By Otto Velting
Last Spring, over the course of many months of federal budget negotiations, Congress considered slashing a significant amount of international aid, with the United States Agency for International Development (USAID) climate and development programs under consideration for cuts.[1] As Congress enters another cycle of federal budget negotiations, lawmakers are once again considering cuts, and while that might come off as budgetary discipline, it’s just negligence in the scope of our country’s trajectory toward any progress in the climate space.
This is not just a foreign policy debate, as it has previously been framed as. More so, it is a United States environmental policy decision about how federal resources are allocated toward climate mitigation and adaptation on a global scale. Congress, with its authority over appropriations, determines whether the United States invests in climate mitigation and adaptation efforts abroad or pays the higher costs of environmental degradation later. Programs administered through USAID and contributions to funds like the Green Climate Fund are important tools of US climate policy.
Now that these cuts have largely been enacted, the United States has accepted the risk of losing its status as a global climate leader by practically handing China a clear opportunity to strengthen its foothold in the Global South, where our values, our businesses, and most importantly, our security interests are most vulnerable, as climate shocks in these regions have been linked to increased political instability and conflict risks that largely affect U.S. strategic interests.[2]
Key partners in these efforts include countries such as Indonesia, Kenya, and Bangladesh, which are not only highly climate-vulnerable but also strategically important due to their growing economies and regional influences.
For many decades, USAID has facilitated US-directed public-private collaboration to tackle climate change and build economic resilience in the most vulnerable yet opportune regions all over the world, by stabilizing local infrastructure and stabilizing agricultural systems, among other initiatives. From off-grid renewable energy in Southeast Asia to sustainable agriculture in sub-Saharan Africa, USAID has essentially unlocked billions in private capital while creating the foundation for long-term economic stability in regions facing high climate vulnerability and ongoing political and economic instability. Now these efforts may seem like charity as they certainly better systems for people and our planet, but above all, these initiatives are key to making sure America has a seat at the table of not just global climate leadership, but also geopolitical influence.
In 2023, USAID’s “Climate Ready” program essentially unlocked around $560 million USD in climate finance across 11 Pacific countries, with the intent of strengthening infrastructure and natural disaster preparedness.[3] With more than 800,000 people within the scope of this program, this kind of investment helped these countries build resilience to climate shocks before they turn into security emergencies, mitigation crises, or worse. With direct and early involvement through USAID led climate finance programs, it’s our allies, and most certainly not rivals, who are the ones helping build us these global solutions.
From a more environmental standpoint, these programs also directly reduce emissions growth and further strengthen climate adaptation capacity in regions that are typically the most vulnerable to climate change. According to the United Nations Environment Programme 2023 Adaptation Gap Report, developing countries will need hundreds of billions on an annual basis by 2030 to cope with rising climate impacts.[4] Cutting US contributions now simply shifts the burden elsewhere while also increasing the likelihood of more climate crises that will be more difficult to address in the coming years. With these budget cuts mostly now in place, the US risks walking away from this progress and leaving a vacuum behind.
In the meantime, China isn’t sitting still. As part of its Belt and Road Initiative, Beijing effectively allocated over $9 billion in 2023 alone toward green energy investments.[5] That growth is now largely focused on Southeast Asia, where China is rapidly investing in hydropower, electric vehicles, and battery supply chains, which is even more relevant as Western markets tighten their trade restrictions. China views climate finance as more than just business which is demonstrated by how in many of the countries where USAID is scaling back, China is already reshaping infrastructure and even governance structures to align with its motives. For example, in Indonesia, China has expanded investment in energy and transportation infrastructure under the Belt and Road Initiative, which built their influence over regulatory frameworks and local development priorities.[6]
Some US lawmakers have argued that this is about saving our taxpayer money, but when USAID backs global climate programs, it reduces financial and political risk by providing early stage funding and technical assistance, which eventually bring in private investment, typically from US-based companies. This not only reduces the cost of future climate disaster response efforts abroad, but it also further supports global stability in key sectors such as energy, infrastructure, and agriculture, which is key to economic growth and supply-chain security back home.
Just over two years ago at COP28, the US committed to a $3 billion contribution to the Green Climate Fund, which helps developing countries invest in clean energy and build resilience.[7] But it is hard to see how this promise can mean anything with Congress slashing the agency responsible for delivering results with this contribution. Analysts at the Center for Strategic and International Studies have similarly warned that inconsistent congressional funding undermines the effectiveness of US climate policy by weakening implementation capacity.[8]
Since the freeze, there has already been notable hesitation from investors with stalled climate resilience projects.[9] These delays increase the likelihood of more severe economic losses and humanitarian crises when climate shocks occur. With these cuts now mostly in place, the US risks not only missing its emission targets but also losing the trust of allies who expect it to lead in this space.
As the point of no return with our planet’s changing climate continues to creep up on us, and with the geopolitical balance actively shifting, this is a critical turning point. The question is no longer whether the United States should lead, but whether it can soon rebuild and effectively deploy the climate finance policy tools it has already begun to scale back. Given the consequences already beginning to unfold, Congress should reconsider these cuts and restore fully funded USAID climate initiatives.
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[1] Dara Kerr et al., “Trump pushes Congress to cut $9.4bn in funding for NPR, PBS and foreign aid,” The Guardian, June 4, 2025.
[2] Renée Cho, “Why Climate Change Is a National Security Risk,” Columbia Climate School, October 11, 2023.
[3] Sanjeshni Kumar, “USAID Climate Ready Project Mobilises US$562 Million for Pacific Island Countries’ Climate Resilience,” Pasifika News, September 15, 2023.
[4] United Nations Environment Programme, Adaptation Gap Report 2023: Underfinanced. Underprepared. Inadequate Investment and Planning on Climate Adaptation Leaves the World Exposed (Nairobi: UNEP, 2023).
[5] Meia Nouwens, “China’s Evolving Belt and Road Initiative in Southeast Asia,” International Institute for Strategic Studies, July 31, 2024.
[6] “The Belt and Road Initiative 2026: Indonesia,” CDR Essential Intelligence, October 30, 2025.
[7] Valerie Volcovici and Nandita Bose, “U.S. to announce $3 bln into Green Climate Fund – sources,” Reuters, December 2, 2023.
[8] Ray Cai, “Rethinking U.S. International Energy Finance,” Center for Strategic and International Studies, June 3, 2025.
[9] Céline Mulrean, “The USAID Funding Freeze Deals a Major Blow to Climate Finance,” Earth.Org, February 21, 2025.
Works Cited
Cai, Ray. “Rethinking U.S. International Energy Finance.” Center for Strategic and International Studies. June 3, 2025. https://www.csis.org/analysis/rethinking-us-international-energy-finance.
Cho, Renée. “Why Climate Change Is a National Security Risk.” Columbia Climate School. October 11, 2023. https://news.climate.columbia.edu/2023/10/11/why-climate-change-is-a-national-security-risk/.
Kerr, Dara, et al. “Trump pushes Congress to cut $9.4bn in funding for NPR, PBS and foreign aid.” The Guardian. June 4, 2025. https://www.theguardian.com/us-news/2025/jun/04/trump-congress-funding-cut-npr-pbs-usaid.
Kumar, Sanjeshni. “USAID Climate Ready Project Mobilises US$562 Million for Pacific Island Countries’ Climate Resilience.” Pasifika News. September 15, 2023. https://pasifika.news/2023/09/usaid-climate-ready-project-mobilises-us562-million-for-pacific-island-countries-climate-resilience/.
Mulrean, Céline. “The USAID Funding Freeze Deals a Major Blow to Climate Finance.” Earth.Org. February 21, 2025. https://earth.org/the-usaid-funding-freeze-deals-a-major-blow-to-climate-finance/.
Nouwens, Meia. “China’s Evolving Belt and Road Initiative in Southeast Asia.” International Institute for Strategic and International Studies. July 31, 2024. https://www.iiss.org/online-analysis/online-analysis/2024/07/chinas-evolving-belt-and-road-initiative-in-southeast-asia/.
“The Belt and Road Initiative 2026: Indonesia.” CDR Essential Intelligence. October 30, 2025. https://www.cdr-news.com/cdr-essential-intelligence/belt-and-road-initiative/indonesia/.
United Nations Environment Programme. Adaptation Gap Report 2023: Underfinanced. Underprepared. Inadequate Investment and Planning on Climate Adaptation Leaves the World Exposed. Nairobi: UNEP, 2023. https://www.unep.org/resources/adaptation-gap-report-2023.
Volcovici, Valerie, and Nandita Bose. “U.S. to announce $3 bln into Green Climate Fund – sources.” Reuters. December 2, 2023.https://www.reuters.com/sustainability/sustainable-finance-reporting/us-announce-3-bln-into-green-climate-fund-sources-familiar-with-matter-2023-12-02/.