Republicans have taken control of the House of Representatives, diminishing the chances of the US delivering on its climate finance pledges.
President Joe Biden promised $11.4 billion a year by 2024 to support climate action in developing countries, including an overdue $2bn to the Green Climate Fund (GCF).
But he got little through Congress in his first two years of office. A rightward swing in midterm elections, while smaller than predicted, will make it harder to appropriate funds for the climate agenda.
Following a closely fought campaign, the Republicans flipped the House with a narrow margin, enabling them to block new climate legislation. Democrats retain control of the Senate after winning contested seats in Arizona and Nevada.
Broken promise
The US has yet to deliver on a pledge to the GCF made eight years ago. In 2014, then-president Barack Obama promised the GCF $3bn but he handed over just $1bn before leaving office. His successor Donald Trump did not give any money to the fund and to date neither has Biden.
Biden said he would double US climate finance to developing countries from Obama-era levels to $11.4bn a year by 2024. With Republicans in control of the House, it is now looking unlikely he will meet that target.
Republicans generally favour a small state and don’t see climate as a priority for public spending. Wyoming Senator John Barrasso described Biden’s 2022 budget proposal as “another pipe dream of liberal activism and climate extremism. It spends too much, borrows too much, and taxes too much.”
With the Republicans in control of the House, “I don’t anticipate any sort of interest or support in international climate finance,” said Clarence Edwards, an environmental advocate with the non-profit Friends Committee on National Legislation.
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“It was a difficult road for climate finance, even with a Democratically controlled Congress,” he said. In March, US Congress approved a mere $1 billion in international climate finance for 2022, only $387 million more than the funding allocated during Trump’s presidency.
The US should be providing $45-50bn of finance every year under a “fair share” calculation factoring in the size of its economy and historical emissions, according to the Overseas Development Institute. Campaigners described the 2022 budget as a “betrayal”.
But all hope is not lost.
Democrats have other avenues to channel climate funds. Of the $11.4bn pledge, Biden has requested that Congress appropriates half ($5.3bn). The remainder is to come through various development agencies, such as the Development Finance Corporation and the Trade and Development Authority.
While Congress still appropriates funds to these agencies, this budget is not climate-specific. The individual organisations can set their own priorities.
“The administration needs to fight for as much dedicated climate finance as possible in the appropriations bill, but also pursue other avenues, including getting agencies such as the Development Finance Corporation and Export-Import Bank to invest more in climate,” Joe Thwaites, an international climate finance advocate at the Natural Resources Defense Council (NRDC), told Climate Home News.
International signals
A Republican controlled House could signal to other big emitters that they can stall climate progress, experts told Climate Home News.
“Laggards are going to feel little to no pressure to actually take action,” said Kate DeAngelis, international finance programme manager at Friends of the Earth Action. South Korea, for example, recently elected a Conservative government, and Japan has been pushing the expansion of LNG at home and abroad, she said.
“The elections are very interesting for Japan,” said Hanna Hakko, senior analyst at E3G. The US is Japan’s “most important ally”, therefore the Asian country strives to keep a similar ambition level, Hakko said. She added that Japan will be watching closely what kind of positions the US will take at the G7 next year, which Tokyo is hosting.
European governments may also “continue to delay or release policies with giant loopholes for gas,” said DeAngelis. The Netherlands, for example, said last week that it will continue to provide international finance for fossil fuel projects in 2023, deferring a promise made at Cop26.
Secured wins
Biden’s landmark climate bill, the Inflation Reduction Act (IRA), is expected to survive Republicans flipping the House, however.
The biggest federal climate spending package in US history, $370bn in total, will reduce the country’s greenhouse gas emissions by 42% between 2005 and 2030, according to analysis by Princeton University’s Repeat project.
“I’m not concerned about the unwinding of any recent policy wins that have happened in the US,” said Lindsey Baxter Griffith, federal policy officer for the Clean Air Task Force (CATF).
“Policymaking is difficult and undoing it is just as difficult,” she said. “We’re likely to see a lot of oversight, but with President Biden still in the White House, he’s not going to sign off on any legislation to undo those programmes.”
“There might have been an initial desire to try to roll back parts of the IRA, but the majority of the funds [in the IRA] will go to Republican controlled states,” agreed Edwards. “Once you pass something and people start seeing the benefits of the bill, it’s hard to [repeal it],” he said, adding that Republicans spent years trying to repeal Obamacare but weren’t able to.
Common ground
Although a Republican House is likely to push back on climate finance, there’s broad consensus on other climate issues, such as nuclear, carbon markets and drought resilience, said Edwards.
Climate and clean energy is one of the legislative areas that has received the most bipartisan support over the past two years, according to a report by CATF.
“There’s actually quite a lot to build on and there’s an opportunity next year for the Senate and House to cooperate on further energy legislation and industrial decarbonisation,” said Baxter Griffith.
By passing the IRA in his first term as president, Biden has secured his climate legacy, experts said.
“He’s done a tremendous amount,” said Edwards. “This administration has done much more than any other administrations and really laid the foundations to accelerate a low-carbon economy.”
“One of the major criticisms of Obama was that he didn’t do what he could when he had control and tried to get things done in the last hour,” said DeAngelis. “Biden learned from that. He was pushing his climate agenda, every chance he got.”
“The last two years have been monumental… there have been some incredible policy wins,” said Griffith Baxter. “But there’s still quite a lot of work this administration has to do” on clean air, methane and public health regulations, she said.