Key Points:
- Janet Yellen emphasized the need for $3 trillion annually until 2050 for a global low-carbon transition.
- The transition is seen as the 21st century’s greatest economic opportunity. Addressing climate change is crucial for both environmental and financial stability.
- Wealthy nations mobilized $116 billion for climate finance in 2022, with contributions from multilateral development banks.
- U.S. commitment to sustainable development in the Amazon region.
U.S. Treasury Secretary Janet Yellen emphasized the monumental financial requirement for the global transition to a low-carbon economy, estimating a need for $3 trillion in new capital annually until 2050. Speaking in Belem, Brazil’s gateway to the Amazon, Yellen framed this transition as the 21st century’s greatest economic opportunity, surpassing current annual financing levels.
Addressing the urgency of climate action, Yellen reiterated that reaching net-zero emissions is a paramount objective for the Biden-Harris administration. She stressed that effective climate policy extends beyond environmental benefits, fundamentally impacting economic stability and growth. “Neglecting to address climate change and the loss of nature and biodiversity is not just bad environmental policy. It is bad economic policy,” she stated, following her attendance at the G20 finance leaders meeting in Rio de Janeiro.
Wealthy nations mobilized a record $116 billion for climate finance in 2022, with 40% of these funds channeled through multilateral development banks (MDBs) such as the World Bank and the Inter-American Development Bank (IDB). Yellen noted that these institutions are setting new targets to enhance their commitment to climate finance.
Janet Yellen described the $3 trillion annual financing need as a pivotal economic opportunity, highlighting its potential to drive sustainable and inclusive growth, particularly for investment-starved nations. She met with finance ministers from Amazon basin countries during her visit to Belem. This initiative aims to foster sustainable development at Amazon through financing, project preparation, and collaboration.
“We are hopeful that this program will incentivize greater private-sector investment in the region that supports nature,” Yellen added. She has been advocating for MDBs to expand their missions and lending capacity to include climate change mitigation. Although progress has been made, she emphasized the crucial role of massive private investment. The Treasury, Brazil’s finance ministry, and other stakeholders are actively working to enhance private sector engagement.
Janet Yellen urged MDBs to develop new business models that mobilize investments supporting nature and biodiversity while strengthening economies and advancing climate transitions. On Saturday, she launched a new initiative with Amazon basin countries—Brazil, Colombia, Ecuador, Guyana, Peru, and Suriname—to combat nature crimes like illegal logging and wildlife harvesting, which threaten biodiversity and the Amazon ecosystem.
