U.S. Treasury Secretary Janet Yellen Emphasizes the Economic Opportunity in Climate Investment
On Saturday, U.S. Treasury Secretary Janet Yellen highlighted the urgent need for $3 trillion in annual funding to facilitate the global shift to a low-carbon economy by 2050. This figure vastly surpasses current financing levels but represents the greatest economic opportunity of the 21st century, according to Yellen.
Speaking in Belem, the gateway to Brazil's Amazon, Yellen reiterated the Biden-Harris administration's commitment to achieving net-zero emissions, stressing that this objective requires global leadership. "Failing to address climate change and the loss of biodiversity is not only poor environmental policy but also detrimental economic policy," Yellen stated following a G20 finance leaders meeting in Rio de Janeiro.
In 2022, wealthy nations mobilized a record $116 billion for climate finance to assist developing countries, with 40% of these funds sourced from multilateral development banks (MDBs). Yellen noted that institutions like the World Bank and the Inter-American Development Bank (IDB) are now setting new financing targets.
Yellen emphasized that the need for climate financing presents "the single-greatest economic opportunity of the 21st century." She suggested that this opportunity could support sustainable and inclusive growth, particularly benefiting investment-starved countries.
During her visit to Belem, Yellen engaged with finance ministers from Amazon basin countries and IDB President Ilan Goldfajn. She reaffirmed the U.S. commitment to the IDB's Amazonia Forever platform, which promotes sustainable development in the Amazon through financing, project preparation, and collaboration. "We hope this program will encourage greater private-sector investment in nature-supportive initiatives," she added.
Yellen has been advocating for MDBs to expand their missions and lending capacity to include climate change efforts for nearly two years. She stated that this objective is now ingrained in their operations, but emphasized that substantial private investment is necessary. The U.S. Treasury, Brazil's finance ministry, and other stakeholders are working to enhance private sector engagement.
Furthermore, Yellen called for MDBs to develop new business models that attract investments supporting nature and biodiversity, while also strengthening economies and advancing climate transitions.
Earlier on Saturday, Yellen announced a new initiative with Amazon basin countries—including Brazil, Colombia, Ecuador, Guyana, Peru, and Suriname—to combat environmental crimes such as illegal logging and wildlife trafficking, which threaten the region's biodiversity and ecosystem.