Case Study: Understanding the Withdrawal

What Happened

On January 8, 2026, the United States withdrew from the UN Framework Convention on Climate Change (UNFCCC) and the Intergovernmental Panel on Climate Change (IPCC). This represents the most comprehensive climate treaty exit in history, going beyond the previous Paris Agreement withdrawal.

Key Players

• United States: World’s largest historical greenhouse gas emitter, now abandoning international climate cooperation
• Simon Stiell (UN Climate Chief): Condemned the move as “colossal own goal” that will harm US economy and security
• UNFCCC: The foundational 1992 treaty signed by 198 parties, establishing framework for global climate action
• IPCC: Scientific body where US scientists played crucial assessment roles

The Stakes

The UNFCCC requires developed nations to cut emissions, adopt climate policies, report emissions transparently, and fund developing countries’ climate efforts. US withdrawal eliminates its formal obligations while climate impacts intensify globally.

Historical Context

This marks the second Trump administration action on climate treaties, but far more severe than the 2017 Paris Agreement exit, which President Biden reversed in 2021. Withdrawing from the UNFCCC itself removes the US from the entire international climate framework.

Outlook: What This Means Going Forward

Short-Term Implications (2026-2028)

Global Climate Finance: The US was a major contributor to climate funding for developing nations. This withdrawal creates an estimated $2-3 billion annual funding gap that other nations must fill.

Diplomatic Isolation: The US becomes the only major economy outside the UNFCCC framework, potentially weakening its influence in international negotiations on trade, technology, and energy policy.

Market Uncertainty: Clean energy investments may slow in the US, but accelerate elsewhere as other nations double down on climate commitments. The global renewable energy market continues growing, increasingly without US participation.

Medium-Term Consequences (2028-2035)

Economic Competitiveness: As Europe, China, and other regions advance clean technology, US companies risk losing competitive advantage in the $23 trillion clean energy transition market.

Climate Impacts: Without federal climate action, the US faces escalating costs from wildfires, hurricanes, floods, and droughts, with limited international cooperation for disaster response.

Scientific Leadership: IPCC withdrawal means reduced US scientific input in global climate assessments, potentially diminishing American research influence.

Long-Term Uncertainties

Potential Reversal: A future US administration could rejoin these treaties, though trust and credibility would take years to rebuild.

Fragmented Response: US states, cities, and corporations may continue climate action independently, creating a patchwork approach rather than coordinated federal policy.

Geopolitical Shifts: China and the EU may fill the climate leadership vacuum, reshaping global power dynamics around green technology and climate diplomacy.

Solutions: Pathways Forward

For the International Community

Strengthen Climate Coalition: The remaining 197 UNFCCC parties should reaffirm commitments and accelerate emissions reductions to compensate for US inaction.

Fill Funding Gaps: EU, Japan, Canada, and Gulf states could increase climate finance contributions to developing nations, ensuring vulnerable countries still receive support.

Border Adjustment Mechanisms: Implement carbon border taxes on US imports to maintain competitive fairness and incentivize US climate action through economic pressure.

Technology Cooperation: Continue clean energy innovation partnerships among willing nations, potentially creating standards that become global norms regardless of US participation.

For US Sub-National Actors

State-Level Action: California, New York, and other states can maintain emissions targets, renewable energy mandates, and regional carbon markets.

City Initiatives: Urban areas representing 60% of US GDP can continue climate adaptation, clean energy procurement, and green infrastructure investments.

Corporate Leadership: US businesses can voluntarily maintain emissions reductions, knowing that global markets increasingly favor sustainable products and operations.

For Developing Nations

Diversify Partnerships: Seek climate finance and technology transfer from China, EU, and multilateral development banks rather than relying on US support.

South-South Cooperation: Strengthen collaboration among developing nations to share adaptation strategies, renewable energy solutions, and resilience building approaches.

Legal Advocacy: Continue pressing for climate justice and loss-and-damage compensation through international forums, even without US participation.

Singapore Impact Analysis

Direct Economic Effects

Trade Implications: Singapore’s economy, heavily dependent on international trade and finance, faces uncertainty as global climate policies fragment. Carbon border adjustments by the EU could affect Singapore’s re-export sector if US goods lack carbon pricing.

Financial Hub Status: As a major Asian financial center, Singapore may need to navigate between US-aligned and climate-committed investment frameworks. Green finance opportunities could grow as capital flows away from US markets toward climate-compliant jurisdictions.

Maritime and Aviation: Singapore’s port and Changi Airport face potential carbon costs under international emissions schemes. Without US cooperation, global standards may become more complex to navigate.

Climate Vulnerability Concerns

Sea Level Rise: As a low-lying island nation investing billions in coastal protection, Singapore depends on effective global emissions reductions. US withdrawal makes the 1.5°C Paris target significantly harder to achieve, potentially requiring Singapore to accelerate its $100 billion coastal defense plans.

Regional Climate Impacts: Weaker global climate action means more severe droughts, floods, and heatwaves across Southeast Asia, affecting Singapore’s water supply (Malaysia dependency), food security (import reliance), and regional stability.

Heat Stress: Rising temperatures make Singapore’s tropical climate increasingly challenging. Without aggressive global action, outdoor work, public health, and energy demand for cooling will face greater strain.

Strategic Response Opportunities

Climate Leadership Position: Singapore can strengthen its role as a regional climate hub, hosting green finance initiatives, carbon trading platforms, and clean energy research centers as the US steps back.

ASEAN Coordination: Lead Southeast Asian climate cooperation, helping neighbors access alternative funding sources and sharing adaptation expertise developed for Singapore’s unique challenges.

Technology Pivot: Accelerate partnerships with the EU, China, Japan, and South Korea on clean technology, positioning Singapore as a testing ground and distribution hub for Asian climate solutions.

Carbon Services Market: Expand Singapore’s carbon credits and services trading capabilities as regional demand grows, potentially capturing market share from reduced US participation in global carbon markets.

Policy Recommendations for Singapore

Maintain Climate Commitments: Reaffirm Singapore’s net-zero by 2050 target and Green Plan 2030 regardless of US actions, ensuring access to climate-committed markets.

Diversify Climate Partnerships: Strengthen bilateral agreements with the EU, China, Japan, and Australia on green technology, research collaboration, and climate finance.

Enhance Resilience Investment: Accelerate coastal protection, water security, and heat adaptation measures, assuming more severe climate scenarios given reduced global ambition.

Support Regional Adaptation: Increase Singapore’s climate finance and technical assistance to ASEAN neighbors, building regional resilience and strengthening diplomatic ties.

Financial Sector Positioning: Ensure Singapore’s banking and investment sectors align with international climate disclosure standards (EU taxonomy, ISSB), maintaining competitiveness as green finance grows globally.

Bottom Line for Singapore

The US withdrawal presents both risks and opportunities. Singapore faces increased physical climate threats and economic uncertainty, but can leverage this moment to strengthen regional climate leadership, attract green investment fleeing US markets, and position itself as a trusted partner for climate-committed nations. The key is maintaining credibility through consistent policy while adapting quickly to a more fragmented global climate landscape.

Singapore’s vulnerability as a small, low-lying island state makes strong global climate action existential. This withdrawal underscores why Singapore must continue investing heavily in adaptation while pursuing every diplomatic avenue to encourage renewed US climate engagement and strengthen climate cooperation among remaining committed nations.