“Climate change presents the US economy with new challenges and opportunities,” said Yellen on Monday. “The grave consequences of our actions require the Treasury Department to give top priority to climate change.”
The news of Yellen’s election immediately angered environmental activists who want the Biden administration to take a tougher line with Wall Street firms that fund fossil fuel producers. Many of them had urged the Treasury Department to hire former Deputy Treasury Secretary and Fed Governor Sarah Bloom Raskin, who has called for greater regulation of the climate-related activities of financial firms.
“In order to prevent US banks, insurers and asset managers from fueling climate risk, all available regulatory tools and the experience of maneuvering the Wall Street pushback must be used decisively,” said Jason Opeña Disterhoft, senior climate and energy activist at Rainforest Action Network. “By choosing someone with no regulatory track record, the Biden administration appears to have stumbled over the first hurdle.”
Why it matters: The long-awaited take on Yellen during her January Senate confirmation hearing is the latest example of President Joe Biden’s “state-wide” approach to climate change.
The Treasury Department has planned the news with an international climate summit that Biden will host on Thursday and Friday. This is expected to focus on the role of the financial system in global warming and the potential risks.
On Monday, the Treasury Department also outlined the department’s climate goals, including:
– “Mobilizing financial resources for climate-friendly investments at home and abroad and prioritizing the accelerated transition of high-emitting sectors and industries”
– “Using economic and tax policy to support the development of a climate-resilient infrastructure and to ensure the transition to a decarbonised net-zero economy”
– “Ensure that environmental justice considerations are central to programs, policies and activities”
– “Ensure that policies in support of the transition to a low-carbon economy are broadly fair and equitable and support well-paying jobs”
– “Understand and mitigate the risks climate change poses to the stability of the US and global financial systems and the global economy”
What’s next: Biden plans to publish a comprehensive executive order that will outline the steps federal agencies must take to address climate-related financial risks to government and business.