Formalizing another withdrawal from both climate and foreign aid programs, the Trump administration has informed world financial institutions that the United States is pulling out of the landmark International Climate Loss and Damage Fund.

Climate analysts have criticized the Treasury Department's decision to formally withdraw from the fund, which was designed as compensation for damage caused by polluting nations to poorer countries, particularly those most affected by extreme storms, heat and drought due to the burning of coal, oil and gas. A Treasury official stated in a letter last week that U.S. board members of the fund were resigning.

A beachfront home destroyed by the Palisades Fire is seen in Malibu, California, U.S., January 15, 2025. /VCG

When the fund was agreed upon in 2022, then-President Joe Biden pledged that the U.S., the world's largest historical carbon dioxide emitter, would contribute $17.5 million.

A dozen countries that have contributed less pollution – Australia, Austria, Denmark, France, Germany, Ireland, Italy, Norway, Spain, Sweden, the United Arab Emirates and the United Kingdom – along with the European Union, have pledged more than the U.S. The two largest pledges – $104 million each – came from Italy and France. As of January, the Loss and Damage Fund had received $741.42 million in pledges, according to the United Nations.

Poorer nations, often in the global south, had long framed the fund as a matter of environmental justice. It was an idea that the U.S. and many wealthy nations blocked until 2022, when they accepted its creation but insisted it was not reparations.

In its first 50 days, the Trump administration eliminated or cut funding for domestic environmental justice, foreign aid, climate change initiatives, and diversity, equity and inclusion programs. The president also initiated the one-year process to withdraw from the historic 2015 Paris Climate Agreement once again.

Earlier this month, the U.S. withdrew from a special climate agreement in which wealthy nations help poorer nations transition to cleaner energy.

(Cover: A truck drives along Interstate 335 during a winter storm near Luther, Oklahoma, U.S., February 18, 2025. /VCG)