US Treasury tells development banks to mobilize private capital for climate change

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US Treasury Secretary Janet Yellen told heads of the World Bank and other multilateral development banks on Thursday that they need to come up with concrete plans to mobilize significantly more capital to fight climate change and support emissions reduction targets.

The Treasury said in a statement that Yellen, White House climate envoy John Kerry, and the heads of major development banks discussed ways to “maximize” private capital for climate change financing and the banks’ internal incentives and practices in that regard. to re-evaluate.

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“Secretary Yellen encouraged the MDBs to pay more attention to climate adaptation, particularly through private sector activities, and to support developing countries in implementing ambitious emission reduction measures and protecting critical ecosystems,” the Treasury Department said.

Yellen will reconvene the group “to discuss their concrete plans in October” on the sidelines of the annual meetings of the World Bank and the International Monetary Fund.

One of the possible initiatives discussed at the meeting was for banks to go beyond their traditional development financing to help countries develop green bond markets and create an enabling environment to attract more private climate investment.

In addition to the World Bank Group, the institutions participating in the meeting were the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank.

World Bank President David Malpass tweeted that there was “a good discussion about climate change” at the meeting. “A sense of urgency for climate action is vital in addressing challenges of transition, access to electricity and private sector mobilization for mitigation/adaptation.”

Yellen had said at a G20-related climate conference in Venice, Italy, that she would ask the institutions to “increase their climate ambitions” to support the 2015 Paris Agreement to cut carbon emissions.

Yellen, who was asked by Reuters in an interview last week whether she would order MDBs to stop funding fossil fuel projects, said: “I think our stance will probably be that where there are alternatives, we certainly wouldn’t. accept coal – coal-fired installations – and we have a strong preference for environmentally friendly projects.

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