample quotes, then, below, in full:
- Dr Kyle Chan: “With US automakers struggling to compete, Chinese electric vehicle companies will likely gain a stronger position.”
- Elisabetta Cornago: “China may redirect its exports towards the relatively open EU market, challenging homegrown clean-tech industries at a time when the EU is trying to support and revitalise them.”
- Dr Bentley Allan and Dr Tim Sahay: “G7 and G20 countries are strengthening their domestic economies with deficit financing and directed investments into strategic sectors, such as green and digital sectors”
- Alex Muresianu: “A less productive US economy, which must pay higher prices for key inputs, is one that can spare fewer resources to address climate change.”
- Antoine Vagneur-Jones: “The administration’s fondness for data centres requires significant grid investment and yet the US relies on its neighbours for its supply of large power transformers.”
- Jimena Blanco: “The US is mainly or wholly import-reliant for around four-fifths of its identified 50 critical minerals, including from its partners Canada and Mexico.”
- Dr Simi Thambi: “An increase in trade protectionism is not good for climate action.”
- Robert Rozansky: “One upside to Trump’s trade war is that it might stymie his efforts to push US liquified natural gas (LNG) expansion into overdrive.”
- Chris Severson-Baker: “The Canadian oil and gas lobby…has been using this moment to make the case for more oil and gas production and infrastructure.”
- Anne-Sophie Corbeau: “Trump’s tariffs have already had an impact on LNG trade…China has not imported a single US LNG cargo since 6 February.”
- Avantika Goswami: “Tariffs – if imposed widely – may hurt the exports of countries like India, which nurture aspirations to mimic China’s role as an exporter of green goods.”
- Tu Le: “If manufacturers have to move multiple factories, that changes, reduces or eliminates what would have likely been more investment in research and development for clean energy vehicles.”
- Ellie Belton: “A more unpredictable US could create opportunities for the UK and EU to attract low-carbon investment and gain a competitive edge in the energy transition.”
- Eileen Torres Morales: “The effects of Trump’s tariffs on the global transition to green iron and steelmaking are still uncertain.”
- Dr Aurélien Saussay: “When faced with increased economic pressures from tariffs, countries could be more tempted to relax environmental standards to maintain competitiveness.”
Dr Kyle Chan
Postdoctoral researcher and author of High Capacity
Trump’s tariffs will likely have wide-ranging effects on China’s clean-tech industry and global climate progress. Higher tariffs on China will directly impact US imports of Chinese clean tech goods, such as lithium batteries, which reached $1.9bn in December 2024.
Chinese solar manufacturing firms will also be hit indirectly through tariffs on production sites in south-east Asia, which collectively supplies 80% of US solar imports. Meanwhile, China’s retaliation could disrupt US access to critical minerals for its own clean-tech industry. This includes graphite for battery anodes and rare earth metals for wind turbines.
The impact on China’s electric vehicle industry in particular will be consequential, albeit less direct. Chinese electric vehicle imports to the US, which were already minimal, will not be significantly affected by Trump’s new tariffs.
However, the broader disruption to automotive supply chains across Mexico and Canada – along with rising steel and aluminium costs – will weaken the ability of US automakers to transition to electric vehicles. This will benefit Chinese electric vehicle makers, which continue to innovate and drive down costs.
With US automakers struggling to compete, Chinese electric vehicle companies will likely gain a stronger position, not just in China’s domestic market, but globally as well.
Elisabetta Cornago
Senior research fellow, EU energy and climate policy
Centre for European Reform
The Trump administration is walking back on US climate commitments, both domestically by threatening to cut back Inflation Reduction Act (IRA) support for clean-tech industries and internationally, [by] withdrawing from the Paris Agreement. US tariffs can also affect climate action and the energy transition globally, hitting global value chains for clean technologies.
The Trump administration has levied tariffs on primary materials, such as steel and aluminium, on the EU as well as on China. This will increase manufacturing costs for US-based producers of goods that rely on imports of those materials, such as wind turbines and electric vehicles.
But, at the same time, because of interconnections in global value chains, the EU will also be impacted by US tariffs that are currently limited to China.
Tariffs on Chinese exports of solar panels, electric vehicles and batteries to the US, for example, will reinforce China’s overcapacity in manufacturing in all these sectors, relative to weak Chinese demand. As a consequence, China may redirect its exports towards the relatively open EU market, challenging homegrown clean tech industries at a time when the EU is trying to support and revitalise them.
Trump’s self-harming retreat on climate and tariffs has caused uncertainty for clean energy, industry and trade. There is a macroeconomic slowdown that could negatively impact the rising green investments of the last decade.
However, countries are strategic actors, not just passive victims of US trade policy. We are observing G7 and G20 countries take anticipatory steps.
First, they are strengthening their domestic economies with deficit financing and directed investments into strategic sectors, such as green and digital sectors. A few examples:
- The monumental shift in German fiscal policy will now enable investments in climate.
- The overhaul of EU’s fiscal rules and greater funding of the EU’s industrial deal with over €100bn to support clean manufacturing.
- Brazilian president Luiz Inácio Lula da Silva has unfurled Nova Industria Brasil to build green industrialisation.
- Mexican president Claudia Sheinbaum has announced and funded Plan Mexico for strategic investments.
Many nations are also diversifying their markets and multilateralist diplomacy. Targets of Trump tariff threats are involved in a flurry of trade and investment deals:
- Within Asia, there are negotiations to green the world’s largest trade bloc – the Regional Comprehensive Economic Partnership.
- Trade deals between Mexico-EU, EU-Brazil and Canada-EU are being revamped to allow more green trade.
- Countries such as Brazil and South Africa are leading diplomatic efforts through their presidencies of BRICS and G20 this year to articulate new trading and financial architecture that gives them the policy space to pursue green structural transformation to meet domestic and global climate goals.
Alex Muresianu
Senior policy analyst
Tax Foundation
At the most basic level, gains from trade are valuable. Historically, trade barriers have slowed the spread and adoption of new technology. The fight against climate change is just one example of the many economic challenges these tariffs will make more difficult.
Tariffs on important inputs make building more expensive and distort the US economy toward less productive activity. A less productive US economy, which must pay higher prices for key inputs, is one that can spare fewer resources to address climate change.
Advocates of Trump’s approach to trade often invoke competition with China as a justification. However, most of Trump’s tariffs are targeted at allied or friendly nations, such as Canada, Mexico and members of the EU. US policymakers are worried about losing an innovation race with China in areas like electric vehicles or other green technologies, but putting up barriers to other markets will make us less – not more – competitive in the long term.
Antoine Vagneur-Jones
Head of trade and supply chains
BloombergNEF
The tariffs jar with priorities that are – at least rhetorically – at the heart of the Trump presidency.
The administration’s fondness for data centres requires significant grid investment and yet the US relies on its neighbours for its supply of large power transformers. Expanding manufacturing is another apparent priority, but increasing the cost of inputs will crimp domestic industry.
And by hurting cross-border value chains and taxing imported crude, the tariffs could conceivably disadvantage traditional internal combustion engine vehicles more than their electrified equivalents.
Jimena Blanco
Chief analyst
Verisk Maplecroft
Against a background of tariffs and disrupted trading relationships, we are seeing a more protectionist stance towards critical minerals emerging, further complicating clean-tech supply chains.
Our research shows resource nationalism is accelerating. Among the emerging markets, 17 major critical mineral producers have seen a significant increase in risk in the past five years, including Chile and Peru – both key sources of lithium and copper.
Exact details of the new US tariff regime won’t be known until 2 April, but it is likely that the next batch of tariffs will be levied most heavily on countries with the largest trade imbalances. These countries represent the majority of Washington’s key global trade partners, meaning disruptions to supply chains – including in minerals essential for the energy transition – are increasingly likely.
The US is mainly or wholly import-reliant for around four-fifths of its identified 50 critical minerals, including from its US-Mexico-Canada Agreement (USMCA) partners Canada and Mexico. If Canada, for example, responds to the imposition of tariffs by the US with new export taxes, bans or restrictions on mineral exports, increasing costs or supply shortages are a prospect that US businesses will have to adapt to.
There is potential for US tariffs to slow the rollout of green policies if nations view renewables mandates or more stringent carbon regulation as adding additional burdens to their economy at a time of increasing trade friction. However, this could be counterbalanced somewhat by investments in low-carbon solutions such as carbon capture, utilisation and storage (CCUS) or hydrogen.
Dr Simi Thambi
Climate economist
FAIRR
An increase in trade protectionism is not good for climate action. Climate scientists have conceptualised this as a scenario of rising retaliatory tariffs – Shared Socioeconomic Pathway 3 (SSP3) – where challenges to mitigation and adaptation are high, making it unlikely for the world to limit temperature rise to 1.5C by the end of the century. This scenario could lead to up to four times more emissions than a sustainability-focused pathway with low challenges to mitigation and adaptation.
Mitigation is very challenging in this scenario because reducing emissions is more expensive, as investments needed to scale clean technologies are not prioritised. As a result, these technologies fail to penetrate well into the markets that need them most cost-effectively. For example, according to the International Energy Agency’s (IEA) 2024 electric vehicle outlook, electric vehicle sales in emerging markets remain very low. Lowering global emissions without greening the transport sector in developing economies would be highly challenging.
Adaptation also faces considerable challenges in SSP3, because one can expect deforestation and cropland expansion to rise in this scenario, as countries focus on their national ambitions. Extensive deforestation would reduce ecosystems and biodiversity, reducing their adaptive capacity.
Robert Rozansky
Global LNG analyst and project manager, Europe gas tracker
Global Energy Monitor
The Trump administration has gone all in on promoting US LNG under its “America first”, “energy dominance” agenda. As it seeks to boost new LNG production projects that are still on the drawing board, such as the Alaska LNG project touted in the State of the Union address, the US could further exacerbate a global overbuild of LNG infrastructure that threatens international climate targets. At the same time, the Trump administration’s trade war may make these same proposed LNG projects more difficult to build and finance.
Tariffs will raise the cost of raw materials, such as steel, the “backbone of LNG facilities”. If tariffs lead to economy-wide inflation, labour could become more expensive, too. The LNG industry is no stranger to the toll of inflation. For example, the cost of the under-construction Golden Pass LNG Terminal rose by $2bn after its main contractor declared bankruptcy in May citing pandemic-related cost inflation and delays.
If it becomes more expensive to build LNG export terminals in the US, financiers committed to projects under construction may struggle to recover their investments and those evaluating proposed facilities may be hesitant to invest.
The longer proposed projects sit without financial backers, the less likely it is they will get off the ground at all. New US LNG terminals are already set to face steep competition from an incoming wave of export projects abroad and increasingly cheap renewable power, as an alternative to gas.
Given that LNG may be roughly as bad for the climate as coal, if not worse, one upside to Trump’s trade war is that it might stymie his efforts to push US LNG expansion into overdrive.
Chris Severson-Baker
Executive director
Pembina Institute
In Canada, this is unfolding into a national debate about how best to strengthen our economic resilience and ensure long-term prosperity in the face of a hostile US.
There is a risk that what president Trump is doing could cause knee-jerk reactions here in Canada. The Canadian oil and gas lobby, for example, has been using this moment to make the case for more oil and gas production and infrastructure, to get more of its products to markets outside the US.
While we agree that Canada needs to diversify its trading partners, doubling down on oil and gas exports would not provide the long-term economic resiliency and energy security our country is seeking right now. We should look instead at Europe, where governments are aggressively decarbonising their economies, not only for climate reasons. They also understand that clean energy and new technologies are associated with less price volatility and more secure supplies, as well as health and affordability benefits for citizens.
The EU’s forthcoming carbon border adjustment mechanism (CBAM) will give an advantage to low-carbon exports of steel, aluminium and cement. These are all industries that Canada is well-placed to lead on, given our abundance of emissions-free electricity to power them. However, this can only happen if we retain our nationwide industrial carbon pricing system.
That is also why the next big nation-building project we foresee in Canada is not oil and gas infrastructure, but widespread electrification, supported by a buildout and modernisation of our electricity grid. This would help Canadians become more resilient, both to the economic impacts of trade disputes and the physical and economic impacts of climate change.
Anne-Sophie Corbeau
Global research scholar at the Center on Global Energy Policy
Columbia University
Trump’s tariffs have already had an impact on LNG trade. After the Trump administration imposed new tariffs on China in early February 2025, China retaliated by announcing, among other things, a 15% tariff on US LNG. China and the US are not too dependent on each other in LNG trade, with US LNG representing only 6% of China’s LNG supply in 2024. But China has not imported a single US LNG cargo since 6 February, as Chinese offtakers of US LNG are diverting their cargoes to other regions to avoid tariffs.
However, China and the US are respectively the largest LNG importer and exporter globally. Chinese buyers have contracted significant amounts of US LNG between 2021 and 2023. Should tariffs persist or even increase, US LNG will likely continue to be diverted to other countries, making the whole global LNG market less efficient. Meanwhile, Chinese buyers may become hesitant to contract more US LNG.
Another country that may be at risk if trade relations deteriorate is Mexico. Mexico’s energy system is very dependent on gas. It is also uniquely dependent on imports of US pipeline gas, which is cheaper than LNG imports. There are also a few Mexican LNG export projects at different stages of advancement that rely on US gas supplies and are therefore in competition with US-based LNG projects. Uncertainties over the bilateral relationship could become a source of risk for Mexico.
Avantika Goswami
Programme manager, climate change
Centre for Science and Environment
Donald Trump’s use of tariffs as an economic weapon is an attempt to regain dominance in the US’ trade relationships, for varying reasons – one being the US’ massive trade deficit.
From a climate perspective, tariffs need to be situated within a larger picture. They are likely to raise costs for general goods in the US – and green goods are not excluded from this calculus. This comes at a time when the US is lagging behind east and south-east Asia in the manufacturing of green technologies and has been slow in its domestic energy transition.
Tariffs may further raise the cost of the transition in the US. In tandem with attempts to expand oil and gas production in the domestic energy mix as Trump promises – and also any successful reindustrialisation efforts – this could see a rise in US domestic emissions. Meanwhile, fossil fuel exports will raise emissions elsewhere.
Tariffs – if imposed widely – may hurt the exports of countries like India, which nurture aspirations to mimic China’s role as an exporter of green goods. There has been an increase in the export of solar technology from India to the US, with India’s share of the country’s module imports rising from 2.5% in 2022 to 10.7% in 2024, amounting to approximately $2bn in 2023-24. For a country with aspirations in green manufacturing, tariffs on green goods could undermine this positive momentum for India.
This shift toward protectionism in the US does not necessarily spell the collapse of the global green goods market. Instead, it may serve to strengthen China’s role in the global green technology supply chain.
Lastly, the return to protectionism, particularly green protectionism, is an act of hypocrisy by nations like the US, which have spent years denouncing the same policies at the World Trade Organization when undertaken by developing countries.
Tu Le
Managing director
Sino Auto Insights
It is important to take the Trump administration’s individual actions in totality, while also keeping in the back of your mind that the US is the second largest passenger vehicle market in the world. That drives the need for legacy automakers to sell into this market.
The tariffs force companies to review their long-term manufacturing strategy. If they have to move multiple factories, that changes, reduces or eliminates what would have likely been more investment in research and development for clean energy vehicles, due to their limited capital.
The Trump administration is also poised to eliminate the more stringent Environmental Protection Agency (EPA) vehicle emissions standards that would have taken effect in 2027. If successful, that would substantially reduce the urgency for global original equipment manufacturers to launch products with more efficient powertrains. And it pushes out the need for oil companies in Russia, the Middle East and the US to alter or reduce their investments in clean energy initiatives.
Legacy manufacturers play a role in this as well, since their leadership years ago seemed to be so bullish in their ability to easily move over to clean energy vehicles. Their initial sales forecasts for this timeframe were never realistic and it put a spotlight on this being a left versus right issue, when it should have been a discussion on energy independence all along.
The US and EU governments are likely to push out their net-zero targets [for vehicles]. They were arbitrary to begin with. Now, with the Trump administration in place and European automakers whining about their inability to meet the more stringent requirements, they seem more than likely to be delayed past 2035.
Ellie Belton
Senior policy advisor – trade and climate
E3G
It is hard to imagine a scenario in which higher tariffs will benefit the global energy transition. Even if clean technologies are not directly targeted, the complex nature of international supply chains means that there will inevitably be knock-on effects, such as through increased costs for component parts like steel and aluminium.
Retaliatory tariffs against the US will also create a domino effect, distorting trade flows worldwide and altering countries’ comparative advantage in the clean economy. The biggest risk to climate action is the uncertainty this creates, which will damage investor confidence and distract governments from driving green ambition.
But a more unpredictable US could create opportunities for the UK and EU to attract low-carbon investment and gain a competitive edge in the energy transition. Continued efforts to provide public support for decarbonisation and seek mutual gains with cooperative trade partners will enable Europe to capitalise on the growing demand for renewable technologies globally.
Trade policy may have become a geopolitical game, but the urgent need to deliver a safe climate remains as critical as ever. The world is currently stuck in crisis response mode, but it is vital that we do not lose sight of the long-term direction of travel.
Eileen Torres Morales
Research associate
Stockholm Environment Institute
The effects of Trump’s tariffs on the global transition to green iron and steelmaking are still uncertain. It will take some time to see the impact, if any, such as increased steel prices in the short term, changed trade dynamics or long-term impacts on global green steel production.
The announcement of steel tariffs has forced exporting countries to rapidly reconsider how to stay competitive in the US market. The tariffs might benefit steel producers in the US, but a likely outcome is that both public and private consumers within the US will face rising steel prices regardless of whether the steel is green or not.
Trump’s administration’s interest in research and development of US-based green iron and steel production also remains unclear. It is not yet known if incentives for steel decarbonisation considered in the IRA will remain. For example, will the negotiations to advance green iron and steel production under the US Department of Energy’s industrial demonstrations programme continue or not?
Although the imposition of tariffs by the US may temporarily shift attention away from international competition and policies focused on heavy industry transition, this should not distract from progress in establishing a market for low-carbon products.
Policy instruments, such as the EU’s emissions trading system (ETS) and CBAM, should continue to be prioritised. Such tools can support the construction of a strong internal market for green steel, thus steering attention away from tariffs, back to driving innovation in low-carbon technology and emissions reductions that contribute to global climate action.
Dr Aurélien Saussay
Assistant professor at the Grantham Research Institute on Climate Change and the Environment
London School of Economics and Political Science
The looming threat of Trump’s tariffs is already reshaping energy policy decisions in concerning ways.
Perhaps most alarming, from a European standpoint, is European Commission president Ursula von der Leyen’s recent suggestion that Europe should increase its imports of US shale gas-derived LNG to appease the Trump administration and avoid tariffs. This move would seriously undermine the EU’s 2050 net-zero commitment.
This potential shift illustrates how trade tensions can indirectly sabotage climate progress. I’m particularly concerned by how these tariffs could undermine the viability of carbon-pricing schemes in major economies. When faced with increased economic pressures from tariffs, countries could be more tempted to relax environmental standards to maintain competitiveness.
The steel and aluminium sectors – already struggling to decarbonise – would be especially vulnerable. Many mills have begun investing in cleaner technologies, but tariffs could force them to prioritise cost-cutting over emissions reduction.
Furthermore, the uncertainty created by trade wars makes low-carbon investments riskier. Clean energy technologies, many of which are capital intensive, require stable policy environments to attract investments. The constant threat of retaliatory tariffs dampens investor confidence.
Perhaps most importantly, retaliatory tariffs on clean-energy technologies could significantly slow the global energy transition. This is particularly the case for tariffs targeting China, which is a leader in many of the key decarbonisation technologies. By increasing costs for solar panels, wind turbines and electric vehicles, these measures would hamper deployment rates precisely when acceleration is needed.
The post Experts: What do Trump’s tariffs mean for global climate action? appeared first on Carbon Brief.
Experts: What do Trump’s tariffs mean for global climate action?
Climate Change
DeBriefed 3 July 2026: US faces scorching Independence Day | Record ocean temperatures | Vietnam’s EV surge
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Heating up
NOT FREE FROM HEAT: “Dangerous, record-breaking” heat altered plans for 4 July celebrations across the US this weekend, reported the Associated Press. New York and Boston hit 100F (37.8C) on Thursday, said the newswire. CNBC reported that temperatures of up to 105F (40.5C) are forecast in central and eastern parts of the country, with “daily, monthly and all-time records possible”.
TEMPERATURES SOAR: Heat that hit western Europe last week spread east to “scorch” Germany, Hungary, Romania, Poland and others, said Bloomberg. Red warnings for extreme heat were issued in a number of nations, noted the outlet, adding that the heat “underscores how climate change is transforming summers in the world’s fastest-warming continent”. The Independent said last month was confirmed to be England’s hottest June on record.
HEAT DEATHS: June’s extreme temperatures caused more than 2,000 excess deaths in Spain and France, reported the Guardian. The countries are bracing for further heat that “could bring temperatures of 44C (111F) over the coming days”, said the newspaper. Deaths in France rose almost 30% at the heatwave “peak” on the week of 22 June, according to Le Monde. Last week’s conditions also led to around 480 excess deaths in the Netherlands, reported Reuters.
BOILING: Global ocean temperatures reached record levels for this time of year, reported NBC News, “fuelling fears of more dangerous heatwaves this summer and fanning concerns over the escalating global climate crisis”. Scientists told the Financial Times that this could lead the world towards “uncharted territory”. The newspaper said global average sea surface temperatures reached 20.96C on 21 June, exceeding June records for 2023 and 2024.
Around the world
- GOAL DROPPED: The World Bank will “abandon” its goal to devote 45% of annual lending resources to climate-related projects, reported Reuters. Carbon Brief explored what it could mean for global climate action.
- FIVE-YEAR PLAN: China plans to invest more than 20tn yuan ($2.9tn) in “key energy projects and new business models” over the next five years, according to International Energy Net.
- DRILLING: The Guardian said UK Labour politicians “urged” the likely next prime minister Andy Burnham to ignore “deluded” calls to develop the Rosebank oil field located in the Atlantic north of Scotland.
- PLASTIC TALKS: Countries and activists feared key issues could be sidelined at “critical” talks on a global treaty to curb plastic pollution in Kenya, said Climate Home News. A treaty could have “important implications” for climate change, reported Carbon Brief in 2024.
- CANADA PIPELINE: Canadian prime minister Mark Carney announced plans to build an oil pipeline to supply Asia with up to 1m barrels per day, reported the Financial Times. Earlier this week, Carney called the previous government’s climate plans “expensive” and “divisive”, said CBC News.
63
The number of UK newspaper editorials calling for more oil and gas extraction in the North Sea so far in 2026, according to Carbon Brief analysis.
Latest climate research
- Including emissions from permafrost thaw raises the likelihood of the Arctic becoming a net-carbon source by more than 50% at 2C of warming | Earth System Dynamics
- Net-zero scenarios relying less on carbon dioxide removals lead to fewer residual emissions, which offers greater health improvements for “non-white and low-income groups” in particular | Nature Climate Change
- Agricultural plots of land in sub-Saharan Africa owned by women face heat impacts 2-2.5 times higher than those owned by men | Nature Sustainability
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
Wind and solar were the world’s largest source of new energy in 2025, according to Carbon Brief analysis of the latest Energy Institute statistical review of world energy. Wind and solar also saw the fastest growth, up by 18% in 2025. Nevertheless, every source of energy – including coal, oil, gas, nuclear and hydro – also reached global all-time highs last year.
Spotlight
Vietnam’s EV surge
Carbon Brief explores the reasons behind soaring electric-vehicle sales in Vietnam.
Motorbikes are a constant fixture on streets across Vietnam. They pollute the air in cities and make crossing the road a feat of endurance.
But, increasingly, people are moving away from petrol-powered vehicles to save money and reduce air pollution.
Sales of electric motorbikes, scooters and mopeds more than doubled in Vietnam last year, according to a recent report from the International Energy Agency (IEA).
This identified that Vietnam has the largest electric vehicle (EV) market in south-east Asia.
Nearly one-in-five of the two-wheeled vehicles sold last year were electric, it noted, in a nation with 102 million people and 77m motorbikes.
This is “particularly impactful” given they are the main mode of transport in Vietnam, said Lam Pham, Asia energy analyst at thinktank Ember. He told Carbon Brief:
“Electrifying road transport is essential for Vietnam to achieve its net-zero target by 2050. Road transport accounted for around 86% of transport-sector emissions in 2022.”
The nation has just 6.8m cars, but this number is also climbing, partly due to EVs, with nearly 40% of new car sales being electric.
This is “above levels seen in most European countries”, noted the IEA. (The UK’s figure is around 30%.)
EV incentives
Fuel costs surged in south-east Asian countries earlier this year after the energy crisis caused by the US-Israel war on Iran.
This “accelerated” discussions from “why use EVs” to “why keep paying more for fuel”, said Dr Tham Nguyen, a lecturer at the Ho Chi Minh City campus of Australia’s Royal Melbourne Institute of Technology (RMIT) University, who has researched Vietnamese public attitudes to EVs.
But the surge is “not driven by fuel prices alone”, noted Pham.
Increased EV sales can also be attributed to a “convergence of affordability, convenience and sustainability”, Nguyen said:
“Vietnamese consumers buy EVs because they see real value with immediate personal benefits, such as cost savings and energy security, alongside long-term environmental gains.”
Government policies have also incentivised sales through registration fee exemptions and tax cuts for EVs.
Another factor is affordable EVs sold by Chinese companies and Vinfast, a Vietnamese manufacturer. The IEA report noted that Vietnam is the only country in south-east Asia with “sizeable” domestic production of accessible EVs.
Vinfast reported a 219% year-on-year increase in orders for electric motorbikes and e-bikes in the first quarter of 2026, but the company has yet to turn a profit.
Pham noted that “growing public awareness of air pollution” has also “dramatically strengthened” public support for EVs.
Future plans
Vietnam’s major cities also have plans to get drivers to go electric or turn to public transport.
The capital city Hanoi announced that it would ban fossil-fuel-powered motorbikes from a central zone this month, but this has been postponed until 2028.
Ho Chi Minh City, the nation’s largest city with more than 9.5 million people, intends to introduce low-emission zones and swap 400,000 petrol-powered motorbikes to electric by 2028.
The city’s green transport plans focus on metro lines, electric buses and e-bikes, explained RMIT associate professor Catherine Earl. She noted that walking and cycling are currently “not popular, accessible or safe for many residents in Ho Chi Minh City’s hot and humid climate”.
Looking ahead, Pham said Vietnam could focus on “purchase subsidies, financing schemes and adequate charging or battery-swapping infrastructure, to ensure lower-income riders, including delivery and ride-hailing drivers, are not negatively affected”.
Watch, read, listen
‘JUST 1%’ OF EMISSIONS: The Guardian debunked arguments that climate actions from smaller countries are “insignificant”.
DRILLING RISKS: Mongabay reported on the possible impacts oil drilling in the Amazon could have on a “little-known reef”.
HEATING UP: The BBC Climate Question podcast discussed the weather pattern El Niño and its links to climate change.
Coming up
- 7-10 July: AI for good global summit, Geneva, Switzerland
- 7-15 July: UN high-level political forum on sustainable development, New York
- 8-10 July: Ninth meeting of the board of the fund for responding to loss and damage, Manila, Philippines
Pick of the jobs
- Green Alliance, senior partnerships officer | Salary: £42,748-£47,346. Location: London
- World Vision, environment and climate action senior adviser | Salary: Unknown. Location: Kenya
- Nature Energy, interim associate or senior editor | Salary: Unknown. Location: London or Milan
- Climate Analytics, senior communications manager – climate policy (maternity cover) | Salary €60,605-€66,880. Location: Berlin
- Carbon Exchange, researcher | Salary: Unknown. Location: Hong Kong
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 3 July 2026: US faces scorching Independence Day | Record ocean temperatures | Vietnam’s EV surge appeared first on Carbon Brief.
The World Bank has abandoned a target for 45% of the funding it gives developing countries to be “climate finance”, following months of pressure from the Trump administration in the US.
However, a concerted effort by developed- and developing-country shareholders has seen the bank hold onto its “action plan” for tackling climate change.
The multilateral development bank (MDB) – which is headquartered in Washington DC – is the single largest provider of climate finance globally, distributing $39.2bn in 2025 alone, primarily as loans.
Amid widespread aid cuts by developed countries, the World Bank and other MDBs have previously pledged to significantly scale up their climate finance over the next decade.
Despite scrapping its central target, the bank says it will continue to support the demands of its “clients”, many of which have explicitly stated their need for climate-related investment.
Here, Carbon Brief looks at the likely impact of the World Bank’s policy shift and whether it is – as one expert puts it – “mostly a symbolic victory” for the US.
- How does the World Bank support climate action?
- Why has the World Bank abandoned its climate-finance target?
- Why is the World Bank important for international climate finance?
- How will these changes affect global climate action?
How does the World Bank support climate action?
The World Bank is the oldest and largest MDB. It is tasked by its 189 member governments – the bank’s shareholders – with supporting development projects around the world.
The US is the bank’s largest shareholder, followed, in order, by Japan, China, Germany, France and the UK.
Every year, the bank provides billions of dollars – predominantly as loans – to developing countries.
(One part of the World Bank, the International Development Association – IDA – specifically distributes grants to lower-income nations, as well as lower-interest loans.)
Through its financing, the World Bank also has an important role in “mobilising” private investments in developing countries.
In recent years, the bank has increasingly focused on helping developing countries to cut emissions and adapt their economies for climate change.
The World Bank provided $164bn in what it calls financing with climate “co-benefits” between 2020 and 2025.
The largest share of this funding – roughly one-fifth – went to clean energy and electricity access projects. Smaller shares went to areas such as public transport, water supply and sustainable farming.
As the map below shows, the largest recipients of the bank’s climate funds since 2020 have been emerging economies, such as Turkey ($10.3bn), India ($9bn) and Nigeria ($6.3bn).
Among the largest World Bank projects in recent years are two extensive programmes in India, totalling nearly $3bn, supporting renewables and green hydrogen.
Others include $1.7bn for a Pakistan hydropower project, $926m for Iraq’s railways and $803m to boost “green development” in Colombia.
Despite the bank’s major role in providing climate finance to developing countries, it has faced heavy scrutiny from climate advocates.
In particular, they have noted the dominance of loans that push developing countries further into debt. The World Bank has also been criticised for a lack of transparency around how it classifies projects as “climate-related”, as well as “over-reporting” of climate finance.
Why has the World Bank abandoned its climate-finance target?
When World Bank president Ajay Banga – nominated by former US president Joe Biden – took over the institution in 2023, there were widespread calls for MDB reform.
Many of the bank’s shareholders wanted to see billions more dollars being channelled to support climate action. Later that year, Banga announced that the bank would ensure that 45% of the bank’s funding was climate finance by 2025.
This replaced an existing target of 35% for climate finance between 2021 and 2025, which had been set out in the bank’s second climate change action plan (CCAP).
The CCAP is intended to “mainstream” climate action in the bank’s work. With it in place, the World Bank’s climate finance more than doubled from $17.2bn in 2020 to $39.2bn in 2025.
As the chart below shows, this meant the World Bank exceeded its 2025 goal, with climate-related projects making up a 48% share of total funding that year.
When Biden was replaced by Donald Trump as president in 2025, the US administration turned against international cooperation, including climate finance.
However, the US did not walk away from the World Bank, where it exerts considerable power as the largest shareholder.
With the CCAP due to expire in July 2026, the US has spent months pressuring the bank and its shareholders to weaken or abandon the plan altogether.
US Treasury secretary Scott Bessent issued a statement during the 2026 World Bank and International Monetary Fund (IMF) spring meetings in April 2026, in which he called for “jettisoning” the 45% climate-finance target. More broadly, he said:
“We welcome the coming expiration of the CCAP and…expect the bank to immediately shift its myopic focus on climate and financing volumes to one that emphasises high-quality, durable projects.”
This vision involves a push for the World Bank to finance more fossil-fuel projects, including drilling for new gas. (The bank has committed since 2019 to stop funding upstream oil and gas projects.)
The decision on whether to continue with the CCAP was negotiated behind closed doors by the board of directors – representing national shareholders. There were reports of “deep divides”.
A joint statement from 19 of the 25 directors last year affirmed the need for both a plan and a target. The US, Russia, Kuwait and Saudi Arabia all declined to sign up, while Japan and India abstained, according to Reuters.
There were reports of European nations championing a climate plan, bolstered by support from the developing countries that would stand to receive climate finance. The US call to drop the 45% target entirely was reportedly backed by Saudi Arabia and Russia.
Ultimately, the day before the CCAP was due to lapse, the World Bank announced what appeared to be a middle ground. It would drop both the 45% target and the 35% goal it had replaced, while also “extend[ing]” the CCAP.
UK development minister Jenny Chapman told a committee hearing in the House of Commons the next day that this marked a “compromise”. She said:
“It wasn’t clear we were going to get a CCAP at all and a bank without an action plan on climate is a problem for us – so that’s a good outcome.”
Supportive shareholders had been pushing for a one-year extension of the plan. While the World Bank did not initially define the length, Chapman confirmed on LinkedIn that the plan had, in fact, been extended “indefinitely”.
The bank said it would also engage an “independent evaluation group” to assess the CCAP, in line with a board request.
Gaia Larsen, director of climate finance at the World Resources Institute (WRI), tells Carbon Brief that this evaluation will likely be “relatively free from political ideology” and could be “focused on how to make the CCAP more effective”.
Why is the World Bank important for international climate finance?
Under the Paris Agreement, developed countries – including major World Bank shareholders in Europe and elsewhere – are obliged to provide climate finance for developing countries.
This includes a target of $300bn a year by 2035, which is expected to largely come from developed countries. One significant way these nations can contribute to this goal is via their support for MDBs, particularly the World Bank.
The World Bank has described itself as “by far the largest provider of climate finance to developing countries”. Each year, it oversees half of all climate finance from MDBs and far more than any single donor country.
Many developed countries have, therefore, enthusiastically backed the World Bank’s climate efforts, as well as a “bigger” role for MDBs in development more broadly. The bank can lend sums that far exceed the amount of new public finance that individual nations are willing to commit.
This is particularly significant, given many of these nations, including the UK, Germany and France, have announced large cuts to their aid budgets in recent years.
Carbon Brief analysis suggests that roughly a fifth of the international climate finance provided and “mobilised” by developed countries in recent years can be attributed to their World Bank contributions, as the chart below shows.
(This only accounts for the World Bank financing that can be linked to developed-country shares in the bank. Developing countries, such as China, also have significant shares, which are not included in the chart below.)
MDBs – including the World Bank – have committed to providing $120bn in climate finance to developing countries by 2030.
This was set to come from greater shareholder contributions, combined with a programme of reforms to free up capital.
If the World Bank continued to provide half of the MDB total, it would need to increase its climate finance by around 50%, from $39.2bn today to $60bn in 2030.
Therefore, experts see a “key” role for the World Bank in achieving not only the $300bn target, but also the more aspirational $1.3n target that countries agreed as part of the “new collective quantified goal” (NCQG) on climate finance at COP29 in 2024. This includes the private capital it could “unlock” through its lending.
Joe Thwaites, international climate finance director at Natural Resources Defense Council (NRDC), tells Carbon Brief that these “NCQG politics” are “quite important”. He says:
“The maths of the $300bn does not work if the MDBs pull back and so I think that’s why you’re seeing developed countries taking a stand.”
How will these changes affect global climate action?
To date, the World Bank has only released minimal details about its new climate plans. As such, experts say the impact on future climate finance remains uncertain.
Jon Sward, environment project manager at the Bretton Woods Project, tells Carbon Brief:
“They have said they are going to retain all the same processes about climate-finance reporting. So, of course, there is a world in which, actually, climate finance continues to increase like it has been.”
Some of the World Bank’s internal organisations will, in fact, keep their climate-finance goals for the time being. For example, the IDA’s largely grant-based funding retains a 45% target for its current round, which will last until 2028 – the year of the next US presidential election.
However, WRI’s Larsen tells Carbon Brief that the changes, from a bank that was previously a “champion for climate action”, remain significant:
“This reality, reinforced by the elimination of the 45% goal, means that it would not be surprising to see a reduction in climate investments.”
In a statement, the World Bank said its “work on climate is and will remain firmly client driven”, noting that it supports nations undertaking their Paris Agreement climate plans.
Therefore, its climate focus may come down to whether there is demand for climate action from “client” countries receiving finance.
At an April event in discussion with the climate sceptic Bjørn Lomborg, Bessent said that global financial institutions should focus on growth, characterising climate action as an “elite belief”.
The implication from the US Treasury secretary was that recipient countries are not interested in climate action. However, as reported by Devex, a group of World Bank shareholders representing nearly 100 developing countries, wrote a letter that appeared to push back against this framing.
This “G11+” group, led by Brazil and China, said the bank “must remain firmly client-driven”, noting that countries are “following nationally determined pathways toward climate action”. NRDC’s Thwaites tells Carbon Brief:
“It’s one thing for the Europeans to talk about climate…This was the client countries [100 developing countries] saying: ‘No, we want this.’”
Recent research by the ODI thinktank found that 79% of developing-country officials polled wanted to see MDB investment in solar projects, 54% wanted hydropower and 47% wanted wind power. Only 13% wanted investment in gas-power plants.
Rishikesh Ram Bhandary, a senior development researcher at Boston University, has stressed the need for an “enhanced CCAP”, which could be supported by the bank’s new independent evaluation. Among other things, he tells Carbon Brief:
“The bank needs to make a more convincing case about how climate change is being integrated into development priorities rather than competing with them.”
Thwaites says he is hopeful that the outcome is “mostly a symbolic victory for the US”.
However, he says major shareholders from Europe and elsewhere should make it clear to the bank that it is not “the only game in town” when it comes to climate finance. He says:
“If [the World Bank] are going to cave into one shareholder, when the vast majority of the other shareholders are supportive of continuing climate action, they can take their money elsewhere.”
The post Q&A: How will the World Bank’s abandoned finance goal affect climate action? appeared first on Carbon Brief.
Q&A: How will the World Bank’s abandoned finance goal affect climate action?
Rich Wilson is CEO of the Iswe Foundation and co-founder of the Global Citizens’ Assembly.
The numbers are stark. According to the 2026 Global Report on Food Crises, 266 million people across 47 countries experienced high levels of acute food insecurity last year, nearly double the figure recorded a decade ago.
Meanwhile, disruptions to oil, gas and fertiliser flows through the Strait of Hormuz drove a 46% month-on-month spike in urea prices early this year, sending agricultural price indices up 8% and raising the spectre of a global affordability crisis.
This is not a blip. It is a new baseline. The EAT-Lancet Commission concluded that food systems now account for roughly 30% of total greenhouse gas emissions and are the largest single contributor to the climate crisis. The science has been clear for years.
Now some of the solutions to the problem are becoming socially acceptable too.
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Earlier this year, people from more than 60 countries and territories, selected not by vested interest, but by lottery, spent seven weeks examining the evidence on food and climate for the latest Global Citizens’ Assembly. They heard from scientists, farmers and industry. They worked through 42 hours of structured deliberation, engaging with some difficult trade-offs.
They were not asked to endorse a predetermined conclusion. They were asked an open question: what changes, if any, should we make to how we grow, share and eat food, so that everyone has enough to nourish themselves while tackling the causes and impacts of climate change?
Phase down industrial animal farming
Their answer was unambiguous. They voted to protect forests. They voted to phase down industrial animal food production. They voted for supply chain reform and corporate accountability, explicitly rejecting the idea that the burden of change should fall on individual consumers. All 22 of their Calls to Action passed with over 85% support, a super-majority of randomly selected people from every region of the world, in agreement.
Consider what the assembly was actually being asked to decide. Industrial animal food production is the primary driver of tropical deforestation. Protecting more land as forest and ecosystem means less land available for the expansion of industrial production. That is a real trade-off, with real consequences for real livelihoods. Politicians have spent years avoiding it.
These randomly selected people looked at the evidence, deliberated across time zones and cultures, and chose the forests, with 64% in strong support and a further 20% in favour. People from livestock farming communities voted for change. Not because they were told to. Because deliberation led them there.
We estimate there have now been more than 7,000 citizen participation initiatives worldwide in the last decade. They have been organised because, as our 2025 report: People in the Lead demonstrated, people are now consistently and significantly ahead of politicians on issues ranging from climate to AI governance.
The people know best
What the research consistently shows is that ordinary people, given proper evidence and time, produce recommendations that are more effective and more aligned with public values than what emerges from elected legislatures. The gap in global governance is no longer primarily between science and the public. It is between citizens and their political leaders.
That gap matters for more than procedural reasons. When policy treats people as passive recipients rather than active participants, it leaves out the very actors whose behaviour, trust and consent the transition depends on. Institutions that speak only to other institutions, and negotiate only with state actors and industry lobbies, are missing out on the trust and energy of the people they are supposed to serve.
Governments, left to their own devices, are not moving fast enough to prove that argument wrong. At COP30 in Belém last November, countries failed to agree on a fossil fuel phaseout roadmap, and even full implementation of every submitted national climate plan still leaves the world on course for 2.3 to 2.8C of warming.
Citizens’ track at COP
But the Brazilian presidency grasped something important. Among the conference’s more significant outcomes was the formal launch of a Citizens’ Track within the UNFCCC process, a mechanism for connecting the global participation field to intergovernmental climate negotiations. Türkiye and Australia, who together hold the COP31 presidency in Antalya this November, now have the opportunity to strengthen and institutionalise what Brazil began.
In Guatemala, Indigenous women build climate resilience with old and new farming methods
The question before us is no longer whether citizens can contribute to solving these problems. Across the world, in local food networks, in community assemblies and in participatory planning processes, they already are, quietly generating more ambitious and more legitimate solutions than those emerging from formal diplomatic channels.
What is required now is the political courage to connect people to power. Not to consult citizens and file the results. Not to invite them to observe while the real decisions are made elsewhere. But to recognise the public as partners in perhaps the most consequential governance challenge of our time.
The post As food shocks spread, citizens are showing more leadership than governments appeared first on Climate Home News.
As food shocks spread, citizens are showing more leadership than governments
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