A Lookback at The Biden Administration’s Development Agenda, Part III: Climate and Decarbonization

This is the third in a series of five blogs on the Biden administration’s global development agenda. The blogs are based on the Biden administration’s own account of its accomplishments as laid out in the U.S. Strategy on Global Development released by the White House in September 2024, which centers around five pillars:

1. Reduce Poverty through Inclusive and Sustainable Economic Growth and Quality Infrastructure Development
2. Invest in Health, Food Security, and Human Capital
3. Decarbonize the Economy and Increase Climate Resilience
4. Promote Democracy, Human Rights, and Governance and Address Fragility and Conflict
5. Respond to Humanitarian Needs

This blog focuses on the Biden administration’s record on pillar 3: Decarbonize the Economy and Increase Climate Resilience, and offers an assessment of how the next Trump administration could affect Biden’s legacy. Climate-related goals have been high on the Biden administration’s list of priorities, as evidenced by a multitude of bilateral, regional, and multilateral efforts to advance them, including sweeping legislation intended to engineer a major domestic shift towards renewable energy.

Given President-elect Trump’s public embrace of fossil fuels, the climate legacy is among the pillars most at risk. Indeed, readouts from the latest UNFCCC meetings (COP29) suggest that the US election outcome helped dampen ambition at the COP, and Trump’s campaign said he would withdraw from the Paris Climate Accords as he did in 2017, likely negating President’s Biden commitment to cut greenhouse gas emissions in half by 2030.

The Trump team may find that the Biden administration has injected enough momentum into the global climate agenda that it can slow— but not derail—the transition away from fossil fuels. However, this is cold comfort in a rapidly warming world.

U.S. Strategy on Global Development Pillar 3: Decarbonize the Economy and Increase Climate Resilience

President Biden signaled that his administration would make good on climate change promises when he rejoined the Paris Climate Accords on day one. This was followed by his pledge later that year to more than double annual climate finance commitments for developing countries to $11.4 billion and an announcement to halve US emissions by 2030. (The $11 billion is intended to support the COP15 commitments to mobilize $100 billion annually for developing countries—see this analysis by my CGD colleagues on how that’s going.)

The administration delivered climate financing through multiple channels, leading with the President’s Emergency Plan for Adaptation and Resilience (PREPARE), a government-wide approach to enhance climate resilience in developing countries. According to its action plan, PREPARE finances infrastructure, water, food security, and health, with the goal of reaching half a billion people by 2030. The plan notes that there will be metrics and measurement frameworks to assess progress, including the Global Climate Change Standard Indicators, but whether these have been developed or adopted is unclear as nothing is public. As a result, we are left with following the money as our best indicator of success.

As it turns out, tracking progress against Biden’s $11.4 billion annual spending target is not easy. In its 2023 report on the administration’s climate pledge, the State Department estimated that funding exceeded $9.5 billion, up from $5.8 billion in 2022, and in its latest fact sheet, the White House affirmed that the US is on track to provide over $11 billion in 2024. But these fact sheets do not include underlying commitments, making claims hard to verify. They also include requests to Congress that have not been met. For example, the administration made a $3 billion pledge to the Green Climate Fund (GCF) and submitted two consecutive budget requests to the World Bank for global challenges (including climate). Unfortunately, these were rebuffed by Congress, although the White House did identify $1 billion from an alternative funding source for the GCF.

Table 1. Climate-related funding requests for multilateral development banks

In $US millions

In addition to bilateral funding, the administration points to success in stretching multilateral development bank (MDB) balance sheets by as much as $200 billion over ten years as a critical avenue for increasing climate finance. While the additional financing can go toward any of the MDB program areas, there is no question that MDBs, especially the World Bank, responded to pressure from the US, among others, to accelerate climate funding. In a public release ahead of COP29, ten MDBs announced that their joint climate finance commitments reached $125 billion in 2023, more than doubling annual commitments since 2019. And, as discussed in the first blog in this series, the administration actively encouraged the MDBs to focus more intently on climate. As a result, the major MDBs have embedded climate objectives into their mandates and lending targets.

In reflecting on these gains, it is important to acknowledge that there was a degree of “do as I say, not as a I do,” built into the administration’s climate change foreign policy because of its domestic climate legacy, which is complex. Despite progress towards the administration’s emissions reduction goal, the pace is too slow to reach the 50 percent reduction target by 2030, and domestic oil and gas production continue to hit record levels. President Biden’s climate resilience strategy, discussed next, may have factored into these outcomes.

Friendshoring

During a visit to South Korea in 2022, Treasury Secretary Janet Yellen first made a case for supply chain resilience through “friendshoring,” arguing that COVID-19 and Russian aggression in Ukraine exposed key supply chain vulnerabilities. In subsequent remarks at the Atlantic Council, Yellen stressed that “we cannot allow countries to use their market position in key raw materials, technologies, or products to have the power to disrupt our economy or exercise unwanted geopolitical leverage.” National Security Advisor Jake Sullivan echoed these remarks, stating that “clean-energy supply chains are at risk of being weaponized in the same way as oil in the 1970s, or natural gas in Europe in 2022,” pointing explicitly to China’s mass subsidization of clean energy as a national security risk to the US.

The administration’s solution was to build domestic capacity in the US and in markets considered friendly to the US, with clean energy and critical minerals (including those needed to make electric vehicles) identified as priority categories. These goals were advanced through major legislative accomplishments, including the Inflation Reduction Act (IRA) and the CHIPS and Science Act designed to pump hundreds of billions into clean energy initiatives and spur domestic investment in semiconductors (a key input for nearly every digital device, including electric vehicles).

On the diplomatic front, the United States launched the Indo-Pacific Framework for Prosperity (IPEF) with fourteen founding nations to facilitate “a reliable supply of critical goods so that American companies and workers have the key inputs they need to operate without disruptions.” The IPEF has four pillars: 1) trade; 2) supply chains; 3) clean energy, decarbonization, and infrastructure; and 4) tax and anti-corruption. Negotiations stalled around the trade pillar, but member countries reached agreement on the other three. At the last G20 Leaders’ Meeting, President Biden also highlighted clean energy partnerships with Brazil, Kenya, and India as further evidence of success.

The US International Development Finance Corporation (DFC) was also tapped to help finance production of critical minerals involved in clean energy transition (e.g., lithium and nickel) in other countries. At the latest UN General Assembly meeting, the DFC announced that it had invested more than $1.8 billion across the priority areas and established a new network of governments and private investors to help drive investment to support vital mineral supply chains.

The diversification strategy included a punitive element too, with President Biden directing the US Trade Representative to impose tariffs on Chinese imports worth $18 billion in an array of strategic sectors, including electric vehicles, batteries, critical minerals, and solar cells, all heavily subsidized by the Chinese government. Both sides have recently escalated supply chain warfare, with the Biden administration restricting exports of goods and services related to semiconductor manufacturing and China retaliating by restricting exports of critical minerals, including for electric vehicle production, and launching an investigation of Nvidia—a US company and largest maker of computer chips—for antitrust violations.

Market diversification efforts take time to bear fruit, and for now the US economy remains heavily reliant on China, its third largest trading partner. Take critical minerals as an example: a 2022 Geological Survey on US sourcing of 50 critical minerals found that the US was fully import-dependent for 12 of them and more than 50 percent import dependent for 31 others. China was the leading producer of 26 of these minerals, a figure that has since increased to 29 according to a survey update in 2024.

Legacy assessment

The Biden administration has featured domestic and international initiatives to lower greenhouse gas emissions and build resilience to climate change as among its paramount achievements. This includes major domestic legislation, generous bilateral financial commitments and an invigorated MDB agenda around mitigation and resilience, as well as efforts to spur investments in nuclear and geothermal energy. While these represented unprecedented US action to combat climate change, the Biden administration’s legacy is complicated because it is impossible to decouple its decarbonization goals from its China policy. Put bluntly, the geopolitical impetus (diversifying away from China) was inconsistent with climate mitigation goals—at least in the near term—because it included blocking imports that could have accelerated decarbonization. In other words, this policy may have dampened the pace of US emissions reduction, which, according to the independent research organization Rhodium Group, is on track to fall by 35 percent at best by 2030, well short of the Biden administration’s 50 percent goal. Meanwhile, oil production in 2024 likely exceeded the record level set in 2023.

Figure 1. US Carbon Emissions

Biden’s climate legacy will also be affected by President-elect Trump’s efforts to undo his major initiatives. But several factors will limit what Trump can do. For example, the Trump administration can unilaterally end PREPARE, but will find resistance if it tries to undo climate action at the MDBs where there is strong buy-in from other shareholders. One scenario is that climate rhetoric from top MDB management may be toned down, but climate financing will continue to grow, consistent with the latest joint MDB commitment.

Efforts to unwind the IRA may also prove complicated, even with Republican majorities in both houses of Congress. President-elect Trump has repeatedly attacked the legislation, but most Republican-controlled states and districts are benefiting from the financial incentives embedded in the IRA, and a major rollback would trigger closures and job losses on a scale that most politicians seek to avoid. Last August, 14 Republican members wrote to House Speaker Mike Johnson cautioning against a hasty repeal, noting that “many U.S. companies are already using sector-wide energy tax credits – many of which have enjoyed bipartisan support historically - to make major investments in new U.S. energy infrastructure” and that repealing the IRA “would undermine private investments and stop development that is already ongoing….and create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.” This dynamic—coupled with state-led efforts to advance a climate agenda—may help limit the backsliding.

The incoming administration also seems likely to continue—and scale up—efforts to reduce reliance on China for renewable energy and minerals, where progress remains elusive. In reference to Biden-era initiatives to support this agenda, Commerce Secretary Gina Raimondo was quoted as saying “I’m truthfully not terribly worried that the Trump administration will undo all the great work we’ve done,” noting this is the direction “[the Trump administration was] going in” when President Biden took office. The upshot is that as a practical matter, the Trump administration may jettison the Biden administration’s decarbonization goals, but preserve policies aimed at climate resilience as part of a broader anti-China agenda, rather than a climate strategy.

Because it will take time for these complex dynamics to play out, it may be several years before Biden’s climate legacy can truly be assessed.