By David Lawder
BELEM, Brazil (Reuters) – U.S. Treasury Secretary Janet Yellen said on Saturday that the global transition to a low-carbon economy will require $3 trillion in new capital every year through 2050, far beyond current annual financing, but that filling the gap is the largest. economic opportunities of the 21st century.
Yellen said in Brazil’s Amazon gateway Belem (NASDAQ:) that achieving net-zero emissions goals remains a top priority for the Biden-Harris administration and will require leadership far beyond U.S. borders .
“Failure to tackle climate change and the loss of nature and biodiversity is not just bad environmental policy. It is bad economic policy,” Yellen said in a speech after attending a meeting of G20 financial leaders on Thursday and Friday in Rio de Janeiro.
Rich economies provided and mobilized a record $116 billion in climate finance for developing countries in 2022, 40% of which came from multilateral development banks (MDBs). Yellen said banks, including the World Bank and the Inter-American Development Bank (IDB), were setting new targets.
The financing requirement is “the greatest economic opportunity of the 21st century” and can be used to support sustainable and more inclusive growth, including for countries with a shortage of investment, she said.
In Belem, Yellen met with finance ministers from the Amazon countries and IDB President Ilan Goldfajn. She reaffirmed U.S. commitment to the bank’s Amazonia Forever platform, which provides a holistic approach to sustainable development in the region through financing, project preparation and collaboration.
“We are hopeful that this program will stimulate greater private sector investment in the region that supports nature,” she added.
Yellen called on MDBs nearly two years ago to expand their missions and lending capacity to include the fight against climate change. She said this is “in their DNA now,” but massive private investment was needed, and the Ministry of Finance, Brazil’s Ministry of Finance and other stakeholders were working to increase private sector engagement.
She said banks must also catalyze new business models to mobilize investments that support nature and biodiversity, while strengthening economies and promoting climate transitions.
Earlier on Saturday, Yellen launched a new initiative with Amazon countries Brazil, Colombia, Ecuador, Guyana, Peru and Suriname to combat wildlife crimes, such as illegal logging and harvesting of wildlife and minerals, that harm biodiversity and the Amazon ecosystem to threaten.
