The US retreat on climate comes with steep costs for the economy and the American people

On its first day in office, the Trump administration has withdrawn from the Paris Agreement on climate change. The United States’ repeated withdrawal (President Donald Trump withdrew in his first term, then President Joe Biden rejoined) will not halt the global efforts to meet the 2015 Paris goals to limit global temperature rise. The climate crisis has moved far beyond the capacity for the United States to solve it unilaterally. Nevertheless, this decision will make progress more challenging and implementation more tenuous since the United States is one of the largest emitters.

While the withdrawal is an important global signal and will make efforts to combat climate change more difficult, the new administration’s de-prioritization of climate action will have immediate and concrete consequences for Americans themselves. The country will bear a heavier burden of inaction as well as the losses of delayed national investment in adaptation and resilience if Trump succeeds in fully repealing the Biden administration’s climate investments.

This month provided a stark example of that opportunity cost. The Los Angeles wildfires killed twenty-seven people and burned through over 12,000 structures. The loss is visible and immediate. Notably, the true cost is still being calculated. Analysts are projecting economic losses of as much as $150 billion and anticipate more deaths as the ramifications of degraded air quality and smoke take full effect.

The deeper concern is that this withdrawal, coupled with Trump’s other executive orders to facilitate the fossil fuel industry and backtrack on climate investments, will have significant impacts on the American public, since increasing greenhouse gas emissions has a direct effect on increasing the frequency and intensity of natural disasters.

Hence, if in addition to these decisions, the Trump administration opts out of actively investing in disaster preparedness, its economic and financial losses will rise exponentially. In fact, it is estimated that each dollar spent on disaster preparedness and climate adaptation saves twelve dollars in recovery and response. Without climate-related action and resilience-building efforts, it will fall to the American taxpayer to cover that additional eleven dollars.

The United States is stepping back on climate at a critical moment for action. The public and private sectors need to be taking this moment to coordinate and align. But instead, the new administration is signaling, at least initially, a lack of political will that could set the country back both in terms of individual preparedness and long-term economic opportunity.

Other countries are seizing the economic opportunities of climate adaptation and resilience. Germany is set to invest at least €1.6 billion in artificial intelligence, including for climate efforts, by 2025; Japan has committed to doubling adaptation finance to $14.8 billion by 2025; and countries such as Uruguay, Denmark, and Lithuania are recognized for having scaled up the share of solar and wind energy in their electricity mix by at least 6 percentage points annually over a five-year span.

Trump’s recent executive orders mark not only a lack of commitment to climate action but also a backtracking on notable climate investments under the Biden administration. The private sector will likely no longer have the government’s support in fast-tracking adaptation initiatives. As other countries scale up incentives, this will make it more difficult for the United States to hold any competitive advantage in the long term.

In the short-term, however, it’s lives and livelihoods that are at risk. Without mitigation and adaptation, climate change is set to kill 3.4 million people each year by the end of the century. While the United States’ retreat from climate leadership has significant geopolitical implications, the more pressing concern is on the national impacts. Americans will face the consequences of inaction. They will have lower capacity to overcome climate shocks and stresses, putting their own health, finances, and well-being on the line. In fact, our Climate Resilience Center estimated that heat-related labor-productivity losses could cost half a trillion dollars annually by 2050 in the United States alone. Ignoring or denying the reality of climate change will not avoid its impacts.

Indeed, the world will feel the loss of US leadership under the Trump administration. Progress can—and must—continue, but the average American will feel the weight of these decisions on a personal, financial, and social level for years to come. Although Trump has made his climate stance clear in his first few hours back in the White House, there is time for his administration and the president himself to reassess and reinvest in a new way forward.


Jorge Gastelumendi is the senior director of the Atlantic Council’s Climate Resilience Center. He previously served as chief advisor and negotiator to the government of Peru during the adoption of the Paris Agreement.

Further reading

Image: US President Donald Trump signs documents as he issues executive orders and pardons for January 6 defendants in the Oval Office at the White House on Inauguration Day in Washington, U.S., January 20, 2025. REUTERS/Carlos Barria.