The Treasury Department is creating a “climate hub” to prioritize policies that increase financing for clean energy and address climate-related risks to the economy.
Its creation fulfills a pledge Treasury Secretary Janet Yellen made during her confirmation hearings as part of a commitment to put climate change front and center at the agency. The announcement also comes as President Joe Biden is poised to issue a wide-ranging executive order directing several agencies, including the Treasury Department, to address climate-related risks to the financial system.
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Over the past few months, the Biden administration has already created climate teams at several other financial regulatory agencies, including the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
“The steep consequences of our actions demand that the Treasury Department make climate change a top priority,” Yellen said in a statement.
“Climate change requires economy-wide investments by industry and government as well as actions to measure and mitigate climate-related risks to households, businesses, and our financial sector,” she added.
The agency’s new climate hub will coordinate across the Treasury Department, with goals of mobilizing investment for clean energy investments and mitigating any risks climate change poses to financial stability, according to a news release.
That includes leveraging tax policy to support construction of “climate-resilient infrastructure” and promoting “globally consistent” ways to address climate financial risks, the agency said.
Yellen has picked John Morton, a veteran of the Obama White House, to lead the climate hub as the Treasury Department’s first “climate counselor,” reporting directly to Yellen as an adviser. Morton served as the senior director for energy and climate change at the National Security Council during the Obama administration, and he most recently was a partner at Pollination, a climate change advisory and investment firm.
The Treasury Department is likely to serve as an agenda-setter when it comes to how the Biden administration approaches climate finance, working with the White House to shepherd funds to clean energy as part of Biden’s infrastructure plan. As part of that effort, the Treasury Department has pledged to eliminate fossil fuel subsidies, which it said would increase government tax receipts by more than $35 billion.
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Other financial regulatory agencies are also taking specific steps on climate finance. The SEC, for example, has sought input on creating a regime for companies to report their greenhouse gas emissions and the risks they face from climate change.
The Biden administration’s moves have drawn fierce opposition from Republican lawmakers, however, who see the effort as an attempt to undercut investment in fossil fuel producers.
