A new programme to boost the climate resilience of drought-hit farmers in Iraq. Electricity installations that would give millions across Southern Africa access to clean energy. The conservation of critical ecosystems in Honduras to help local communities improve their livelihoods at home instead of needing to migrate to countries like the United States.
These and hundreds more climate programmes funded by the US government risk disappearing as an administration led by President Donald Trump and tech billionaire Elon Musk threatens to shutter the state aid agency, USAID, and slash overseas development assistance.
“I think this is the end of US [government] climate funding,” predicted Karen Mathiasen, a project director with the Center for Global Development, a Washington-based think-tank. In an interview with Climate Home, she described as “shocking” the speed and brazenness with which the government is attempting to dismantle its foreign aid arm.
Which countries have not ratified the Paris climate agreement?
Aid organisations and contractors have been grappling with an unprecedented crisis since, on his first day in office, Trump ordered a 90-day funding freeze during which a programme-by-programme review would be carried out.
As the world’s largest bilateral development assistance agency, USAID is a major provider of grant-based finance for climate action in the Global South. Its climate programmes – amounting to close to half a billion dollars in 2024 – help countries cut greenhouse gas emissions and protect their citizens from the escalating effects of global warming.
Secretary of State Marco Rubio – who is now in charge of USAID’s work – said last week that only projects that make “America safer, stronger or more prosperous” will survive the cull, without explaining which criteria would be used for the assessment.
‘Devastating’ consequences
The sudden move has thrown the development world into disarray, with organisations forced to halt their operations overnight and furlough or lay off staff without being able to obtain clear information or guidance from US officials.
A USAID project in Honduras strengthens the sustainability of coffee farming. Credit: USAID/Honduras Transforming Market
Speaking to Climate Home, aid workers involved in USAID-funded climate projects in the Global South painted a picture of bewilderment and confusion.
“We are no longer able to transfer funds to our local partners – and it will be really hard for them to manage costs,” explained one senior official at a global humanitarian group, underscoring the “devastating” consequences of the funding freeze for frontline organisations.
Working in conflict-afflicted regions, the aid group supports projects to build climate resilience that struggle to attract any financing outside of development money, said the official, adding “that has all gone away now”.
“For many programmes a 90-day pause is as good as a cancellation because you lose all momentum, you lose community connection, you lose the trust you built up with communities which is vital to success,” they added.
Separately, in Malawi, Climate Home has learned that all USAID-funded projects have been halted, with staff members being told to remain at home, just as the country was hit by deadly floods last week.
Climate aid powerhouse
Climate Home analysed USAID’s portfolio of climate projects before its website went offline late last week, soon after Trump-ally Musk, the world’s richest man, labelled the agency as “a criminal organisation”, without providing evidence – and called for its closure.
We spent the weekend feeding USAID into the wood chipper.
Could gone to some great parties.
Did that instead. https://t.co/0V35nacICW
— Elon Musk (@elonmusk) February 3, 2025
One of USAID’s single largest climate projects supports the large-scale roll-out of clean energy facilities across Southern Africa. With total budgeted funding of $84.5 million up to 2028, the programme aims to set up 3 million new electricity connections and avoid 14 million tonnes of planet-heating emissions – equivalent to the annual carbon footprint of Ivory Coast.
Other large US-backed renewable energy projects target Central Asia, Eastern Europe, Ecuador, Colombia and Bangladesh. The vast majority of these are implemented by profit-making American corporations that would be financially hit by any funding cuts.
Climate adaptation also features prominently in USAID’s portfolio. In the last year alone, the agency committed $22 million to boost the ability of farming communities in Iraq to deal with climate-related drought and $18.5 million to help the adoption of climate resilience measures in Palestine. Similar initiatives have been in place in dozens more countries across the Pacific, South Asia, sub-Saharan Africa and Latin America.
Many other USAID projects include climate-related activities – even if they are not explicitly labelled as such – especially in very fragile and conflict-affected regions.
“No future”
It is impossible to predict what will happen to USAID and its thousands of programmes in what is a fast-changing situation – although many staff are due to be placed on administrative leave at the end of this week amid rumours it will be be folded into the State Department. Any fundamental reforms of the agency, and especially its touted abolition, would legally need to be approved by the Republican-controlled Congress.
But, as far as climate action is concerned, some experts believe the writing is already on the wall.
Shell dodges paying compensation for sham carbon credits in China
Along with the wider funding freeze, on his January 20 inauguration day Trump explicitly ordered federal agencies to explain how they would “revoke or rescind” policies implemented to support his predecessor Joe Biden’s international climate finance plan.
“I see no future [for climate projects],” the humanitarian official said, speaking anonymously due to the sensitivity of the situation, adding that it remains to be seen whether some resilience-building activities could be woven into humanitarian assistance, which is more likely to be continued. “But anything that talks significantly, or even marginally, about climate change doesn’t have a future.”
CGD’s Mathiasen, who offered a similar view, said adaptation finance stands to suffer the most severe consequences from the aid pullback. “It will further create further challenges to an agenda that’s already horrendously underfunded, while needs are real and growing,” she added.
The outlook might be less gloomy for renewable energy projects which offer higher returns and could more easily tap other financing sources. For instance, in sub-Saharan Africa, development banks have committed more than $50 billion to an ambitious “Mission 300” initiative aiming to provide 300 million energy-poor people with electricity by 2030.
African governments opt for gas-run cars over EVs to drive down transport emissions
“It is hard to tell yet [what will happen],” said Saliem Fakir, executive director of the Africa Climate Foundation, “but generally large power projects rely on multiple funders – and we also have significant flows of funds from the Gulf States.”
Other major global powers, like China, might be looking to fill the gap as developing nations conclude they can no longer rely on US funding. “The US reputation will suffer as the US will be seen as an unreliable partner and a non-rational actor,” said Mathiasen. “For that reason, this is extraordinarily short-sighted”.
Climate finance goals harder to reach?
Faten Aggad, executive director of the African Future Policies Hub, told Climate Home that an “unprecedented” shift in international aid flows should prompt recipient countries to reevaluate their policies.
“It is a reminder that ODA [overseas development assistance] is not an economic development strategy,” she said. “Countries will need to work on structural solutions to fund their needs, and that includes looking beyond direct financial transfers from development partners.”
But, in the near-term, it will be difficult to quickly find alternative sources of finance for projects dependent on US grants, Aggad warned.
A US retreat from aid funding could also significantly affect the ability of developed countries to fulfill their promise of channelling at least $300 billion a year in climate finance to developing nations by 2035 – an agreement struck just over two months ago at COP29.
In 2022, US contributions accounted for 12% of developed countries’ climate finance through bilateral channels and multilateral climate funds under the previous $100-billion annual goal, according to analysis by US-based think-tank the Natural Resources Defense Council.
In comments made last week, Ani Dasgupta, president and CEO of the World Resources Institute, said “it is still too early to tell what US cuts will mean for reaching the $300-billion and $1.3-trillion [climate finance] goals by 2035 – but they may impact the pace of the scale-up.”
(Reporting by Matteo Civillini; additional reporting by Vivian Chime; editing by Megan Rowling)
The post “No future”: Climate projects face existential threat after Trump’s aid shutdown appeared first on Climate Home News.
“No future”: Climate projects face existential threat after Trump’s aid shutdown
June Rubis is a steering group committee member for the Cali Fund, from Sarawak in Malaysian Borneo.
At COP16 in Cali, governments made a significant commitment: at least half of the funding from the new Cali Fund should support the self-identified needs of Indigenous Peoples and local communities, including women and youth. It was a watershed moment for multilateral benefit-sharing.
The challenge now is to translate that commitment into access arrangements that recognise the different institutions, priorities and decision-making processes of Indigenous Peoples and local communities.
For generations, biodiversity and traditional Indigenous knowledge have provided significant value to companies who depend on nature’s genetic diversity to discover new drugs that fight diseases, create products that improve health, and grow crops resilient to extreme heat and flooding events. While some compounds are sampled directly from the source country, increasingly the digital blueprints are held in online public databases which are freely accessible to use for innovation and research.
Countries urged to ramp up “insufficient” nature policies at COP17
The Cali Fund was established at COP16 to encourage commercial users of Digital Sequence Information, or DSI, to share benefits arising from its use. Estimates suggest it could generate over $3.5 billion a year – a stark contrast to the modest $10,656 currently committed to the fund from just five SMEs, underlining how much progress must be made at COP17 over the next two weeks.
The COP16 decision that set up the fund offers two routes for money to reach Indigenous Peoples and local communities: through government authorities, and through direct payments to institutions identified by Indigenous Peoples and local communities themselves.
Varied ways of organising
Indigenous Peoples and local communities organise through a wide range of institutions. Some have national or regional organisations experienced in managing international grants. Others work through territorial organisations, customary institutions, community associations, cooperatives or networks. Some have professional finance teams and audited accounts; others have extensive experience governing territories, collective resources or conservation work without having been organised around international funding requirements.
For direct access, some questions are already apparent. Which institutions should be able to receive funds? How should they be identified? What fiduciary standards should apply? How should safeguards and accountability work where institutional capacities differ? What support may be needed where institutions have strong community mandates but less experience with international finance?
Comment: Protecting nature is a public duty, not a Wall Street profit opportunity
If access is designed mainly around institutions that already meet the expectations of large international finance mechanisms, early funding will tend to favour those already familiar to funders. They will gain further experience and become better positioned for future funding, while institutions with less administrative capacity may remain outside the system despite strong community mandates and long histories of stewardship.
These first decisions matter most, because they set the terms for everyone who follows.
The role of intermediaries requires care. Some Indigenous organisations may want a fiscal host to hold and manage funds on their behalf. Communities may choose to work through an NGO they trust. Government-facilitated arrangements may work well in particular national contexts.
What matters is the function an intermediary performs and the authority that comes with it. Providing administrative support is different from deciding which Indigenous organisations qualify, which priorities can receive support, or how success will be assessed. Direct access means communities keep that decision-making authority.
Decision-making power
The COP16 decision refers to institutions that Indigenous Peoples and local communities identify. But authority among Indigenous Peoples does not sit in one kind of body. It may sit with territorial organisations, customary institutions, community associations or combinations of these. Legal recognition and customary authority do not always align neatly.
Global deforestation slowed in 2025 but Brazil’s election could undo “fragile” gains
An important feature of the Cali Fund’s governance is that Indigenous Peoples and local communities participate as full members of the Steering Committee, rather than as observers. Seven Indigenous Peoples and local community representatives, one from each of the seven socio-cultural regions, participate in consensus-based decision-making alongside representatives of governments and UN entities. Six additional representatives from civil society, scientific institutions and the private sector participate as observers.
That representation carries responsibility. Institutional legitimacy, access and representation take different forms across the seven socio-cultural regions. Indigenous Peoples and local communities members therefore have an important role in bringing those differences into the Fund’s governance and in ensuring that arrangements developed for one context do not become the assumed model for everyone else.
Safeguards and clear responsibilities
COP17 can establish the core principles and direction, while allowing operational pathways to develop in ways that respond to different regional contexts. The decisions countries take in Yerevan will shape how that flexibility is realised in practice.
The choices made around access will influence which institutions are able to participate, which routes become established and which forms of authority are recognised within the funding architecture. The aim should be an architecture with enough structure to maintain confidence while allowing for different forms of Indigenous and community governance.
A credible direct-access pathway will need safeguards, financial oversight and clear responsibilities. This would give the 50% commitment a stronger institutional foundation.
The Cali Fund’s importance will ultimately depend not only on how much funding reaches Indigenous Peoples and local communities, but on whether they are able to determine how the money is accessed, governed and used. This requires access pathways that recognise their institutions, priorities and decision-making processes, rather than requiring them to conform to a single predetermined model.
The post COP17 must settle who decides how Cali Fund money is disbursed appeared first on Climate Home News.
COP17 must settle who decides how Cali Fund money is disbursed
The UK government has approved extraction at the Jackdaw gas field in the North Sea, despite acknowledging that this decision could make it harder for Britain to convince other countries to move away from fossil fuel production.
UK energy secretary Miatta Fahnbulleh approved the drilling on Wednesday after months of high-profile debate, fuelled in part by interventions from US President Donald Trump. She argued that the project would boost energy security in the wake of the Middle East fossil fuel crisis, protect hundreds of jobs and add £2.9 billion ($3.88bn) to the UK economy.
She said Jackdaw’s gas would be cleaner than imported gas and would not prevent the UK from meeting its legally-binding carbon targets and its goal of net zero by 2050. As the field is already licensed, she said extraction was consistent with the Labour Party’s 2024 manifesto promise not to issue any new oil and gas licenses.
The same morning, the government announced a new Energy Wealth Fund to reinvest oil and gas revenues in the climate transition. It will start with £2 billion ($2.67bn) from the government and be topped up over time with tax revenues from offshore oil and gas production.
Climate campaigners in the UK and abroad were quick to condemn the decision, while a leading legal expert told Climate Home News it goes against the advice of the International Court of Justice. Meanwhile, the government’s own documents reveal that it recognises the drilling could damage the UK’s reputation and its ability to push forward the global transition away from fossil fuels.
“Climate leadership” blow
The 92-page decision document says Fahnbulleh “acknowledges that international standing on climate is important and accepts that a decision to grant consent may not further the UK’s international climate leadership.”
It adds: “She acknowledges concerns about the potential implications for the UK’s credibility and influence – including the difficulty inherent in encouraging other states to move away from fossil fuel production while the UK continues, in a limited and transitional way, to draw on its own domestic resources.”
While noting that Jackdaw has not been issued with a new license – just permission to extract gas – the document says Fahnbulleh “accepts this does not fully resolve the underlying tension in the UK’s position” but “considers this alongside the substance of the UK’s wider record [on emissions reduction], which remains significant”.
It continues that she accepts these concerns are “legitimate” and weigh against approving gas extraction, but only gives this argument a “moderate negative weight” set against the benefits of gas production.
“Huge” wrong signal
In international climate talks, the UK has long supported the transition away from fossil fuels and is one of very few major oil and gas producers to ban new licenses. Across the North Sea, the Norwegian government continues to make offshore areas available for oil and gas exploration through annual licensing rounds.
Climate experts and campaigners shared the concern, acknowledged in the decision document, that approving Jackdaw could set a precedent for fossil fuel production elsewhere. Sam Fankhauser, professor of climate change economics at Oxford University, said the direct climate impact of Jackdaw is “much smaller than the debate around it would suggest” but the “wrong signal it sends, however, is huge”.
-
Carbon capture industry faces tough future, as UK raids green spending
Despite a spate of projects getting underway, the mood at an industry conference in London this week was low with government subsidies set to shrink -
Paris Agreement committee names three countries snubbing it over NDCs
More than 30 countries have failed to submit an NDC, but only three have repeatedly ignored the committee’s efforts to engage with them -
Turkish giant sponsoring COP31 cut climate goals then cashed in on oil boom
COP31 sponsors should be screened for “climate integrity”. Yet Koç Holding has become a top partner while its oil refiner runs flat out and its climate targets slip
Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change, said that while Jackdaw’s output will be very small, “it will signal to other fossil fuel producers that they too should carry on with business as usual, less than a month before the COP31”.
Kenyan campaigner Mohamed Adow, director of Power Shift Africa, called the decision “a serious blow to Britain’s international climate credibility” as “the UK cannot expect developing countries to move away from fossil fuels while giving the green light to new drilling in its own backyard”.
International Court of Justice
In July 2025, the International Court of Justice (ICJ) advised that government failure to take appropriate climate action “including through fossil fuel production” may amount to an internationally wrongful act.
The UK voted in favour of a United Nations resolution welcoming the advisory opinion. Yet, in its Jackdaw decision document, it notes that the ICJ opinion is not legally binding and says the UK does not accept the court’s opinion that the customary international law duty to prevent significant harm to the environment applies to climate change.
Fahnbulleh concludes that, although it will have “significant effect on the environment”, gas drilling in Jackdaw “would not lead to significant harm to the environment” – and so does not breach any duty to prevent such harm. Instead, the government document says the duty should be considered “as a matter of policy rather than legal obligation”.
Margaretha Wewerinke-Singh, who led Vanuatu’s legal team pushing for the ICJ’s advisory opinion, told Climate Home News that treating the duty as a matter of policy rather than legal obligation is “not how international law works”. “An advisory opinion is not a judgement,” she said, “but it states the law as it stands, and that law binds the UK whether or not it accepts it.”
“Even as a matter of policy,” she added, “the decision asks the wrong question: whether Jackdaw on its own would cause significant harm. The Court found that accumulated emissions are already causing significant harm. What matters is whether approving new production is consistent with the stringent due diligence the duty requires.”
Public support for decision
While the decision was criticised by climate campaigners and the opposition Green party, polling reported by Politico suggests that 55% of British adults support drilling at Jackdaw, with just 14% opposed. Even supporters of the UK’s net zero target back new drilling by more than two to one, the polling found.
Jackdaw is one of two North Sea oil and gas fields the government has been debating whether to extract more from for months. While Jackdaw is a small gas field, the other, Rosebank, is a much larger field that holds mostly oil.
Rosebank’s emissions are estimated to be around seven times higher than Jackdaw’s. Fahnbulleh told Sky News that Rosebank is “different” to Jackdaw because its oil would be exported, whereas Jackdaw’s gas will be used in the UK, adding that she will consider it “in its own right”.
The Guardian reported on Wednesday that UK officials say Fahnbulleh is minded to refuse approval for Rosebank. She has not yet taken a final decision on Rosebank, the newspaper said, but a ruling is expected later this year.
The post UK approves gas drilling despite admitting blow to “climate leadership” status appeared first on Climate Home News.
UK approves gas drilling despite admitting blow to “climate leadership” status