By: Olivia Clausen
International efforts to combat climate change hinge on the political will and financial commitments of the nations committed to addressing it. The Paris Agreement is a key tool to address climate change internationally. It is a legally binding international treaty that was enacted in November 2016, with a primary goal of limiting the global average temperature rise to well below 2°C compared with pre-industrial levels.
The heart of the Paris Agreement are the Nationally Determined Contributions (NDCs) which require each party to the Agreement to lay out how they will contribute to the outlined global temperature goals. NDCs include plans to meet specific greenhouse gas (GHG) emission targets, climate change adaptation measures, and implementation timelines. For developing nations, NDCs may include “conditional pledges” only intended to be achieved with international support. This requires the financial commitment of developed countries party to the Paris Agreement to contribute to developing countries’ climate action.
Concerned with damages to the US economy, President Trump signed an Executive Order in January that began the process of withdrawing the US from the Paris Agreement. The withdrawal will not take effect until one year after official notice is submitted, which means that January 27, 2026 will be the first day that the US is no longer bound to its commitments.
One prominent environmental economist suggested that the forthcoming withdrawal may be less consequential than climate activists fear, as the greater consequences will come in the form of downgrades to domestic policy and the “clear abdication of global leadership” by the US. This is in part because the responsibility of parties under the Paris Agreement is self-enforcing; there are no penalties for non-compliance. That said, the message sent by the decision to withdraw is of significant consequence. One prominent leader in the environmental advocacy sector commented that the US abandonment of the Paris Agreement harms its credibility as a partner in the global economy by causing political whiplash and leaving other nations to meet climate goals.
The US departure from the Paris Agreement is problematic in light of the fact that it is disproportionately responsible for historic CO2 emissions, which informs the idea that high emitters of CO₂ should compensate developing nations for damages. Article 9.1 of the Paris Agreement states that “developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention.” The imperative “shall” and plural subject “developed country Parties” suggest that the Article creates a binding, collective commitment to the goal, rather than individual, nation-based commitments. The financial mechanism that Article 9 uses is the Green Climate Fund (GCF) which is the “world’s largest dedicated multilateral climate fund and the main multilateral financing mechanism to support developing countries in achieving a reduction of their greenhouse gas emissions and an enhancement of their ability to respond to climate change.”
The day after President Trump’s Executive Order, the Center for American Progress noted that by halting payments to the Green Climate Fund, “the Trump administration deprived developing nations of critical resources to mitigate and adapt to climate change,” a decision that will hamper progress in vulnerable countries and exacerbate existing inequalities. Given that the Trump administration has canceled $4 billion in US pledges to the GCF, this leaves the question of who should make up for an incoming financial shortfall. This is an important gap to fill in order to help developing countries meet their goals of adapting to climate change and adopting clean energy.
Now that the US has canceled its pledges to the GCF, Germany is the largest contributor, with $2.16 billion in commitments. Germany has encouraged high-polluting, wealthy nations to step up in providing funds. Several EU states and Japan have made higher commitments to meet this. However, this has been met with some resistance from other countries, specifically from upper-middle income nations such as Saudi Arabia and China which remain in opposition to GCF contributions.
The GCF has plans to increase its portfolio of projects to $50 billion in 2030 but may be constrained if commitments falter. Meeting this goal is crucial to the GCF realizing their currently approved projects, from mainstreaming climate-smart agriculture practices in Senegal, to improving disaster-preparedness in Togo, to enhancing early flood warnings in Pakistan. In the face of climate change, it is in the international interest for these projects to occur to prepare for the destabilizing impacts of sea level rise, extreme weather events, and the related economic impacts of such events.
Joining Iran, Libya, and Yemen, the US will be the fourth nation not party to the Paris Agreement. As the US is the largest cumulative producer of GHGs in the course of history, 83% of Americans think that the country ought to do at least as much or more than others to reduce the effects of climate change. However, 59% of Americans believe that the US does not have a responsibility to provide financial assistance to developing nations to address climate change. These beliefs are inconsistent – the climate crisis is a global issue that requires participation from all states, and giving financial support to developing nations is a key tool to achieve this. There is a “pragmatic, political, and ethical imperative” for wealthy countries to help fix the crisis they contributed to, and this ought to be reflected in their commitment to the Paris Agreement and the GCF.
