Government can leverage private spending to tackle climate change, says Yellen
It is the role of the federal government to take advantage of the way the private sector creates and distributes technology to slow climate change, Treasury Secretary Janet Yellen said on Tuesday.
“To make real progress on the climate, we need both public and private investment and things like charging stations, and a power grid that can properly manage renewable energy sources. These basic investments are essential to provide the infrastructure, the public infrastructure to support the incentives for private investments, ”she said.
Yellen make the remarks as part of the virtual spring meetings of the World Bank and the International Monetary Fund, which discussed a “green” recovery from the COVID-19 crisis. IMF improved its economic outlook in its Tuesday report.
Yellen continued, “We are also considering tax incentives to stimulate private R&D. I think technological change will be important and we want to encourage in a green direction. We see the potential of tax incentives for electric vehicles and the like, these are ways we hope to stimulate private sector investment, and there will be opportunities. You know, sometimes we think this is costly, but it’s really important to stress that the fight against climate change is going to provide investment opportunities for the private sector and our society. “
The Biden administration has linked climate change and renewable energy initiatives to a large infrastructure requires it to advance to Congress, with a proposed price of $ 2.25 trillion.
Speaking on the broader recovery, the Treasury Secretary said the lessons of the financial crisis were always in mind.
“We expect a quick recovery. I am optimistic we will return to full employment next year. And once we are, we’re going to turn to a longer term investment program: investing in infrastructure, in R&D, in people, ”Yellen said. “But globally, I think what we do nationally is beneficial to the entire global community, stronger growth in the United States is going to have a positive impact on the overall global outlook. And we are going to be careful to learn the lessons of the financial crisis, which is not to withdraw support too quickly. “
Yellen is also holding its first meeting with the Coalition of Finance Ministers for Climate Action, which the Biden administration joined last week.
Yellen said on Tuesday she was delighted to co-chair the newly re-established Group of 20 sustainable finance group, which she said would be an important approach to tackling climate-related issues.
Under his leadership, it was announced that the U.S. Treasury would play a pivotal role in a government-wide effort to meet an ambitious 2030 emissions target under the Paris climate agreement. Biden brought the United States back to the voluntary agreement adopted by many developed and emerging economies, overturning former President Trump’s withdrawal.
In a speech to the Chicago Council on Global Affairs Monday, Yellen said the Treasury will work to “promote the flow of capital to climate-aligned investments and away from carbon-intensive USO investments,
This position has already aroused the ire of some Republican members of Congress, who say it threatens the ability of the US oil and gas industry to access needed loans, which impacts their consumers and investors.
World Bank President David Malpass said on Tuesday his group was finalizing a new climate change action plan, which includes a big step forward in financing.
“Our plan identifies key priorities for action, with a focus on both adaptation and mitigation. It also includes a strong emphasis on a just coal transition, and we are working to align our financial flows with the goals of the Paris Agreement, ”he said.
IMF Managing Director Kristalina Georgieva praised the US infrastructure effort to fundamentally change the cure for climate change.
The IMF “focuses on climate-related financial stability risks, and we have a big role to play: standardized reporting on those risks, stress tests and a review of the role of supervisors,” Georgieva said. “We have an instrument with the World Bank, financial sector assessments. We integrate climate-related risks into these assessments.
The IMF is about to launch a climate change dashboard that would help policymakers see their growth, jobs and carbon intensity numbers in one place.