210723 Yellen
US Treasury Secretary Janet Yellen is calling in help from financial institutions to turn the tide on climate change. Image Credit: Reuters

Washington: US Treasury Secretary Janet Yellen told the heads of the World Bank and other multilateral development banks (MDB) to come up with concrete plans to mobilize significantly more capital to fight climate change and support emission reduction goals.

The Treasury said in a statement that Yellen, White House climate envoy John Kerry and the heads of the major development banks discussed ways to “maximize” private capital for climate change finance and re-evaluate the banks’ internal incentives and practices toward that end.

“Secretary Yellen encouraged the MDBs to increase their focus on climate adaptation, particularly through private-sector operations, and to support developing countries in implementing ambitious emissions reduction measures and protecting critical ecosystems,” the Treasury said.

Yellen will reconvene the group “to discuss their concrete plans in October” on the sidelines of the World Bank and International Monetary Fund annual meetings. Among potential initiatives discussed at the meeting were banks’ moving beyond their traditional development finance to help countries develop green bond markets and create “enabling environments” to attract more private climate investments.

Read More

Wide representation

In addition to the World Bank Group, the institutions participating in the meeting were the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank.

World Bank President David Malpass tweeted that there was “a good discussion of climate change” during the meeting. “A sense of urgency on climate action is vital as we address challenges of transition, electricity access & private sector mobilization for mitigation/adaptation.” Yellen had said at a G20-related climate conference in Venice, Italy, that she would ask the institutions “to increase their climate ambitions” to support the 2015 Paris Agreement to slash carbon emissions.

Yellen, asked by Reuters in an interview last week whether she would direct MDBs to stop financing of fossil fuel projects, said: “I think our position likely is going to be that where there are alternatives, we wouldnt endorse certainly coal — coal-fired facilities — and we have strong preference for environmentally friendly projects.