A conservative plan aimed at making the U.S. abandon global financial institutions threatens to topple efforts to steer more money toward battling climate change and other global challenges.
Such a move, which is called for in a 920-page governing playbook if former President Donald Trump wins a second term, could derail international efforts to push the World Bank and other institutions to increase programs for clean energy and climate adaptation, according to analysts. And it could make it harder for the bank to draw in more funding if its largest shareholder stops contributing.
The idea to withdraw from the world’s leading development banks is found in a single line within Project 2025, the playbook written by more than 100 conservative organizations with ties to Trump, the presumptive Republican nominee, and released by the Heritage Foundation.
It urges the U.S. to “withdraw from both the World Bank and the [International Monetary Fund] and terminate its financial contributions to both institutions,” saying they create “expensive middle-men” that “intercept” U.S. funding before it can be distributed for projects abroad.
Both banks are meeting for annual gatherings this week to discuss how they can squeeze more money out of their accounts, get it to countries faster and persuade major shareholders to inject more capital.
Development banks play a crucial role in delivering money to countries for fending off climate change. The amount of money poorer nations receive through low-interest loans from the banks often influence the strength of their climate targets, all of which will be updated next year as called for under the Paris Agreement.
While the conservative push isn’t solely aimed at the work those institutions do to address global warming, climate change is one issue that conservatives say the banks are devoting too much attention to.
The U.S. should stop funding the World Bank and IMF because they promote “policies that are harmful to the countries they’re trying to help,” especially on climate change, said Stephen Moore, a co-author of the Project 2025 chapter on finance and a longtime economic adviser to Trump. That includes funding renewable energy projects when it would be more beneficial in some regions to build power plants that run on fossil fuels, he said.
“Climate change is something really, really rich people can afford to worry about, but not poor people,” Moore said in an interview. “They have to worry about how they’re going to get their meal next week.”
Withdrawing from the World Bank and IMF could have profound implications, experts said, in part by reducing U.S. influence over global climate efforts. The U.S. is the largest World Bank shareholder, having pledged $13.2 billion since 2018.
It just “sows seeds of doubt” about whether the countries that are essentially the owners of these institutions “are really serious about what these institutions need to do at this point in their history,” a former World Bank official told E&E News.
“And at this point in their history, these are the institutions we’re relying on to respond to the debt and liquidity crises, a crisis of inequality, and a profound climate crisis,” said the official, who was granted anonymity to speak openly about political issues.
Leaving the banks means more than just relinquishing American influence over those institutions. It could also erode the idea that the U.S. is committed to helping other countries.
“It’s such a draconian move it’s hard to overstate how badly this would be perceived,” said Clemence Landers, a former official at the World Bank and the Treasury Department. “It would be such a sign of a unilateral approach that it would be very, very hard to enter into an international agreement or do anything internationally with the United States because they just would not be seen as a reliable or trusted partner.”
Pulling back from multilateral organizations is a signature of the conservative agenda that critics say would deeply harm U.S. standing at a time of increased geopolitical tension and competition for resources and influence.
“Donald Trump and his extreme allies don’t believe America should lead the world, they think we should retreat,” Biden campaign spokesperson James Singer said in a statement. “Trump is so focused on himself and his campaign of revenge that he’s willing to sacrifice the world’s future.”
The Trump campaign did not respond to requests for comment. The campaign has previously said that Heritage’s policy playbook did not necessarily represent Trump’s position.
A call to ‘evolve’
The U.S. is the largest member and shareholder in both the World Bank and IMF, giving it sway over their direction. In 2022, Treasury Secretary Janet Yellen instructed the World Bank to “evolve” how it lends to developing countries to better address climate change and other global challenges.
Months later, President Joe Biden nominated Ajay Banga, a business executive raised in India, as the bank’s new leader. It came after Trump appointee David Malpass announced his resignation following months of controversy over his professed skepticism in the role fossil fuels play in driving up global temperatures.
If Trump is reelected, Moore said the president wouldn’t be able to simply drop out of the World Bank. That would likely take an act of Congress. But it could stop allocating money to it.
The World Bank’s charter allows members to withdraw unilaterally, but U.S. law is unsettled on the matter, said Vijay Tata, former chief counsel at the World Bank who’s now a lecturer at Columbia Law School. Congress, for example, recently passed a statute requiring congressional approval before withdrawing from NATO.
Moore, who still talks with Trump about economic issues, also wants the U.S. to drop out of the United Nations; World Health Organization; United Nations Educational, Scientific and Cultural Organization; and Organisation for Economic Co-operation and Development.
All of those groups, he contended, have been “taken over by a radical-left agenda.”
To stay or go?
The U.S. was a leader in creating the World Bank and IMF as part of the Bretton Woods Agreement in 1944. Since then, the banks have weathered challenges such as the Cold War and Republican-led disputes over funding of reproductive assistance.
“These are not single-issue organizations,” said Tata. “They’re very complex. There’s a long history. These organizations have been used by Republicans as much as they have been used by the Democrats.”
He doesn’t see a rationale for withdrawing from the banks over climate change, saying a future Trump administration could be just as effective at limiting efforts related to rising temperatures by staying a member.
If the U.S. does withdraw from the World Bank and IMF, the question would be who occupies the space the U.S. has ceded.
China might be one answer.
The U.S. has resisted efforts to inject more money into the World Bank by other nations because it could dilute its contributions — and influence — and lead to bigger pledges by China, the former World Bank official said.
Tata, the bank’s former chief counsel, indicated that withdrawing from the bank could multiply China’s influence.
“These geopolitical issue are not lost on the adults in the room, even in a Trump administration,” he said.
Moore rejected the notion that the U.S. should stay in the World Bank and IMF just to counter the threat from China.
“If China wants to waste money on the World Bank, the IMF, they should have at it, it’s not going to increase their power, it’s gonna make them poor,” he said.
