The USA withdraws from the Loss and Damage Fund, being the world’s largest historical emitter of greenhouse gases. The Loss and Damage Fund is a critical mechanism operationalized on January 1, 2025, to support vulnerable nations hit hardest by climate disasters.

Agreed upon at COP28 in Dubai in 2023 after decades of advocacy, the fund aims to provide financial compensation for irreversible climate impacts. The Loss and Damage Fund emerged after 30 years of campaigning by small island nations and developing countries, with a formal agreement at COP28 and operationalization at COP29 in Baku in 2024.

It addresses “loss and damage” — climate-induced losses like infrastructure damage, crop failure, and ecosystem collapse — disproportionately affecting poorer nations.

As the USA withdraws from Loss and Damage Fund this move, effective immediately as of March 7, 2025, aligns with President Donald Trump’s broader retreat from climate commitments, including the Paris Agreement, raising concerns about the future of climate justice for developing countries.

The USA’s exit from the fund’s board follows its earlier pledge of just $17.5 million, a fraction of the $661 million voluntarily committed by other developed nations by the end of COP28.

President Trump, sworn in January 2025, has consistently denied climate science, pulling the US from the Paris Agreement on his first day, signaling a pattern of disengagement.

Details of the Withdrawal

Rebbecca Lowler, Deputy Director at the Office of Climate and Environment has officially formalized abrupt departure of the US from the Loss and Damage Fund board in a letter to Jean-Christophe Donnellier, the fund’s Developed Country Co-Chair, underscoring a deliberate policy shift under the Trump administration.

Lowler’s letter, dated March 7, 2025, stated the withdrawal was “effective immediately,” with both the US Board Member and Alternate stepping down without replacements.

The decision comes just two months after the fund’s operational launch, catching many climate advocates off guard amid ongoing global disaster recovery efforts.

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Implications for Vulnerable Nations

The USA’s withdrawal from the Loss and Damage Fund threatens the financial lifeline for countries least responsible for climate change but most impacted by its consequences, amplifying calls for accountability from the global community.

The IPCC notes that developing nations suffer 15 times more victims from climate disasters than developed ones, relying on funds like this for survival. Nations like Kenya, facing floods and droughts, may see diminished aid, as voiced by Special Climate Envoy Ali Mohammad, who lamented the loss of multilateral spirit.

The fund depends on voluntary pledges, not binding commitments, making the US exit a symbolic and practical blow to its momentum.

Global Reactions and Next Steps

Climate experts and activists have condemned the USA’s withdrawal from the Loss and Damage Fund, urging other wealthy nations to fill the gap while holding the US accountable for its historical emissions.

Harjeet Singh of Satat Sampada Climate Foundation called it a “longstanding pattern of obstruction,” insisting the US must still contribute its fair share despite leaving the board.

Dr. Dhruba Purkayastha from CEEW emphasized that other OECD countries must now lead, given the moral and economic duty of large emitters.

With the US absent, the fund’s ambition may remain intact, but its resources could shrink, pressuring global leaders ahead of the UN climate summit in Brazil in November 2025.

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