International Climate Finance Plan of the US

The US President recently announced the country’s new Finance Plan at the Leader’s Summit on Climate. The Summit was hosted by the USA.

About the Plan

• The US has set a new goal to cut its emissions by 50% to 52% as compared to 2005 levels.
• The US will double its climate funding by 2024. It is to triple its climate funding eventually.
• The United States Agency for International Development (USAID) is to release a new Climate Change Strategy in November 2021 at the COP26.
• The United States International Development Finance Corporation is to change its development strategy to include climate in its plan. It will prioritize climate mitigation and adaption. This is the first time the US is including climate in its development strategy.
• The Millennium Change corporation will focus on climate smart development and sustainable infrastructure. It aims to direct more than 50% of its funding towards climate-related investments.
• The US Treasury will direct the executive directors in multilateral development banks such as World Bank to ensure that they set ambitious climate finance targets.
• The plan will also focus on ending international investments in carbon-intensive fossil fuel-based energy products.

Background

The United States is the world’s second leading emitter after China. The country will have to contribute 800 billion USD as its share in the international climate finance.

Millennium Change corporation

It is a bilateral foreign US aid agency that was established in 2004. It provides financial aid to the countries with good economic growth through good policies.

US International Development Finance Corporation

The US International Development Finance Corporation is responsible for providing finances to private development projects in low-income and middle-income countries. It was formed in 2019.

Month: Current Affairs - April, 2021