White House officials cautioned that details were still being hammered out and that, although close, the decision on withdrawing from the international accord - agreed to by nearly 200 countries in Paris in 2015 - was not finalized.
Trump, who has previously called global warming a hoax, did not confirm the decision in a post on Twitter, saying only, "I will be announcing my decision on the Paris Accord over the next few days."
The source, speaking on condition of anonymity, said Trump was working out the terms of the planned withdrawal with U.S. Environmental Protection Agency Administrator Scott Pruitt, an oil industry ally and climate change skeptic.
"The president will make an announcement when he’s made a final decision," one senior official said. Trump has changed his mind on large decisions before, even after previously signaling a move in the opposite direction.
Trump refused to endorse the landmark climate change accord at a summit of the G7 group of wealthy nations on Saturday, saying he needed more time to decide.
A U.S. decision to withdraw from the accord could further alienate American allies in Europe already wary of Trump and call into question U.S. leadership and trustworthiness on one of the world's leading issues. A pullout also would be one more step by the Republican president to erase the legacy of his predecessor, Democrat Barack Obama, who helped broker the accord and praised it during a trip to Europe this month.
A withdrawal would put the United States in league with Syria and Nicaragua as the world's only non-participants in the Paris agreement. It could have sweeping implications for the deal, which relies heavily on the commitment of big polluter nations to reduce emissions of gases scientists blame for sea level rise, droughts and more frequent violent storms.
The United States is the world's second-biggest carbon dioxide emitter behind China.
The accord aims to limit planetary warming in part by slashing carbon dioxide and other emissions from the burning of fossil fuels. Under the pact, the United States committed to reduce its emissions by 26 to 28 percent from 2005 levels by 2025.
Environmental groups derided the Trump administration's reported decision. The Sierra Club said a U.S. withdrawal from the Paris deal would be a "historic mistake." Friends of the Earth said it would make America the world's "foremost climate villain."
International leaders began reacting to the reports of Trump's plans.
A withdrawal by the United States would be disappointing but the European Union stands ready to take global leadership on the issue, European Commission Vice President Maros Sefcovic said in Brussels.
"There is a much stronger expectation from our partners across the world, from Africa, Asia and China, that Europe should assume leadership in this effort and we are ready to do that," Sefcovic added.
France's ambassador to the United States, Gerard Araud, said on Twitter that the Paris agreement "doesn't infringe on U.S. sovereignty" and noted that major American corporations had supported the deal.
Finland's Prime Minister Juha Sipila said a U.S. withdrawal would be a big setback, adding that "we must find partners to continue, because this work must not stop."
Trump had vowed during his 2016 presidential campaign to "cancel" the Paris deal within 100 days of becoming president as part of an effort to bolster U.S. oil and coal industries. That promise helped rally supporters sharing his skepticism of global efforts to police U.S. carbon emissions.
Trump has repeatedly expressed doubts about climate change, at times calling it a hoax to weaken U.S. industry. An overwhelming majority of scientists say humans' use of fossil fuels for energy is driving climate change.
Quitting the Paris accord may not resonate with members of Trump's Republican Party as much as his administration expects. A March Reuters/Ipsos opinion poll found that 50 percent of Republicans agreed that the U.S. should lead the global fight against climate change, while 37 percent disagreed and 13 percent were unsure.
Supporters of the climate pact are concerned that a U.S. exit could lead other nations to weaken their commitments or also withdraw, softening an accord that scientists have said is critical to avoiding the worst impacts of climate change.
Canada, the European Union, and China have said they will honor their commitments to the pact even if the United States withdraws. A source told Reuters that India had also indicated it would stick by the deal.
After taking office, Trump faced pressure to stay in the deal from investors, international powers and business leaders, including some in the coal industry. He also had to navigate a split among his advisers.
Senior adviser Steve Bannon, who wants Trump to focus on actions that will rev up his conservative political base, has long opposed the Paris accord. Jared Kushner, Trump’s son-in-law and top adviser, has come to the view that the standards set out in the agreement did not work for the U.S. economy and the question was whether to try to change those standards within the agreement or pull out, another senior administration official said.
Trump’s daughter, Ivanka, favors staying in, the official said, and has sought to ensure her father heard all sides in the debate.
Trump's administration has already begun killing Obama-era climate regulations.
Oil majors Shell and Exxon Mobil have also supported the pact along with a number of Republican lawmakers. Several big coal companies, including Cloud Peak Energy, had publicly urged Trump to stay in the deal as a way to help protect the industry's mining interests overseas, though others asked Trump to exit the accord to help ease regulatory pressures on domestic miners.
Both solar- and coal-related exchange traded funds were widely underperforming the overall stock market on Wednesday. FirstSolar fell more than 3 percent. Coal miners Arch Coal and Peabody Energy were both down more than 2 percent.
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