Great economic opportunity for taxpayers - chipping in a few trillion tosave the planet!
"the transitionto a lower-carbon global economy is also the single greatest economic opportunity of thetwenty-first century. The transition will require no less than$3 trillion in new capital from many sources each year between now and2050."
Here’s the maths.
2025 - 2050 = 26 years X $3 trillion/year = $78,000,000,000,000
For the weather.
Money well spent.......
Good afternoon. I am very glad to be here at theGoeldi Museum with Inter-American Development Bank President Ilan Goldfajn andGovernor Helder Barbalho and to have spent the day engaging with ministers fromthe region and leaders from the IDB and the private sector. I have seen todayand throughout my week in Brazil the value of three key aspects of the TreasuryDepartment’s approach to advance the Biden-Harris Administration’sinternational climate and nature and biodiversity agenda: strengtheningrelationships with allies and partners; making the international financialarchitecture work better for countries; and harnessing the power of markets.
But before I speak about each of these aspects, letme step back. Here in Belém, with the Amazon rainforest close by, theimportance of our collective work is palpable and undeniable.
Climate change poses a daily and existential threatto individuals, communities, and countries. It harms human health, damageshomes and businesses, and strains government budgets. It poses risks acrosssectors of our economies, from agriculture to infrastructure. And the harshreality is that the people and countries with fewer resources to prepare andrespond often must bear even greater costs.
In the Amazon and elsewhere, we also see anotherconcerning trend: the unprecedented and accelerating loss of nature andbiodiversity. Like climate change, this loss has wide-ranging impacts, fromdriving migration and fragility to increasing food and water insecurity. And weare in a vicious cycle: Climate change accelerates nature and biodiversityloss, while this loss turns carbon sinks into carbon sources and eliminatesnatural infrastructure that supports resilience to climate change.
Put simply, neglecting to address climate changeand the loss of nature and biodiversity is not just bad environmental policy.It is bad economic policy.
But being so close to the magnificent Amazon isalso a reminder that the transition to a lower-carbon global economy is alsothe single greatest economic opportunity of the twenty-first century. Thetransition will require no less than $3 trillion in new capital from manysources each year between now and 2050. This can be leveraged to supportpathways to sustainable and inclusive growth, including for countries that havehistorically received less investment.
So the Biden-Harris Administration has madesupporting the transition to net zero a top priority, and the TreasuryDepartment is playing a key role. At home, we are implementing the InflationReduction Act, the most significant climate legislation in our nation’shistory. It is driving hundreds of billions of dollars of investments in theclean energy technologies and industries that will propel us toward our climategoals and fuel our economic growth. We launched the Net-Zero Principles forFinancing and Investment to provide guidance to U.S. financial institutionspursuing net-zero commitments. And we and other federal agencies together putforward Principles for Responsible Participation in Voluntary CarbonMarkets.
Our ambitions at home are matched by our ambitionsabroad. We know that we can only achieve our climate and economic goals—fromreducing global emissions to adapting and building resilience, fromstrengthening markets to bolstering supply chains—if we also lead efforts farbeyond our borders. So let me talk about the tools we’re using to achieve thesegoals, starting with strengthening relationships with our allies and partners.
I. STRENGTHENINGRELATIONSHIPS WITH OUR ALLIES AND PARTNERS
Since the start of this Administration, PresidentBiden has focused on deepening ties with allies and partners around the world,including to pursue joint work on climate. From South America to Asia, we haveadvanced initiatives that bring us closer to achieving our climate goals andbenefit all of our economies.
When I visited an American company’s lithiumconversion plant in Antofagasta, Chile this spring, I saw firsthand the productof our efforts to bolster critical minerals supply chains. IDB’s ongoing workto assess bottlenecks and opportunities will support enhancing competitivenessand attracting investment across Americas Partnership for Economic Prosperitycountries.
We have worked with international partners tolaunch ambitious Just Energy Transition Partnerships with Indonesia, SouthAfrica, and Vietnam to accelerate their just transitions and strengthen theireconomies. We are now seeing financing start to flow to support policy changesand projects.
We have also focused on making sure climate is highon the agendas of finance ministries—from together learning how to integrateclimate risks into our macroeconomic models to jointly realizingclimate-related opportunities.
Earlier this month, the United States announcedthat we will provide $50 million to Brazil’s Amazon Fund this year, the firstinstallment of President Biden’s $500 million commitment. Just this week,Treasury launched a partnership with Fazenda to strengthen our collaboration onadvancing effective climate action. Our work will span from bolstering cleanenergy supply chains to collaborating on carbon market integrity principles;from developing innovative solutions to protect nature and safeguardbiodiversity to strengthening the climate finance architecture. This willinclude a focus on debt-for-nature swaps, which Treasury has conducted for 25years, supporting 23 debt treatment agreements with 14 countries that havesignificant tropical forests or coral reefs, including many in Latin America.We are now working to develop principles that can drive the deployment of thistool to support countries around the world.
II. MAKING THEINTERNATIONAL FINANCIAL ARCHITECTURE WORK BETTER FOR COUNTRIES
Treasury has also been focused on making theinternational financial architecture—both individual aspects and the system aswhole—work better for countries. We cannot sustain progress on reducing povertyor achieve the sustainable development goals without more and better supportfor climate mitigation, adaptation, and resilience. So we need anarchitecture—from the multilateral development banks, to the climate andenvironment trust funds, to the IMF’s Resilience and Sustainability Trust—thatworks as a system to deliver, at speed and at scale, the financial, technical,and policy assistance that developing countries need to achieve theirsustainable development and climate goals.
Three years ago, shortly after taking office, Iconvened the heads of the MDBs to encourage them to significantly raise theirclimate ambitions and to discuss concrete actions they could take to mainstreamclimate change in their operations. Just under two years ago, I called forevolving the MDBs. Progress has since accelerated. The World Bank, includingthanks to President Banga’s leadership, is now confronting the reality ofclimate change, putting it at the center of the Bank’s agenda, and providinggreater resources to tackle it. The regional development banks, including theIDB, have stepped up as well.
As we now work to set new targets for climatefinance, we build on developed countries having provided and mobilized a recordalmost $116 billion in climate finance for developing countries in 2022. 40percent of this was through the MDBs, which increased their climate finance bymore than 20 percent from 2021 to 2022.
And addressing climate change is now part of theMDBs’ DNA. They are better equipped to include climate impacts in diagnostictools and to provide targeted incentives for climate projects. They are workingtowards aligning all projects with Paris Agreement goals and screening allprojects for adaptation. Countries are benefitting from a broader suite oftools to respond to climate-related shocks and crises. And we see greaterinnovation and responsiveness across the system—from enabling exceptionalaccess to financing for high income small island developing states to pilotingclimate resilient debt clauses.
The MDBs have also scaled up work on nature andbiodiversity, as was clear in the meeting the IDB hosted earlier today. Wehelped drive reforms at the IDB, including a new business model for its privatesector arm, IDB Invest, that includes a focus on climate and nature andbiodiversity. And we were proud to partner with the IDB to create the AmericasPartnership Fund for Nature to finance technical support for nature-basedsolutions.
The climate funds have also been critical to workon climate and nature and biodiversity. The Global Environment Facility, towhich the U.S. has been a leading contributor from the start, has dedicatedbillions to conservation, as one of many powerful examples. And we have madegreat strides so that these funds better deliver for recipient countries, fromimprovements at existing funds such as shortening approval times tooperationalizing the new Fund for responding to Loss and Damage.
As we look ahead, we will continue to support workat the MDBs on climate and nature and biodiversity, from developing outcomemetrics that drive meaningful results as opposed to just dollars out the doorto pioneering new models for investing in ecosystems. At the climate funds, weare encouraged by the action plan the funds themselves are developing and bythe review of the Independent High-Level Expert Group under Brazil’s G20leadership. We look forward to supporting next steps to make these funds more efficient,effective, and accessible to developing countries. And we will continue toinsist that investments in climate and nature and biodiversity, like allinvestments, reflect strong environmental and social safeguards and respectIndigenous Peoples’ way of life and expertise.
III. HARNESSING THEPOWER OF MARKETS
I will end by emphasizing a third key aspect of ourapproach: our commitment to harness the power of markets to advance the climatetransition and to capitalize on massive economic opportunities.
As we implement the IRA and see a boom in privatesector investment in clean energy industries across the United States, Americancompanies are also pursuing global opportunities. Here in Brazil, Amazon andMicrosoft are making significant investments in renewable energy such as solarand wind and supporting forest restoration, among many other examples acrossthe region.
We are focused on supporting private sectorengagement through strengthening our relationships with allies and partners, asthe new Fazenda-Treasury Partnership prioritizes crowding in more privateinvestment to finance climate transitions.
And private capital mobilization has been part ofour agenda at the MDBs and the climate funds. The World Bank is designing a newsecuritization platform geared towards institutional investors, who controltrillions in assets globally, and launched a new platform expected to tripleguarantee issuances to $20 billion per year by 2030, enabling lower cost,longer-duration private financing flows. The Climate Investment Funds hasdeveloped a Capital Markets Mechanism.
We have also started new initiatives. In 2022,President Biden and G7 leaders launched the Partnership for GlobalInfrastructure and Investment, which has funded and mobilized tens of billionsin investments, including in renewable energy access. And yesterday I joinedInvestor Leadership Network partners to announce a new Emerging MarketsTransition Debt initiative that will increase institutional investors’ climate-and development-aligned investment in emerging markets.
We see too that harnessing the power of marketsdepends not just on supporting a pipeline of opportunities but on providingguidance that shapes behavior. Building on our work at home on the Net-ZeroPrinciples for Financing and Investment, we are now working through the G20Sustainable Finance Working Group to develop high-level principles forfinancial institution and corporate transition plans. And following ourPrinciples for Responsible Participation in Voluntary Carbon Markets, theFazenda-Treasury Partnership will include exchanges on carbon market integrityprinciples to help strengthen these markets across the world’s largestfinancial market, the United States, and the world’s carbon sink here in theAmazon.
IV. CONCLUSION
Ultimately, through strengthening relationships,making the international financial architecture work better for countries, andharnessing the power of markets, we’re making progress toward tackling climatechange, the loss of nature and biodiversity, and related challenges. We arecontinuously working to mitigate risks to our economy and capitalizing on neweconomic opportunities. Here in Belém, as we look toward COP30, we celebratethe progress we have made and renew our commitment to doing all we can in themonths and years ahead.
This work is complex and challenging. But I comeaway from today’s engagements with the belief that we collectively have theambition, willingness to collaborate, and are developing the tools to secure abetter future for our planet and for all our people. Thank you for being heretoday.
