Yellen stepping up financial pressure for climate goals

Treasury Secretary Janet Yellen used a trip to Europe to outline plans to press multilateral development banks and domestic regulatory agencies to counter climate change.

Yellen, who spent most of the weekend in Venice, Italy, along with finance ministers from the G-20 nations, addressed the climate during the Venice International Conference on Climate.

She vowed to convene the heads of multilateral development banks to push for a stronger effort on combating climate change and to reiterate the United States's expectation that they “align their portfolios with the Paris Agreement and net-zero goals as urgently as possible.”

“We also expect them to take steps to more effectively mobilize private capital so that developing countries can increasingly benefit from private-sector pledges to support climate-aligned and sustainable investments,” Yellen added.

During his speech at the conference, World Bank Group President David Malpass vowed to dedicate an average of 35% of the bank’s financing over the next five years to the climate.

Yellen said, in response to an executive order President Joe Biden signed about climate-related financial risk, the Financial Stability Oversight Council, a group of top U.S. financial regulators that Yellen leads, will assess the risk that climate change poses to the financial security of the U.S. She said the FSOC will work to advance the disclosure of climate-related financial risks.

“President Biden has recognized that this is a major problem that needs to be tackled now,” she said. “Treasury is also working closely with our domestic regulators as we engage in international discussions to promote effective and consistent approaches to disclosure.”

She told the conference that the administration is committed to reducing U.S. emissions from 2005 levels by at least 50% by 2030, and there is a “new consensus” surrounding plans to meet a significant part of that goal.

The U.S. is working toward building thousands of miles of new renewable-energy transmission lines, upgrading the country’s power infrastructure, and greener transportation through increasing U.S. manufacturing of zero-emission vehicles, Yellen said.

She said that because developing countries are more vulnerable to the effects of climate change, the U.S. has increased its efforts around the goal of mobilizing $100 billion per year from both public and private sources to help developing countries with climate change mitigation and adaptation efforts.

Yellen pointed out that, earlier this year, the U.S. released an International Climate Finance Plan. She said that the U.S. intends to double its annual public climate finance for developing countries by 2024 and triple public finance for climate adaptation. She said that doing so would result in some $5.7 billion each year in climate finance by 2024.