The Green Climate Fund (GCF) is the main global fund under the UN climate system that channels money from richer countries and other contributors to help developing countries deal with climate change. It finances projects that cut greenhouse gas emissions (mitigation) and help communities cope with climate impacts (adaptation), using tools like grants, low‑interest loans, equity investments and guarantees for things such as renewable energy, climate‑resilient agriculture, coastal protection and resilient infrastructure.
The UN Framework Convention on Climate Change (UNFCCC) is a 1992 international treaty, now with almost universal membership, that sets the basic rules for how countries cooperate on climate change—mainly by requiring them to report emissions, plan efforts to limit warming and support vulnerable countries. The Green Climate Fund was created by UNFCCC parties in 2010 as an “operating entity” of the treaty’s financial mechanism, meaning it exists specifically to help fulfill UNFCCC (and Paris Agreement) goals by providing climate finance to developing countries.
“Stepping down from its seat on the GCF Board” means the United States will no longer have a formal role in governing the Green Climate Fund. Practically, that means the U.S. loses its voting voice in decisions on which projects are approved, how money is allocated, what policies the fund follows, and how its rules evolve; those decisions will instead be made by the remaining 24 Board members from other contributor and recipient countries.
The Treasury announcement says only that the U.S. is “withdrawing from the Fund” and will “no longer fund” organizations like the GCF; it does not spell out, in legal terms, whether previously pledged but unpaid U.S. contributions are being formally cancelled or could still be honored later. Historically, however, similar U.S. withdrawals (for example under earlier Trump actions) have meant that unpaid portions of climate‑finance pledges were not delivered, suggesting that any outstanding U.S. pledges to the GCF are now unlikely to be paid unless a future administration reverses the decision.
Scott Bessent is a former hedge fund manager who has served as the 79th U.S. Secretary of the Treasury since January 28, 2025, in Donald Trump’s second administration. As Treasury Secretary he oversees U.S. economic and financial policy, including U.S. participation in international financial institutions and funds. For multilateral climate funds like the GCF, the Treasury typically acts as the U.S. shareholder or focal agency—coordinating U.S. policy positions, managing contributions and, as in this case, formally notifying the fund and other governments when the U.S. changes its participation or funding decisions.
U.S. withdrawal reduces the pool of money and political backing available through the Green Climate Fund, so over time it can make it harder for some developing countries to finance planned climate projects or scale them up. However, existing GCF‑approved projects are governed by contracts between the fund and implementing agencies; those projects are generally expected to continue using resources already committed by the GCF, while new or expanded activities may face tighter funding unless other donor countries or sources step in to fill the gap.
There is no automatic legal penalty for leaving the GCF itself, but there are broader consequences from withdrawing from both the GCF and the UNFCCC. Under the UNFCCC rules, a country’s exit takes effect one year after formal notification; until then, it remains a party on paper. Legal scholars note that unilaterally quitting a Senate‑ratified treaty like the UNFCCC may be open to court challenge in the United States, and future re‑entry could require significant political effort. Diplomatically, analysts warn that leaving the UNFCCC and its main climate‑finance fund isolates the U.S. from global climate negotiations, erodes its influence over how climate rules and finance are shaped, and may damage trust with allies and vulnerable countries that had expected long‑term U.S. engagement.