Key Impact Points:
- The U.S. has officially withdrawn from the Just Energy Transition Partnership (JETP), affecting climate projects in South Africa, Vietnam, and Indonesia.
- Immediate cancellation of previously planned U.S.-funded climate projects worth billions.
- The U.S. withdrawal raises concerns about financing for developing countries transitioning from coal to clean energy.
Withdrawal from Just Energy Transition Partnership
The United States has officially withdrawn from the Just Energy Transition Partnership (JETP), a critical financing initiative aimed at assisting countries like South Africa and Vietnam transition from coal-based energy to sustainable sources. This initiative, launched at COP26 in Glasgow in 2021, is supported by affluent countries including Canada, Japan, the United Kingdom, and the European Union.
The U.S. had pledged more than $4 billion, primarily in commercial loans, to South Africa, Indonesia, and Vietnam through JETP. Initially, the fund committed $8.5 billion specifically to South Africa, with support ranging from grants to technical assistance.
Impact and Reactions
Financial support from JETP was essential to enabling targeted countries to transition effectively to low-emission, climate-resilient economies. It was designed to expedite global decarbonization efforts launched during COP26.
In response to the U.S. exit, South Africa stated that “grant projects that were previously funded and in planning or implementation phases have been cancelled.”
The statement from South Africa on March 6 highlighted ongoing commitments to the Paris Agreement despite challenges posed by this withdrawal. The country will, along with other international partners, “evaluate the implications” of losing U.S. backing.
Exit from U.N. Climate Damage Fund
Simultaneously, the U.S. has exited the board of the UN’s climate damage fund designed to help vulnerable nations manage climate-related disasters. The exit, effective immediately, was confirmed in a letter from the U.S. to the fund’s co-chair, Jean-Christophe Donnellier, on March 4.
This climate damage fund, established during COP28 in 2023, addresses irreparable climate damage in vulnerable countries facing extreme weather and agricultural loss. The U.S. had committed funds to the initiative but now faces uncertainty around fulfilling its financial pledges.
Activist Harjeet Singh, director of global political strategy at the Climate Action Network, criticized the U.S. decision, emphasizing that vulnerable nations need support now more than ever:
“The United States bears significant responsibility as a major historic emitter and its withdrawal undermines global solidarity and climate justice.”
The U.S. Treasury Department has not yet commented on this immediate withdrawal.
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