Beyond the Funding Gap

Interviewees across the five primary focus countries reported backsliding in environmental policies and standards, institutional accountability, and democratic processes related to environmental laws and regulations. As the global survey validated, government officials and civil society groups pushing for environmental reforms lost access to USAID's ongoing “soft diplomacy,” which had been used to defend them against political backlash and to counter opposition within their own governments. Interviewees noted that this loss stalled national environmental mandates and rolled back community-led governance structures, as governments that had relied on USAID's backing to defend contested reforms became more hesitant to finalize them without that support. For example, in Colombia, the withdrawal completely halted high-level bilateral initiatives that explicitly integrated environmental protection into the national counter-narcotics agenda. Because half of Colombian coca is grown within national parks and protected areas, USAID had made critical progress toward securing the official adoption of voluntary crop substitution into the government's policy metrics; however, the sudden U.S. exit left this foundational policy work completely unfinished, undermining one of the only programs actively working to keep coca cultivation from expanding further into the fragile Colombian Amazon.

Interviewees in all five primary focus countries stated that access to critical institutional memory, centralized, open-access data and knowledge portals, and rigorous monitoring frameworks has been sharply eroded. The shutdown of centralized knowledge portals and open-source scientific tools stranded public data, which practitioners warned left highly vulnerable ecosystems unmonitored, and undercut the ability of civil society watchdogs to track threats. Interviewees perceived that this collapse of transparency has harmed independent journalism and limits countries' ability to track global climate baselines. For example, in Colombia, the withdrawal occurred mid-process during the automation of the National Land Agency's information systems, leaving over 70,000 rural land tenure cases stranded. A former project director warned this vital data is now at risk of sitting 'in a drawer,' depriving thousands of vulnerable rural families of their formal land titles and undermining the broader strategy of using secure land rights to combat illegal economies and protect ecosystems.

Across the focus countries, interviewees perceived that the sudden removal of financial and diplomatic support led to a resurgence of environmentally destructive practices and illicit economies. Additionally, interviewees emphasized that physical risks to frontline communities and environmental defenders have escalated, and that vital alternative economic lifelines for vulnerable populations have been removed. In Peru, a technical partner noted that the loss of USAID's support and oversight coincided with a rapid spike in unauthorized infrastructure, pointing out that illegal landing strips used for smuggling gold and drugs in the Ucayali region of the Amazon rainforest more than doubled, from 62 to 141, shortly after the withdrawal disrupted regional interventions. The partner emphasized that this spike occurred not because USAID had been directly combating the crimes, but because the agency had been providing local institutions with the essential tools, policies, and physical presence needed to control deforestation. When that funding was lost, those tools and support vanished, making way for the expansion of illegal activities. 

There was consensus among interviewees that the U.S. exit triggered a global "donor contagion," causing other international funders to retreat and collapsing the co-investment structures that previously mobilized broader capital. Because U.S. funding frequently served as the essential "anchor capital" for public-private matching and cross-donor confidence, practitioners reported that its loss derailed cost-sharing models and led to a hyper-competitive scramble for fragmented replacement funds. Interviewees observed that the broader funding ecosystem shrank as other bilateral donors reduced their commitments out of fear or shifting priorities. In Kenya, for example, a co-investment structure was disrupted when county governments in highly climate-vulnerable regions were left financially stranded mid-construction after committing their own public funds, often 30% to 40% of the total project cost, to match a USAID resilience project that was subsequently canceled.

Interviewees across all five primary focus countries noted that local grassroots organizations, which practitioners emphasized form the backbone of the sector, absorbed the full force of the financial shock, suffering massive workforce loss and reduced scope and scale of work. To survive, project leaders reported that these grassroots organizations were forced to fire specialized staff, drastically cut salaries, and completely abandon environmental projects in remote regions they could no longer afford to reach. Interviewees overwhelmingly perceived that the chaotic nature of project terminations led communities to view the sudden halt as a direct betrayal by local NGOs, eroding grassroots trust and fueling anti-NGO political crackdowns globally. In Vietnam, the sudden cancellations severely damaged stakeholder trust, with practitioners reporting that the U.S. and its local implementing partners were suddenly viewed as highly unreliable. The reputational fallout was so intense that some local organizations faced “criminal” narratives in the press, destroying hard-won credibility that implementers warn will take years to recover.

Across the focus countries, interviewees reported that the withdrawal removed access to essential technical support and day-to-day mentorship needed to execute complex environmental projects successfully. Implementers observed that partner governments lost the trusted, independent experts they relied upon to evaluate complex climate and energy policies on their technical merits, free from pressure to serve any particular commercial interest or take on unnecessary debt. At the local level, project leaders expressed that municipalities abruptly lost the practical guidance needed to write the highly specific, competitive proposals required to secure financing. For example, when Ho Chi Minh City was seeking World Bank financing for a cluster of waste-to-energy projects, it relied on USAID expert support to navigate the complex bureaucratic requirements. Without that support, the city was left without the specialized staff needed to secure or manage the financing.

Without multi-year project horizons and central convening power, multiple project leaders observed that the environment sector has regressed toward fragmented, short-term, and transactional aid models that fund discrete, immediate expenses rather than the sustained, systemic work needed to change outcomes. By removing the central organizing hub, USAID’s withdrawal fractured donor coordination and dissolved complex cross-border alliances, according to practitioners in some focus countries. Implementers warned that this fragmentation makes it harder for governments, donors, and local organizations to coordinate around shared priorities and speak with one voice on needed policy reforms, leaving partner countries to tackle large, interconnected crises in isolation rather than at a landscape level. 

Practitioners across all five primary focus countries observed that organizations pivoted toward private-sector business models to survive. However, multiple project directors and technical specialists emphasized that pure-profit markets generally will not absorb the risk of difficult, low-margin environmental work, from climate resilience to ocean plastic pollution, on their own. Private-sector partners and former donor officials explained that USAID's catalytic "first-loss" grants had previously covered that risk, giving private investors the confidence to enter high-risk, conflict-affected territories. Once those grants disappeared, investors retreated. In Kenya, one project leader described how a USAID-backed revolving fund used catalytic capital and technical assistance to unlock affordable climate finance for marginalized farmers and enterprises in the arid north. But after USAID's operational subsidy was withdrawn, the fund could no longer offer the technical assistance that helped lenders design loan products for small farmers and enterprises, or the grants that rewarded lenders for expanding credit to marginalized groups. The fund had to raise its interest rate from 5% to 8.5%, thereby pricing out many of the climate-resilient investments it was designed to support. The fund was using U.S. development assistance to build a bridge to domestic commercial finance, which is critical for moving beyond traditional aid models. 

Interviewees across all focus countries perceived that the dismantling of U.S. assistance for environment and climate outcomes carried geopolitical consequences, stripping embassies of ground-level intelligence and ceding critical strategic territory to authoritarian competitors. By replacing collaborative, "development-first" partnerships with transactional diplomacy, practitioners argued that the U.S. surrendered its unique soft-power leverage. Philanthropic partners, former agency officials, and media analysts warned that this strategic retreat emboldens anti-democratic regimes, leaves security vacuums in volatile border regions, and allows competitors like China to expand their influence over strategic resources and infrastructure without requiring rigorous environmental safeguards. In Vietnam, a project leader warned that withdrawing support for community forest governance left one of the world's largest reservoirs of rare earth elements highly vulnerable to Chinese-influenced illegal mining and export.

While the global survey data validates that systemic self-reliance is not materializing on a large scale, interviewees observed that the massive historical investments in capacity building have left a resilient legacy of highly skilled human capital and isolated bright spots. Where continuation does occur, practitioners lamented that it is frequently sustained by voluntarism rather than by any coordinated system connecting governments, funders, and local organizations, the kind of coordination that used to depend on a central convener like USAID and that no single actor has stepped in to replace. However, multiple implementing partners stated that decades of rigorous capacity building equipped a formidable cadre of local professionals, proactive partner governments, and market-driven grassroots enterprises with the tools and training to internalize environmental programs and pursue independent action. In Peru, the National Water Authority stepped into a new policy leadership role in freshwater management. At the same time, Profonanpe, the country's National Environment Fund, established its own water resources division and used USAID's technical tools to mobilize private-sector investments for watershed conservation.