Trump’s second term and the future of global climate finance
Trump’s second term poses a significant threat to global climate finance, particularly adaptation funding for vulnerable nations, including Bangladesh. The US's withdrawal from global agreements and mechanisms will deepen climate inequities, weaken international climate diplomacy, and stall adaptation progress
Donald Trump's second term as US President signals a pivotal shift in global climate policy, particularly in climate finance. His previous administration saw the rollback of environmental regulations, withdrawal from the Paris Agreement, and defunding of international climate initiatives.
With a renewed mandate, concerns over adaptation finance—critical for climate-vulnerable nations—have intensified. Trump's policies prioritise economic nationalism and fossil fuel expansion, with far-reaching consequences beyond US borders.
It is imperative to explore how his presidency could reshape climate finance, hinder global adaptation efforts, and impact vulnerable nations like Bangladesh.
The global climate landscape under Trump's second term
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Undermining the Paris Agreement and climate treaties: Trump's antagonism toward international climate agreements, particularly the Paris Agreement, is expected to persist. While his first term saw the US exit the accord, a second term could further erode global confidence in climate cooperation.
Even without a formal withdrawal, Trump's refusal to meet emission reduction targets may embolden other nations to weaken their commitments. The Global Goal on Adaptation (GGA) and other UN-led initiatives will likely suffer as the US withholds funding and obstructs progress at climate summits.
Dismantling US contributions to climate finance: During his previous administration, Trump halted contributions to the Green Climate Fund (GCF), which supports climate adaptation and mitigation in developing nations. Without US financial backing, the GCF faces significant shortfalls, jeopardising projects aimed at building climate resilience.
As a former major contributor, the US's withdrawal threatens global adaptation efforts. Trump's preference for market-driven climate solutions may lead to increased private-sector investment, but these will likely favour mitigation over adaptation, leaving vulnerable nations without essential support.
Widening climate inequity: The absence of US climate funding will deepen the divide between wealthy and developing nations. Countries least responsible for emissions will continue to bear the brunt of climate disasters with limited financial assistance. Rising sea levels, extreme weather events, and resource depletion will exacerbate crises in the Global South as adaptation measures remain underfunded.
Strained international relations and climate cooperation: Trump's climate policies will likely strain diplomatic relations, weakening global climate governance.
Without US leadership, multilateral cooperation on adaptation will decline. While the European Union, China, and other emerging economies may attempt to fill the gap, the lack of a unified global front will hinder effective climate action. Eroding trust in international climate negotiations may further delay funding mobilisation, increasing the vulnerability of frontline nations.
Bangladesh: A case study in adaptation finance deficiency
Coastal protection and disaster preparedness at risk: Bangladesh, one of the world's most climate-vulnerable nations, relies heavily on adaptation finance for initiatives such as coastal embankments and early warning systems. Many of these projects have historically benefitted from international funds, including US contributions.
Reduction in such funding will force Bangladesh to rely on domestic resources, which are often insufficient given competing developmental priorities. Millions in coastal regions will face heightened risks from cyclones and flooding.
Climate-induced migration and economic strain: With climate-induced displacement on the rise, Bangladesh is already witnessing mass migration from flood-prone areas. Without adequate adaptation support, internal migration will escalate, leading to overcrowded cities, economic hardship, and social instability. The lack of external
Financial assistance will also slow progress toward Sustainable Development Goals (SDGs), particularly in poverty alleviation and urban resilience.
Long-term consequences for global climate governance
Shift toward alternative climate finance sources: With the US retreating from climate finance, developing nations, including Bangladesh, will turn to alternative funding sources such as bilateral agreements with China, the European Union, and international financial institutions. While these may provide temporary relief, their funding models often differ from those of multilateral climate funds and may not fully align with the urgent adaptation needs of vulnerable nations.
The risk of a global climate finance rollback: The US's withdrawal from climate finance could set a dangerous precedent, encouraging other developed nations to scale back their commitments. This domino effect would further reduce adaptation funding, undermining global efforts to build climate resilience. Without sufficient financial support, vulnerable countries will struggle to implement long-term adaptation strategies, exacerbating instability and displacement.
Trump's second term poses a significant threat to global climate finance, particularly adaptation funding for vulnerable nations. The US's withdrawal from mechanisms like the GCF will deepen climate inequities, weaken international climate diplomacy, and stall adaptation progress.
While alternative funding sources may emerge, they are unlikely to fully compensate for lost US contributions. Global leaders must take decisive action to counterbalance Trump's regressive policies. Without renewed commitments, the most climate-vulnerable populations will face escalating crises, with dire consequences for future generations.
Lamia Mohsin is a young Bangladeshi development professional and researcher working on climate change, governance, and public policy.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
