Executive Summary 

• The world is seeing a shift away from ambitious climate mandates and goals: The Paris Agreement’s implementation is losing momentum, the United Nation’s global shipping carbon tax has stalled, and major economies are softening their electric vehicle mandates.  
• These developments reflect that big climate mandates are costly, and it is challenging to reach international climate mitigation agreements in the existing fragmented geopolitical landscape – let alone implement them.  
• The next few years are likely to see more incremental and piecemeal climate policies and targets at the national and sub-national levels instead of big and ambitious climate regulations.  

Introduction 

The world is seeing a shift away from ambitious climate mandates and goals. The Paris Agreement’s implementation is losing momentum, the United Nation’s (UN) global shipping carbon tax has stalled, major economies are softening their electric vehicle mandates, and some of the world’s leading climate philanthropists are changing strategies.   

These developments reflect that big climate mandates are costly, and it is challenging to reach an international climate mitigation agreement in the existing fragmented geopolitical landscape – let alone implement them.    

The next few years are likely to see more incremental and piecemeal climate policies and targets at the national and sub-national levels instead of big and ambitious climate regulations.   

This insight provides an overview of the significant recent developments in international climate policy and what they likely portend for such policies in the near future.  

Recent Major Developments in Climate Policy 

The Paris Agreement has lost momentum  

A new UN report shows countries have made very limited progress toward the climate goals in the Paris Agreement—an international treaty adopted in 2015 by 195 jurisdictions aimed to limit global warming to 1.5°C above pre-industrial levels by the end of the century.  

Under the agreement, countries are expected to submit their updated climate action plans every five years—the idea is to have more ambitious plans over time. Yet a decade after the adoption of the agreement, only 64 countries, about one third of the total countries, submitted their climate plans. The UN report acknowledges that the report itself is “limited in scope” and that “it is not possible to draw wide-ranging global-level conclusions or inferences from this limited data set.” 

The report projects that if the 64 countries implement their plans successfully, their emissions would decline by 17 percent by 2035 compared to the 2019 level, which is significantly short of the 37 percent required to meet the goals in the Paris Agreement. Notably, the 64 new climate plans include one submitted by the Biden Administration but that will not be implemented by the Trump Administration.  

Global shipping carbon tax stalled 

Last month, the UN International Maritime Organization (IMO) failed to officially adopt the global carbon tax on shipping emissions which was agreed upon in a meeting in April this year. Instead, IMO decided to delay the decision on whether to adopt the policy by a year.  

American Action Forum’s (AAF) previous analysis provided a detailed overview of the policy—a fuel standard and a two-tiered carbon tax, as well as awarded and transferable tax credits that can be carried forward.  

This setback in the global shipping carbon tax was not a surprise, as the Trump Administration doubled down its opposition to the policy by releasing a statement through the Department of State the week before the October IMO meeting, threatening to retaliate against countries that support the policy with a variety of actions including imposing port fees, sanctions on officials, and investigating into potential anti-competitive practices.  

Major economies soften targets on EVs 

In the United States, the 2025 One Big Beautiful Bill Act repealed all the electric vehicles (EV)-related tax credits established in the Inflation Reduction Act (IRA). As of the end of September 2025, all EV tax credits included in the IRA have expired. AAF’s previous analysis concludes that this is an improvement to the IRA’s energy provisions as the EV tax credits are complex, inefficient, and costly.  

Other major economies have followed the United States’ lead in rolling back policy support for EVs. Canada recently paused its 2026 EV sales mandate, which would have required 20 percent of new car sales to be EVs. The United Kingdom has maintained its 2030 Zero Emissions Vehicle mandate but has updated it to allow car manufacturers more flexibility to comply with the mandate. The European Union is under tremendous pressure to revise its 2035 EV mandate, with Germany and Italy recently jointly calling for easing the mandate.  

Climate philanthropists change strategies  

Bill Gates, a major advocate and donor for addressing climate change, recently published a letter calling for a new strategy to tackle climate issues. In the letter, Gates criticized the “doomsday view” of climate change—he believes that climate change will not lead to the end of civilization as some climate advocates have claimed. While emphasizing that climate change is a serious problem, Gates argues that it is imperative not to over-allocate resources to climate issues at the expense of funding for economic development and public health. For context, Gates has spent billions of dollars on climate-related projects including public policy, technology innovation, and climate adaptation. In March 2025, Breakthrough Energy, an organization funded by Gates to address climate issues, made significant budget cuts mostly driven by the Trump Administration’s shift away from decarbonization goals and policies.  

Gates is not the only philanthropist that has cut back funding for climate issues. The Children’s Investment Fund Foundation, a London-based foundation, has decided to pause providing funding to U.S. non-profit organizations for climate issues due to the uncertainties in the Trump Administration’s treatment of the tax-exempt status of non-profit organizations. 

What Are the Takeaways? 

Massive mandates distort the market significantly and make it costly for both businesses and consumers to decarbonize. Arbitrary command-and-control emissions regulations such as the EV mandates are inefficient because they do not allow businesses to reduce emissions at the lowest cost compared to alternative policies such as a carbon tax. Additionally, regulators do not have all the information on the latest technological development, which makes it difficult to update the mandates to respond to technological changes.  

Adopting an international agreement on climate mitigation in the existing fragmented geopolitical landscape is difficult. IMO’s decision to delay its vote on whether to officially adopt a global shipping carbon tax indicates how challenging it is. Individual countries’ considerations of domestic economic and political priorities affect their calculations on whether to join the international agreement. The timing of the IMO vote makes it especially tough, given the uncertainties from the Trump Administration’s sweeping tariffs on the rest of the world and concerns of retaliation from the United States.  

Conclusion 

It is difficult enough for a large number of countries to commit to a uniform climate target. But even if an agreement is reached, there is still much work to be done on design, implementation, and enforcement—as is clearly evidenced by the limited progress on the Paris Agreement a decade after its adoption.  

With the global trend of shifting away from big climate goals and mandates, the next few years are likely to see more incremental and piecemeal climate policies and targets at the national and sub-national levels.