Paris Agreement: U.S. Climate Finance Commitments (CRS Report for Congress)
Premium Purchase PDF for $24.95 (12 pages)
add to cart or
subscribe for unlimited access
Pro Premium subscribers have free access to our full library of CRS reports.
Subscribe today, or
request a demo to learn more.
Release Date |
June 19, 2017 |
Report Number |
R44870 |
Report Type |
Report |
Authors |
Richard K. Lattanzio |
Source Agency |
Congressional Research Service |
Summary:
The United States and other industrialized countries have committed to providing financial
assistance for global environmental initiatives, including climate change, through a variety of
multilateral agreements. The United Nations Framework Convention on Climate Change
(UNFCCC, 1992, U.S. Treaty Number: 102-38) was the first international treaty to acknowledge
and address human-driven climate change. Among other obligations, the Convention commits
higher-income parties (i.e., those listed in Annex II of the convention, which were members of the
Organization for Economic Cooperation and Development in 1992) to seek to mobilize financial
assistance to help lower-income countries meet certain obligations common to all parties.
International financial assistance may take many forms, from fiscal transfers to market
transactions. It may include grants, loans, loan guarantees, export credits, insurance products, and
private sector investment. It may be structured as official bilateral development assistance or as
contributions to multilateral development banks and other international financial institutions.
Over the past several decades, the United States has delivered financial and technical assistance
for climate change activities in the developing world through a variety of bilateral and
multilateral programs. U.S.-sponsored bilateral assistance has come through programs at the U.S.
Agency for International Development, the U.S. Department of State, the Millennium Challenge
Corporation, the Export-Import Bank, and the Overseas Private Investment Corporation, among
others. U.S.-sponsored multilateral assistance has come through contributions by the U.S.
Departments of State and the Treasury to environmental funds at various international financial
institutions and organizations such as the Global Environment Facility and the Green Climate
Fund, among others. Under the Barack Obama Administration, the U.S. government provided
about $1 billion annually for climate finance in the developing world. These funds accounted for
approximately 3% of the U.S. foreign operations budget and 0.1% of all discretionary spending.
In 2015, Parties to the UNFCCC in Paris, France, adopted the Paris Agreement (PA). The PA
builds upon the Convention and—for the first time—brings all nations into a common framework
to undertake efforts to combat climate change, adapt to its effects, and support developing
countries in their efforts. The PA also reiterates the obligation in the Convention for developed
country Parties, including the United States, to seek to mobilize financial support to assist
developing country Parties with climate change mitigation and adaptation efforts.
On June 1, 2017, President Donald Trump announced his intention to withdraw from the PA.
Further, the Administration’s FY2018 budget request, released on May 23, 2017, proposes to
“eliminate U.S. funding for the Green Climate Fund (GCF) in FY2018, in alignment with the
President’s promise to cease payments to the United Nations’ climate change programs.” These
actions may have several implications for the United States. Withdrawal may aid the domestic
budget process and may assist certain U.S. industries in the global marketplace, specifically
GHG-intensive fuels and technologies. However, withdrawal may also restrict the global
marketplace for U.S. exporters of low-emission technologies and may impede U.S. efforts in
natural disaster preparedness, national security, and international leadership.