Dive Brief:
- The United States has withdrawn from a climate coalition that pledged billions of dollars to help certain developing countries transition from coal to clean energy sources. The move marks the latest walk back from a climate deal since Donald Trump returned to the White House.
- Last week, the U.S. terminated its membership of the International Partners Group, a bloc of affluent countries — including Canada, Japan, the United Kingdom and the European Union — that committed to financially back energy transitions through the Just Energy Transition Partnership. The JETP initiative was launched at COP26 in Glasgow in 2021 with the aim of accelerating decarbonization in South Africa, Indonesia, Vietnam and Senegal by mobilizing sustainable financing.
- A spokesperson for South Africa confirmed the U.S. departure in a statement Thursday, noting that the move was due to the United States “engaging in a re-prioritisation exercise” under the new administration. The statement also said the withdrawal impacts associated financial pledges made by the U.S. and that “grant projects that were previously funded and in planning or implementation phases have been cancelled.”
Dive Insight:
The JETP initiative launched during COP26 with a $8.5 billion financing commitment to South Africa, which included grants, concessional loans, private investments and technical support to help the country pursue a clean energy transition. This was followed by a $20 billion commitment to Indonesia during 2022’s G20 Summit in Bali and a $15.5 billion pledge to Vietnam the same year.
The U.S. participated in each of these funding rounds, but has not made any financial commitments for Senegal’s energy transition, though other IPG members have. The IPG also includes France, Germany, Italy, Denmark and Norway.
So far, the U.S. has committed an amount of over $3 billion to Indonesia and Vietnam, mostly in the form of commercial loans, and over $1 billion to South Africa through JETP, according to Reuters.
Financial support provided through JETP was initially expected to prevent up to 1-1.5 gigatons of emissions from being released into the atmosphere over the course of the next two decades by supporting high-emitting countries like South Africa in phasing out coal and accelerating their transition to a “low emission, climate resilient economy.”
South Africa said in its March 6 statement that it and other international partners will “evaluate the implications” of the U.S. withdrawal from the program and it would remain committed to implementing international climate agreements, including the Paris Agreement.
The U.S. withdrawal from JETP aligns with an executive order Trump signed on his first day in office on Jan. 20. This order — labeled “Putting America First in International Environmental Agreements” — stated the country had previously joined initiatives that “do not reflect [its] values or [its] contributions to the pursuit of economic and environmental objectives,” and also withdrew the U.S. from the Paris Agreement for a second time. The order additionally revoked and rescinded the U.S. International Climate Finance plan.
