Treasury Secretary Janet Yellen announced Monday the creation of a new office within her department to tackle the financial consequences of climate change and hasten the nation’s economic transition away from fossil fuels.
Ms. Yellen, former chair of the Federal Reserve, unveiled a “coordinated strategy” to marshal the forces of the Treasury Department behind combating climate change.
As part of the effort, the Treasury Department is creating a “climate hub” that will serve as a clearinghouse for climate-related economic and tax policy. To lead the initiative, Ms. Yellen is appointing John Morton as the department’s first-ever climate counselor.
Mr. Morton, who previously led energy and climate change policy for the Obama-era National Security Council, will serve as the inaugural holder of the role. He will have wide-reaching influence in “mobilizing financial resources” for environmentally-friendly investments.
“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,” Ms. Yellen said. “Finance and financial incentives will play a crucial role in addressing the climate crisis at home and abroad and in providing capital for opportunities to transform the economy.”
The Treasury Department, in particular, is expected to push federal tax dollars and incentives to new climate change technologies.
Ms. Yellen‘s announcement comes as the White House is preparing an executive order requiring companies to detail their climate change risks. Although little is known about the upcoming order, it is likely to be administered by the Securities and Exchange Commission.
Former Secretary of State John Kerry, the White House’s special envoy for climate, recently described the action as a means to pressure investors into placing their money with environmentally sound companies.
“Suddenly, people are going to be making evaluations considering long-term risks to their investment based on the climate crisis … that will encourage new investment, as well as laws,” Mr. Kerry said.
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