US exits $9.3 billion climate deal
In a move that has stirred international concern, the United States has withdrawn from the Just Energy Transition Partnerships (JETP), a significant initiative aimed at assisting emerging economies in their shift away from fossil fuels. Launched in 2021, the JETP was designed to mobilize multi-billion-dollar investments to support the transition of developing nations from coal and other non-renewable energy sources to cleaner alternatives.
The withdrawal of the U.S. has raised questions about the future of the program, particularly for countries like South Africa and Indonesia, which were slated to be major beneficiaries. While other partner nations, including France, Germany, the European Union, the UK, the Netherlands, and Denmark, have reaffirmed their commitment to the JETP, the absence of the U.S. is expected to have tangible consequences.
According to a statement from the office of South African President Cyril Ramaphosa, the U.S. exit has already led to the cancellation of grant projects that were previously funded or in the planning and implementation phases. These cancellations represent a setback for South Africa's efforts to transition its energy sector, which is heavily reliant on coal. South Africa, one of the world’s largest polluters, generates 80% of its electricity from coal.
Indonesia's JETP Secretariat head, Paul Butarbutar, confirmed that the U.S. embassy in Jakarta had informed him of Washington's decision, citing an executive order from former President Donald Trump. While Butarbutar noted that the overall pledge of $21.6 billion (€20.70 billion) from public and private donors remains unchanged, the U.S. withdrawal will specifically impact transition studies and grant funding in Indonesia. This could hinder the country's ability to conduct thorough assessments and implement effective strategies for its energy transition.
Under the JETP agreements, South Africa was promised $56 million (€52.37 million) in grants and an additional $1 billion in potential commercial investments. Similar agreements were established with Indonesia and Vietnam, highlighting the broad scope of the initiative and the potential impact of the U.S. withdrawal on these nations.
The JETP initiative, since its inception, has faced challenges in achieving its intended objectives. These challenges include financing hurdles, leadership transitions in Indonesia and Vietnam, and the inherent complexities of decommissioning coal-fired power plants. The U.S. withdrawal adds another layer of complexity to these existing issues.
Despite the U.S. decision, international reactions have been mixed. UK climate envoy Rachel Kyte described the withdrawal as
