Yellen says $3T of fresh capital is needed annually to fight climate change

U.S. Treasury Secretary Janet Yellen on Saturday said that $3 trillion in new capital is required each year to combat climate change, and deemed the global transition to a low-carbon economy “the single greatest opportunity of the 21st century.”

Speaking in Belém, Brazil, after meeting with G20 finance ministers to discuss economic development this week, Yellen emphasized the need for stronger climate finance policies through 2050 to address the “existential threat” to communities and economic strain posed by climate change.

“Neglecting to address climate change and the loss of nature and biodiversity is not just bad environmental policy. It is also bad economic policy,” she said.

The speech, delivered as part of an event by the Inter-American Development Bank, reaffirmed the U.S. commitment to the IDB’s Amazonia Forever program on its first anniversary, a project intended to promote sustainable development in the Amazon region and defend against deforestation.

Yellen urged coordination between the U.S. and countries like Brazil, Colombia and Ecuador to achieve global climate and economic goals — working within and across countries to catalyze investment in agriculture and infrastructure projects.

Earlier Saturday, at a roundtable with IDB President Ilan Goldfajn and finance ministers in Belém, the Treasury secretary unveiled the Amazon Region Initiative Against Illicit Finance, a program that aims to obstruct the financing of so-called nature crimes, such as illegal logging and mining, that threaten biodiversity in the region.

“Nature crimes generate hundreds of billions of dollars of illicit revenue while harming local communities and threatening critical ecosystems,” Yellen said. “These crimes fuel corruption and destabilization wherever they occur.”

Yellen added that the Treasury Department is playing a key role in supporting the transition to net zero in the U.S., a priority of the Biden administration. She credited the Inflation Reduction Act for driving hundreds of billions of dollars of investment in clean energy technologies.

“Our ambitions at home match our ambitions abroad,” she said.