Since then, Elon Musk’s new Department of Government Efficiency has shut down the agency’s website, locked employees out of their email accounts, and closed the agency’s Washington office. “USAID is a criminal organization,” Musk posted on X on Sunday. “Time for it to die.” (The agency is codified in federal law, and court challenges are likely to argue that Musk’s actions are themselves illegal.)

While criticisms of Trump’s abrupt demolition of USAID have largely focused on global public health projects that have long enjoyed bipartisan support, the effort also threatens billions of dollars meant to combat climate change. USAID’s climate-related funding helps low-income countries build renewable energy and adapt to worsening natural disasters, as well as conserve carbon sinks and sensitive ecosystems. During Joe Biden’s administration, USAID accelerated its climate-focused efforts as part of an ambitious new initiative that was supposed to last through the end of the decade. That effort now appears to have come to an abrupt end as USAID contractors around the world prepare to abandon critical projects and lay off staff.

Secretary of State Marco Rubio, who has taken over USAID as acting director, has said that Musk’s abrupt shutdown is “not about getting rid of foreign aid.” But even if USAID eventually resumes operations to provide emergency humanitarian assistance such as famine support and HIV prevention, the agency is still likely to terminate all its climate-related work under the Trump administration. The result would be a blow to the landmark Paris climate agreement just as significant as Trump’s formal withdrawal of the United States from the international pact. By clawing back billions of dollars that Congress has already committed to the fight against global warming, the United States is poised to derail climate progress far beyond its own borders.

“This is taking a torch to development programs that the American people have paid for,” said Gillian Caldwell, who served as USAID’s chief climate officer under Biden. “Many commitments under the Paris Agreement are funding-contingent, and that’s very much in peril.”

The United States spends less than 1% of its federal budget on foreign aid, but that still makes the country the largest aid donor in the world by far. USAID distributes between US$40 billion and $60 billion per year – almost a quarter of all global humanitarian aid. While in recent years the largest shares of that aid have gone to Ukraine, Israel and Afghanistan, the agency also distributes billions of dollars to Latin America, sub-Saharan Africa and Southeast Asia, where it primarily helps promote food security, health and sanitation, and education efforts.

In 2022, Caldwell led the launch of a sweeping new “climate strategy” that sought to reposition USAID’s work over the next decade to account for climate shocks. The first part of this initiative was a country-by-country review of existing aid flows in standard areas like food and sanitation. USAID offices around the world began tweaking their operations to ensure that the projects they were funding would hold up as temperatures continue to rise. For example, the agency would ensure that water and sewer systems could handle bigger floods, or would plan to inoculate against diseases that might spread faster in warm weather. The effort was especially important in sectors like agriculture, which is both emissions-heavy and extremely vulnerable to the weather shocks that come with even small climactic shifts.

“You’re going to be having a lot more demands on humanitarian assistance when you’ve got extreme weather events,” Caldwell said. “The point was to make sure that every dollar we’re spending is sensible given the world we live in today.”

In addition to that review, the agency also increased its direct spending on renewable energy, conservation and climate adaptation. The agency added dozens of new countries to its climate aid portfolio under Biden’s tenure, expanding in Southeast Asia and western Africa. USAID work has had a far greater effect on the climate fight than its raw spending, which totalled around US$600 million on climate efforts in 2023, would indicate. That’s because the agency’s support has also mobilized billions of dollars from the private sector, attracting investment from renewable-energy developers and insurance companies that offer drought and flood coverage to vulnerable areas abroad.

USAID’s renewable-energy efforts may be some of the most resilient to Trump’s shock attack, because they don’t rely on the agency’s continued involvement. USAID has helped several countries design and hold renewable-energy auctions, wherein private companies bid for the right to build new power facilities at low prices. These auctions save countries money and make it easier for them to attract private capital. In the Philippines, two USAID-sponsored auctions generated almost US$7 billion in investment to build 5.4 gigawatts of solar and wind energy, enough to power millions of homes – without further USAID support.

The agency’s spending on landscape conservation is less secure. That funding prevents development on sensitive natural environments like rainforests by paying nearby residents to seek livelihoods other than the logging and grazing that could unleash massive emissions from the carbon stored in the forests. If USAID collapses, that aid will dry up, jeopardizing millions of acres of climate-friendly land.

The largest portion of the USAID’s climate-related spending goes toward disaster resilience, which doesn’t attract much investment from banks and private companies, making government support crucial. In the case of Zimbabwe, for instance, the agency funds dozens of projects a year that are intended to make the country’s farmers more resilient to drought and flooding. (This is in addition to public health and AIDS relief provided to the country, which together account for the majority of its USAID funding.)

One of the largest disaster relief programs in Zimbabwe, a broad-based initiative to help smallholder farmers, has increased water stability for tens of thousands of households by helping them build small rain catchment systems and restore degraded soils. USAID has been funding the project to the tune of about $12 million annually since 2020, and the program was slated to continue for the next three years.

Zimbabwe’s minister for climate and the environment, Washington Zhakata, said that a shutoff of USAID funding will make it nearly impossible for the country to meet its commitments to the Paris Agreement. The country has promised not only to develop renewable energy, but also to spend huge amounts of money on drought and flood protections. It has developed a nationwide adaptation plan on the premise that future funding would be provided – and provided in large part by the countries that are responsible for the most carbon emissions historically, like the United States.

“With limited and reduced resources, as a result of the funding withdrawal, meeting our compliance will be an uphill task,” Zhakata told Grist. “The created finance gap will see developing countries have to live with minimum resources and also to squeeze from domestic sources.”

At times, USAID has faced criticism for inefficient spending and unclear results – including for its past climate spending. The agency’s inspector general released a report last summer that criticized USAID’s previous climate initiatives for having murky data, saying that “weaknesses in the agency’s processes for awarding funds, managing performance, and communicating climate change information could impede successful implementation.”

This article originally appeared in Grist at https://grist.org/politics/usaid-elon-musk-trump-climate/. It has been edited to conform with Corporate Knights style. Grist is a non-profit, independent media organization dedicated to telling stories of climate solutions and a just future. 

The post Trump’s efforts to shut down USAID will have major implications for climate appeared first on Corporate Knights.

On Tuesday, after a ferocious Santa Ana windstorm blew through Southern California, a severe brush fire broke out in the wealthy Pacific Palisades neighbourhood of Los Angeles, burning 1,000 structures and forcing tens of thousands of residents to evacuate as of Wednesday afternoon. Another large brush fire broke out near Pasadena around the same time, killing at least two people. Together the two blazes threatened some of the most valuable homes and businesses in the United States. The damage from the Palisades Fire alone could exceed US$10 billion, according to a preliminary estimate from JPMorgan. [Editor’s note: updated estimates now put the insured losses as high as US$40 billion.

If this estimate holds true, it will test insurers’ commitment to a market that has been teetering on the verge of collapse for the better part of a decade now. Over the past five years, California has become a poster child for what climate-fuelled weather disasters can do to a state’s home insurance market. Following a rash of historic wildfires in 2017 and 2018, insurance companies have fled the state, dropped tens of thousands of customers in flammable areas and raised prices by double-digit percentages.

A requirement to expand insurance coverage

Until recently, elected officials have taken few major steps to address the crisis. But late last month, after more than a year of drafting, California’s insurance commissioner unveiled a set of reforms that he claimed will bring companies back into the fold as they take effect this year.

“This is a historic moment for California,” said Ricardo Lara, the state’s insurance commissioner, when he revealed the rules in December. “With input from thousands of residents throughout California, this reform balances protecting consumers with the need to strengthen our market against climate risks.”

The rules come after months of debate among state insurance officials, lawmakers, insurance companies and consumer advocates. The biggest change is that California will now require many insurance companies to do more business in what the state calls “distressed areas,” the fire-prone scrubland and mountain regions where insurers are now hiking prices and dropping customers.

Companies will soon have to ensure that their market share in these areas is at least 85% of their total statewide market share — in other words, if a company controls 10% of the state’s insurance market, it must control at least 8.5% of the market in fire-prone areas.

This mandate should push big companies like State Farm and Allstate to pick up customers they’ve dropped in flammable regions like the mountainous north of the state. Some companies have already begun to offer new policies in burned areas in anticipation of the state’s new rules: the insurance company Mercury announced last week that it will be the first insurance company in the state to offer new policies in Paradise, California, which was destroyed in the catastrophic 2018 Camp Fire. The move recognizes the town’s work to mitigate future fires by clearing trees and hardening homes.

Expanded coverage comes with a high cost

The requirement to expand coverage, coupled with recent announcements from companies like Mercury, “should give consumers hope that competition and options will be returning,” said Amy Bach, the head of insurance customer advocacy group United Policyholders, in a statement.

In return for this added coverage, the state is making a few big tweaks that will allow insurers to pass on the price of fire risk to their customers. California is the only state in the country that doesn’t allow insurance companies to use forward-looking “catastrophe models” when they set prices. It also prohibits companies from factoring in the rising costs of reinsurance, the insurance purchased by insurance companies to ensure they’re able to pay out big claims.

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These two restrictions have kept prices artificially low for years, and also prevented insurers from planning for climate change impacts, creating a de facto subsidy for homeowners in risky areas. But these protections were removed in an attempt to coax insurers back into the market.

“This addresses the major stumbling blocks that companies have been identifying for a decade, so that’s a positive,” says Rex Frazier, the president of the Personal Insurance Federation of California, the state’s leading insurance trade group.

This trade-off has some residents in fire-prone areas worried. Insurance companies might now have to offer more policies in flammable zones, but they also have more latitude to increase prices.

“I’m not optimistic that it will improve the experience of the consumer, as the insurers can now pass certain costs on to consumers, which I’m expecting will result in higher premiums,” says Jason Lloyd, who moved to mountainous Lake County last spring. He and his wife came to the area because they wanted to be closer to his wife’s family, but when they made an offer on a home, they learned that they would have to pay more than US$8,000 a year for insurance, or else go to the California FAIR Plan, a state-run insurance program that offers minimal coverage.

Lloyd and his wife later bought another home in Hidden Valley Lake, a town that has taken ambitious steps to reduce flammable vegetation, but their insurance premium is still more than $4,500 a year, more than triple what it was on their last home in Kansas. Lloyd is worried that his insurance company will hike his price further under the new rules.

Making a bargain with the insurance industry

Other states across the West such as Colorado and Oregon are also seeing insurance coverage gaps emerge after big wildfires, though their problems are less acute than those in the Golden State. In Colorado, for instance, officials just recently established a state fire-insurance backstop like California’s FAIR Plan, since it’s only in the past few years that customers there have been dropped en masse.

California’s grand bargain with the insurance industry provides a blueprint for those other states: if you want to address coverage gaps, you need to give insurers broader authority to set prices.

Even this might not be enough. The past few years have seen a reprieve from major wildfires like the ones that struck in 2017 and 2018, but this week’s blazes in the Los Angeles area could cause billions of dollars of damage, on par with an event like the Camp Fire.

Joel Laucher, a former regulator and fire insurance expert at the consumer advocacy organization United Policyholders, said that the damage from the Los Angeles blazes could lead to further price hikes and more availability gaps.

“These are going to be major losses, certainly,” he tells Grist. “Certain areas are definitely going to have new challenges, to the degree that insurers are going to be able to charge to the rate they believe those areas deserve to pay.” Laucher says that insurance companies may not decline to renew as many policies as they might have under previous state rules, but they could still avoid selling policies in some of the affected areas.

Frazier, of the insurance trade group, voices similar concerns. He says that another round of monster blazes on the scale of 2017 and 2018 could drive the insurance industry away from the state once again, despite the commissioners’ reforms.

“If we were to have a couple more unprecedented years, all bets are off,” he says.

The post The Palisades Fire is the first big test for California’s new home insurance scheme appeared first on Corporate Knights.

The measures come as a so-called heat dome sitting atop Mexico is shattering temperature records in Central America, and both Central and South America are wasting beneath a drought driven by the climate phenomenon known as El Niño, which periodically brings exceptionally dry weather to the Southern Hemisphere. Droughts in the region have grown more intense thanks to warmer winter temperatures and long-term aridification fueled by climate change. The present dry spell has shriveled river systems in Mexico and Colombia and lowered water levels in the reservoirs that supply their growing cities. Officials in both cities have warned that, in June, their water systems might reach a “Day Zero” in which they fail altogether unless residents cut usage.

In warning about the potential for a Day Zero in the water system, both cities are referencing the famous example set by Cape Town, South Africa, which made global headlines in 2018 when it almost ran out of water. The city was months away from a total collapse of its reservoir system when it mounted an unprecedented public awareness campaign and rolled out strict fees on water consumption. These measures succeeded in pulling the city back from the brink.

Six years later, Cape Town stands as a success story in municipal crisis management, but experts say its playbook will be hard for Mexico City and Bogotá to replicate. Instead of focusing primarily on changing public behavior, these cities will need to make big investments to improve aging infrastructure and shore up their water supplies. How they fare in these endeavors will in turn inform future efforts to make the world’s fast-growing cities resilient to increasing climate volatility.

“The bigger question, and what’s relevant for other cities, is now that we’ve experienced this, what can we do going forward to make sure that this doesn’t happen again?” said Johanna Brühl, a water expert at the nonprofit Environment for Development in South Africa who has studied Cape Town’s water crisis.

Coining the very phrase “Day Zero” was part of Cape Town’s solution to a water crisis that many officials had seen coming for years. As reservoir levels fell between 2015 and 2017 amid a drought, city leaders released dozens of statements urging residents to reduce water usage, but no one paid much attention. Only in early 2018, when officials started talking in increasingly apocalyptic terms about a collapse of the municipal water system, did residents — and international media outlets — start to pay attention.

The city rolled out a set of measures to enforce cuts, including a tariff system that charged more thirsty users a higher price per gallon plus a door-knocking campaign to shame the biggest water hogs. But it was the rhetoric around Day Zero that seemed to be the most effective tool to slash water usage, experts who studied the crisis told Grist. When the local government warned that residents would have to pick up buckets of water from public collection points managed by the military, consumption plummeted. The effort to stave off a water crisis began to look like a grassroots movement, with residents sharing conservation tricks like flushing the toilet with water captured from the shower.

By April 2018, water usage had fallen to about half of what it was three years earlier, a decline that astonished even city officials. As consumption dropped, the city pushed the estimated date of the apocalypse out by a few days, then a few weeks. When a big rain arrived in the early summer and began to refill the reservoirs, the government turned off the countdown altogether, declaring the crisis at a temporary end.

“The big take-home point for any city in terms of navigating that kind of crisis is just to change the culture and to get the needle moving in the right direction,” said Eddie Andrews, the deputy mayor of Cape Town, who was a city council member during the Day Zero affair. “Culture is really important — making sure that you remain on message.”

Warnings of a water crisis

Political leaders in Mexico and Colombia have both been sending out the same dire warnings: One prominent Mexico City politician warned in March that the city is “at the edge of the precipice,” and last month Bogotá’s mayor announced that the city had only around 50 days of water remaining, with residents looking at “weeks and months” of water rationing.

But Cape Town’s grassroots conservation success will be difficult to replicate. In order for such messaging to work, residents have to trust their government. Indeed, other large South African cities like Johannesburg and Durban have struggled to spur usage reductions during periods of water stress, in part because they are governed by the African National Congress, or ANC. While the ANC has been the country’s dominant political party since its heroic 1994 victory over the apartheid regime that had ruled South Africa for decades, popular enthusiasm for the party has plummeted in recent years as corruption scandals have engulfed its top ranks. Unlike the governing bodies of South Africa’s other major cities, the Western Cape government that oversees Cape Town is led by an opposition party that enjoys far more local support than the ANC.

Manuel Perló Cohen, a professor who studies water infrastructure at the National Autonomous University of Mexico in Mexico City, said the government in Mexico City doesn’t enjoy the same kind of goodwill, meaning the government’s available tools may be limited to things like mandatory water restrictions.

“It won’t work here, because there’s a lack of confidence in the government,” he told Grist. “People don’t believe in most of what the government says, even if it’s the truth.” Mexico is just weeks away from a major election, and the incumbent leaders in Mexico City as well as the federal government have tried to downplay the water issues even as their opponents seize on it for campaign fodder.

To really have control over the future of its water, a city also needs to have control over its physical infrastructure. But Mexico City loses almost 40% of its municipal water to leakage from pipes and canals, one of the highest rates in the world. This means that residential conservation efforts can only have a limited effect on the overall water budget, according to Perló Cohen. The city has also seen a rise in water theft from canals and reservoir systems: Organized crime groups siphon off public water and use it to grow avocados or resell it to water-starved households at a high markup. Locals call this huachicoleo de agua, using a term coined to describe fuel theft.

While the city government of Bogotá has both the public trust and the political power to implement rotating water shutoffs — which has helped protect reservoir levels — the city’s conservation campaign is lacking another crucial ingredient: enthusiasm. As in Cape Town, residents shared novel ways to reduce water usage during the first week of the crisis, but since then the local media has stopped devoting as much attention to the shutoffs. Water usage has begun to tick back up.

“These types of campaigns are difficult to get across to people,” said Laura Bulbena, a Bogotá-based advocate with the environmental nonprofit World Resources Institute. “It’s rained a little in Bogotá, two weeks passed, and actually the numbers show that water consumption went up. So not only there isn’t enough reduction, there’s not enough water coming into the reservoirs.”

But there are other lessons from Cape Town’s water crisis, ones that any city could follow. In its aftermath, the city diversified its water system and reduced reliance on the main reservoirs that shrank during the drought. Officials now plan to build multiple seawater-desalination plants and recharge groundwater aquifers with treated wastewater. This will put the city on far better footing for future dry spells.

“Every single crisis presents opportunities,” said Andrews, the deputy mayor of Cape Town. “We’ve seen that you can’t just rely on the rainfall. You have to augment.”

Bogotá relies on reservoirs for almost its entire water supply, and officials had long believed that the reservoir system was resilient to drought. Now, they may change course and invest in alternate supplies. Experts say bringing in new water sources wouldn’t break the bank; the local water utility could tap the healthy underground aquifer beneath the city, and Bulbena’s team at World Resources Institute has shown that restoring a natural environment in the nearby Bogotá River could help clean that river’s water for drinking.

Every single crisis presents opportunities.

-Andrews, deputy mayor of Cape Town

“The water system is overall very good in Bogotá, but the city must invest in a backup system, because this El Niño system will probably be repeated frequently,” said Armando Sarmiento López, a professor of ecology at Javeriana University in Bogotá.

Alejandra Lopez Rodriguez, a policy advocate at the Nature Conservancy in Mexico City, said that the government of that city could also fix its severe leakage problem and build wastewater treatment plants — if officials choose to prioritize those projects.

“We have resources and we have access to financing,” she told Grist. “There are resources available. It just also takes a will and an interest to want to invest in these issues.”

The Nature Conservancy runs a water investment fund in Mexico City that has financed conservation efforts in the pine forests surrounding the metropolis; these forests capture water and help recharge the city’s collapsing groundwater aquifers.

Recharging aquifers and building desalination plants is one thing, but the water crises in these cities have also revealed a stark fact: For many of the poorest residents in a metropolis like Cape Town, clean water was never available in the first place.

The wealthy and middle-class areas of Cape Town receive piped water from reservoirs, but residents who live in the vast townships outside the city have to get water from communal standpipes — the very fate that so frightened middle-class residents of the city in the leadup to Day Zero. In the eastern neighborhoods of Mexico City, many taps have never released water for more than a few hours each day, according to Lopez Rodriguez, and much of that water is from contaminated sections of the aquifer. Lopez Rodriguez speculates that the crisis in Mexico City has drawn international attention because it has begun to affect upper-class neighborhoods that are accustomed to reliable water deliveries from the reservoir system.

Even during the peak of the Day Zero affair, many of the worst-off residents of Cape Town pointed to the same disparity, said Richard Meissner, a professor of political science at the University of South Africa who has studied the city’s response to the 2018 drought.

“I remember that some of the less affluent people in the city said that the campaign is aimed at the more affluent portions of Cape Town,” he said. “They said, ‘They don’t care about us, because for us every day is a Day Zero.’”

This article originally appeared in Grist. Read the original story here. 

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. 

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