US seeks to increase scale of climate finance: Yellen

The US is seeking to increase the scale of climate finance and working with the international community to tackle climate change, US Treasury Secretary Janet Yellen said on Tuesday.

“Climate, by its very nature, requires strong global cooperation. We lost four important years, and we recognize that many of you around the room have been leading change in your own countries,” Yellen said at her first meeting with the Coalition of Finance Ministers for Climate Action, adding that the US was pleased to join the coalition last week, the Xinhua news agency reported.

“Finance ministries have a vital role to play, and there is much that we can learn from each other about how to integrate climate into our financial planning and decision-making,” she said.

Yellen said that the US Treasury is working through the US Financial Stability Oversight Council and participating in international forums to understand and mitigate the risks that climate change poses to the stability of the financial system and macroeconomy in the US and across jurisdictions.

“We are also supporting international efforts to better identify climate-aligned investments and encourage financial institutions to credibly align their portfolios and strategies with the objectives of the Paris Agreement,” she said.

Meanwhile, the US Treasury is working with the White House, Congress and others to ensure that domestic economic programs and tax policies support US climate goals, including building climate-resilient infrastructure and facilitating a transition to a decarbonised economy, according to Yellen.

“We are seeking to increase the scale of climate finance and use these tools to leverage additional private investment,” she said.

Yellen also said that she is pleased to co-chair the Group of 20’s newly re-established sustainable finance group, which provides an important venue to tackle these issues and promote finance that supports international climate and other sustainability goals.

Yellen’s remarks came after the US Federal Reserve has created two new panels to assess climate-related financial risks as climate change could have severe economic and financial impacts.

“Financial market participants that do not put in place frameworks to assess and address climate-related risks could face significant losses on climate-sensitive assets caused by environmental shifts, by a disorderly transition, or both,” Fed governor Lael Brainard said last month.