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From GREEN ENERGY - BELEM, BRAZIL - U.S. Treasury Secretary Janet Yellen stated that the global transition towards a low-carbon economy requires funding up to US$ 3 trillion.
This new funding or capital is needed annually until 2050. Yellen noted that this figure is far above the current annual financing.
However, filling this gap presents the greatest economic opportunity of the 21st century.
Yellen made these remarks in Belem, Brazil on Saturday (27/7), a gateway city to the Amazon rainforest in Brazil.
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She emphasized that achieving net-zero emissions remains a top priority for the U.S. administration under President Joe Biden and Vice President Kamala Harris, and this will require leadership that extends far beyond U.S. borders.
"Ignoring climate change and the loss of nature and biodiversity is not just bad environmental policy. It's bad economic policy," Yellen said in her speech after attending a meeting of G20 finance leaders on Thursday and Friday in Rio de Janeiro.
Developed countries have pledged to provide and mobilize $116 billion in climate funding for developing countries in 2022, 40% of which comes from multilateral development banks (MDBs).
Yellen also stated that banks, including the World Bank and the Inter-American Development Bank (IDB), should set new targets with this increased funding.
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The need for funding is the "greatest economic opportunity of the 21st century" and can be leveraged to support sustainable and more inclusive growth, including for countries lacking investment, she said.
While in Belem, Yellen met with finance ministers from Amazon basin countries and IDB President Ilan Goldfajn.
She reaffirmed the U.S. commitment to the bank's Amazonia Forever platform, which provides a holistic approach to sustainable development in the region through funding, project preparation, and collaboration.
"We hope this program will provide incentives for greater private sector investment in nature-supporting areas," she added.
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Yellen called on MDBs nearly two years ago to expand their mission and lending capacity to include efforts to combat climate change. She said this "has now become part of their DNA," but large private investment is needed, and the Treasury Department, Brazil's Ministry of Finance, and other stakeholders are working to increase engagement with the private sector.
She said banks also need to catalyze new business models to mobilize investments that support nature and biodiversity while strengthening the economy and advancing the climate transition.
Earlier on Saturday, Yellen launched a new initiative with countries in the Amazon basin, Brazil, Colombia, Ecuador, Guyana, Peru, and Suriname, to combat environmental crimes, such as illegal logging and wildlife and mineral harvesting, which threaten the biodiversity and ecosystem of the Amazon.
