• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
The climate news that makes a difference.
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
  FEATURED
BREAKING: Federal Budget Pours Tens of Billions Into Clean Economy March 28, 2023
Somali Canadians Aid Drought-Stricken Homeland as 43,000 Reported Dead March 26, 2023
B.C.’s New Energy Framework a ‘Smokescreen,’ Critic Warns March 26, 2023
SPECIAL REPORT: ‘Defuse the Climate Time Bomb’ with Net-Zero by 2040, Guterres Urges G20 March 20, 2023
Devastating Impacts, Affordable Climate Solutions Drive IPCC’s Urgent Call for Action March 20, 2023
Next
Prev

U.S. Treasury Secretary Yellen Navigates Tricky Balance on Climate Financial Risk

September 21, 2021
Reading time: 3 minutes

Mark Warner/Wikimedia Commons

Mark Warner/Wikimedia Commons

1
SHARES
 

As U.S. Treasury Secretary Janet Yellen sets out to reshape the country’s financial regulations to account for climate risk, she faces a tricky balance between climate hawks calling for faster action and independent banking regulators with the institutional power to stymie it.

“While President [Joe] Biden has called climate change a ‘code red’ crisis, his treasury secretary is poised to resist calls to ask financial regulators to rein in lending to the nation’s worst greenhouse gas emitters,” the Washington Post reports.

  • Concise headlines. Original content. Timely news and views from a select group of opinion leaders. Special extras.
  • Everything you need, nothing you don’t.
  • The Weekender: The climate news you need.
Subscribe

Climate advocates are calling for aggressive action as Yellen as she explores how federal banking regulators can protect the country’s financial system from climate-related risks. But “Treasury’s expected hesitancy reflects long-standing reluctance to dictate social policy unilaterally, as well as the complicated bureaucratic structure of U.S. financial oversight,” the Post says.

Yellen’s appointment by Biden followed years of climate-negligent policy during the Trump era. She has since separated herself from her predecessor by initiating climate actions and emphasizing mandatory disclosure of climate-related risk by banks and public companies.

She has taken several other steps to address climate issues, like changing U.S. regulatory guidance for loans from international financial institutions to block further fossil fuel investments and prioritize funding for clean energy. Treasury has also established a climate hub at the Treasury and is “working to implement an international climate financing plan with global counterparts.” 

However, Yellen’s review is expected to disappoint climate advocates by focusing narrowly on mandatory disclosure as the next step in U.S. climate finance policy. The U.S. climate community counters that lending to fossil fuel companies “threatens the broader financial system through economic shocks,” thereby justifying a financial review process under federal power “to curb or discourage lending from Wall Street banks to companies that produce large amounts of carbon emissions.” 

Treasury officials maintain that using policy to crack down on lending will be difficult because of the “array of independent U.S. banking regulators” that would need to unite behind a climate agenda. They cite mandatory disclosure as a “necessary precursor” to any possible Treasury action enforcing lending restrictions. 

But advocates disagree. “Climate risk impacts all the firms that the financial regulators supervise,” Open Markets financial specialist Alexis Goldstein told the Post. “As a convener of regulators, Treasury needs to do more than acknowledge it—it should urge each financial regulator to use every tool at its disposal to tackle climate risks.” 

Other anticipated changes could empower regulators to provide advice for assessing carbon-intensive investments and subject banks to “stress tests” to determine their resilience to climate-related financial shocks. However, Sunrise Project Director Justin Guay told the Post that “disclosures and stress tests reveal the problem. They don’t do anything about the problem. It’s not even a job half-done.” 

Former Federal Reserve official Stacy Coleman cautioned that before Treasury’s Financial Stability Oversight Council (FSOC) can push new lending requirements, there needs to be some groundwork to better “understand what that means and how something like that would be put together.”

“I think Treasury is going as far as it can,” she said. “It’s not as simple as putting a charge on lending to fossil fuel companies.”

The “complicated bureaucratic structure of U.S. financial oversight” could undermine aggressive policy changes from Treasury, she added. Although the department can urge FSOC to adopt certain policies, it has no power to force independent banking regulators to enforce them.

“If Treasury advances climate rules that other members of FSOC regard as too far-reaching, the council’s membership could fracture,” the Post writes. “That could invite a legal challenge, or dilute the effectiveness of climate rules.”

As Yellen navigates to establish effective climate finance policy, the paper adds, “the potential split between the administration and some of its climate allies represents one of the more vexing challenges” on her agenda.



in Climate & Society, Coal, Community Climate Finance, COP Conferences, Energy / Carbon Pricing & Economics, Energy Politics, Energy Subsidies, Fossil Fuels, General Renewables, Insurance & Liability, Jurisdictions, Legal & Regulatory, Oil & Gas, Renewable Energy, United States

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

kelly8843496 / Pixabay
Finance & Investment

BREAKING: Federal Budget Pours Tens of Billions Into Clean Economy

March 29, 2023
707
TruckPR/flickr
Hydrogen

Opinion: Hydrogen Hype Sabotages Potential to Decarbonize

March 28, 2023
389
icondigital/pixabay
Supply Chains & Consumption

New Federal Procurement Rule Requires Biggest Bidders to Report Net-Zero Plans

March 28, 2023
195

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

kelly8843496 / Pixabay

BREAKING: Federal Budget Pours Tens of Billions Into Clean Economy

March 29, 2023
707
Faye Cornish/Unsplash

Abundance, Not Austerity: Reframe the Climate Narrative, Solnit Urges

March 26, 2023
173
U.S. Bureau of Safety and Environmental Enforcement/flickr

Willow Oil Project in Alaska Faces Legal Challenges, Economic Doubts

March 19, 2023
774
TruckPR/flickr

Opinion: Hydrogen Hype Sabotages Potential to Decarbonize

March 28, 2023
389
icondigital/pixabay

New Federal Procurement Rule Requires Biggest Bidders to Report Net-Zero Plans

March 28, 2023
195
NTSB

Ohio Train Derailment, Toxic Chemical Spill Renews Fears Over Canada-U.S. Rail Safety

March 8, 2023
1.6k

Recent Posts

UNICEF Ethiopia/flickr

Somali Canadians Aid Drought-Stricken Homeland as 43,000 Reported Dead

March 29, 2023
42
Σ64/Wikimedia Commons

B.C.’s New Energy Framework a ‘Smokescreen,’ Critic Warns

March 28, 2023
66
Prime Minister's Office/flickr

Biden’s Ottawa Visit Highlights EVs, Clean Grid, Critical Minerals

March 28, 2023
90
EUMETSAT/wikimedia commons

Cyclone Freddy Leaves Over 500 Dead on Africa’s Southeast Coast

March 23, 2023
65
Kern River Valley Fire Info/Facebook

SPECIAL REPORT: ‘Defuse the Climate Time Bomb’ with Net-Zero by 2040, Guterres Urges G20

March 20, 2023
344
IFRC Intl. Federation:Twitter

Devastating Impacts, Affordable Climate Solutions Drive IPCC’s Urgent Call for Action

March 21, 2023
1k
Next Post
Waterford_Man/flickr

Climate Lifestyles Mainly Matter as ‘Acts of Strategic Mass Mobilization’

The Energy Mix - The climate news you need

Copyright 2023 © Energy Mix Productions Inc. All rights reserved.

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Proudly partnering with…

scf_withtagline
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}