In another climate and money withdrawal, US pulls out of climate damage compensation fund

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This article was published 10/03/2025 (571 days ago), so information in it may no longer be current.

Formalizing another withdrawal from both climate and foreign aid programs, the Trump administration has told world financial institutions that the U.S is pulling out of the landmark international climate Loss and Damage Fund.

Climate analysts Monday were critical of the Treasury Department’s decision to formally pull out from the fund designed as compensation for damage by polluting nations to poor countries especially hurt by the extreme storms, heat and drought caused by the burning of coal, oil and gas. A Treasury official said in a letter last week that the U. S. board members of the fund were resigning.

“Consistent with President Trump’s Executive Order on Putting America First in International Environmental Agreements, the United States has withdrawn from the Fund for Responding for Loss and Damage,” a Treasury spokesperson said in an email Monday. “We have informed all relevant parties of our decision.”

When the fund was agreed upon in 2022, then-President Joe Biden pledged that the U.S., the world’s biggest historic carbon dioxide emitter, would contribute $17.5 million.

“It’s a great shame to see the U.S. going back on its promises,” said Mohamed Adow, founder of Power Shift Africa and a veteran of United Nations climate negotiations. “This decision will result in great suffering for some of the poorest and most vulnerable people in the world. These people have contributed the least to the climate emergency they are now living through.”

A dozen countries that have polluted less — Australia, Austria, Denmark, France, Germany, Ireland, Italy, Norway, Spain, Sweden, the United Arab Emirates and the United Kingdom — and the European Union have pledged more than the U.S. The two biggest pledges — $104 million — came from Italy and France. As of January, the Loss and Damage Fund had $741.42 million in pledges, according to the United Nations.

“The Trump administration’s withdrawal from the Loss and Damage Fund is yet another cruel action that will hurt climate vulnerable lower income nations the most,” said Rachel Cleetus, policy director of the climate and energy program at the Union of Concerned Scientists. “The richest nation and the world’s biggest contributor to global heat-trapping emissions is choosing to punch down and walk away from its responsibility toward nations that have contributed the least to the climate crisis and yet are bearing an unjust burden from it.”

Poorer nations, often in the global south, had long framed the fund as one of environmental justice. It was an idea that the U.S. and many rich nations blocked until 2022, when they accepted the creation but insisted it was not reparations.

“Three long decades and we have finally delivered climate justice,” Seve Paeniu, the finance minister of Tuvalu, said when the UN climate negotiations established the fund. “We have finally responded to the call of hundreds of millions of people across the world to help them address loss and damage.”

In its first 50 days, the Trump administration has eliminated or cut funding for environmental justice domestically, foreign aid, climate change and diversity, equity and inclusion. The president also started the one-year process to once again pull out of the historic 2015 Paris climate agreement.

Earlier this month, the U.S. withdrew from a a special climate agreement in which rich nations help small poor nations switch to cleaner energy.

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