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The U.S. final fiscal year 2022 (FY22) “omnibus” appropriations funding billThis is a huge disappointment in terms international investments to combat the climate crisis. The bill allocates more money than the previous year’s budget (under the previous administration) for international climate action, but by just one percent. The final funding allocation is far below what is required to make a significant difference in mobilizing the necessary climate action worldwide and supporting the most fragile countries to face the increasing climate impacts. This short-changed investment leaves America without the leadership it needs in this critical moment.
International climate finance is directly appropriated by the U.S. through the “State and Foreign Operations Program” (SFOPs) budget (See summary textFunding for bilateral programs (e.g. State Department and U.S. Agency for International Development), as well as multilateral climate action (e.g. via the global funds supporting the Paris Agreement). Additional climate investments are made as part of general U.S. government investments in U.S. agencies such as the International Development Finance Corporation, the Export-Import Bank and the Millennium Challenge Corporation (MCC) as well as through programs at other U.S. agencies (e.g. in their agency budgets). While these investments are crucial, directly appropriated climate financing in SFOPs is the core of U.S. investments to combat the climate crisis.
We are so short on the investment needed
The FY22 directly appropriated amount of international climate finance is $1 billion, significantly lower than President Biden’s request of $2.5 billion and what the House and Senate Democrats in Congress had proposed ($2.8 billion for the House and $3.1 billion for the Senate). This would be an increase by $387million over the previous fiscal year, but it is almost the same amount as Congress allocated at year’s end 2015 (1.05 billion in fiscal 2016, including the Green Climate Fund contribution). Since that time, climate action has become more urgent, more members of Congress have stressed the importance of climate action, addressing climate change has become the administration’s top tier priority, and the needed investment around the world has risen dramatically.
More than 85 faith-based, business, development, and environmental groupsWe urged congressional appropriators for at least $3.3 billion in U.S. direct support for international programs dealing with the climate crisis. This FY22 investment falls far short of that urgent request, with all accounts alarmingly low (see figures for a complete comparison).
- Bilateral assistance in renewable energy: $260 million (compared to: $354 million proposed by the diverse groups and in the President’s request)
- Sustainable landscapes bilateral assistance: $185 million (compared to: $232 million proposed by the diverse groups and in the President’s request)
- Bilateral assistance for adaptation: $270 million (compared to: $300 million proposed by the diverse groups and $222 million in the President’s request)
- Green Climate Fund: $0 direct allocation, but may be funded via other existing funding at the State Department and Treasury Department (compared to: $2 billion proposed by the diverse groups and $1.25 billion in the President’s request)
- Adaptation fund: $0 directly allocated (compared to: $100 million proposed by the diverse groups and $100 million in the President’s request for “multilateral adaptation funds”)
- Least Developed Countries Fund: $0 directly allotted(Compared to: $51 Million proposed by the diverse group)
- UN Framework Convention on Climate Change (UNFCCC) and Intergovernmental Panel on Climate Change (Intergovernmental Panel on Climate Change): $15 Million (compared to: $21 million proposed by the diverse groups and in the President’s request)
- Montreal Protocol: $52,000,000 (compared to: $64 million proposed by the diverse groups and in the President’s request)
Source: Joe Thwaites. WRI
U.S. Bilateral Climate Finance
International Climate Investments are in America’s Interest
These investments address a number of critical climate crisis needs. First, they help spur the kind of global action necessary to reduce emissions to keep 1.5°C within reach. We can’t drive the necessary climate action the world needs without bold domestic action by the U.S., but we also can’t solve the crisis if the U.S. doesn’t invest in helping developing countries speed up their emissions reduction strategies. Development countries can reduce their emissions by investing in renewable energy, sustainable landscapes (e.g. deforestation) and other areas. Every dollar that the U.S. invests helps to spur greater investments by other governments as well as the private sector.
Second, while the poorest countries have done little to combat climate change, they are already suffering the devastating effects of climate change. Adaptation investments help to reduce the impact of severe weather on infrastructure, agricultural productivity, public health, and other impacts of climate change on these countries. The world spent $170 billion on the top 10 climate events of 2021 – these are just the insured losses as the full tally is much higher. Global disaster response efforts show that You can save $7 by investing $1 today instead of spending it after a disaster..
They also create opportunities for entrepreneurs and American companies. The global clean-energy market in emerging countries is expected to be worth $23 trillion by 2030This creates a huge opportunity for American businesses that is largely untapped. Renewable energy investments create the conditions that allow companies to tap into this increasing demand for renewable energies. Smart investments in the United States can help unlock the trillions of dollars in private sector finance that are available to address the climate crisis.
Lastly, they provide a key cornerstone of America’s ability to rally the world to address this challenge. America’s actions are more important than its words – and money drives real action. Other countries contribute significantly to international climate efforts. The combined economy of the European Union countries is smaller than that of the United States. Yet, they contribute more than $24.5 million per year to public climate finance. If the United States wants to be able help lead global climate action, it must invest like its peers.
The U.S. The U.S. Needs to Do More
As it attempts to implement this budget, the Biden administration must place international climate funding at the top of its priorities. After all, climate change can’t be “an essential element of United States foreign policy and national security” – as Biden committed – if America’s investments don’t align with that priority. To find more investments in the United States this year, the administration should examine every corner of its budget.
Congress and President Biden must do a lot better next year. President Biden promised to mobilize $11.4 Billion in direct U.S. government investments by 2024So, what Congress and the President approve for fiscal year 2023 (October 1-2022 through September 30, 2023) will be decisive in proving that the U.S. is serious. It is not the time to take half-steps anymore, it is the time to be bold.
It isn’t too late to do better, but the clock is ticking.
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