Remarks by Secretary of the Treasury Janet L. Yellen at the Goeldi Museum in Belém, Brazil

As Prepared for Delivery

Good afternoon. I am very glad to be here at the Goeldi Museum with Inter-American Development Bank President Ilan Goldfajn and Governor Helder Barbalho and to have spent the day engaging with ministers from the region and leaders from the IDB and the private sector. I have seen today and throughout my week in Brazil the value of three key aspects of the Treasury Department's approach to advance the Biden-Harris Administration's international climate and nature and biodiversity agenda: strengthening relationships with allies and partners; making the international financial architecture work better for countries; and harnessing the power of markets.

But before I speak about each of these aspects, let me step back. Here in Belém, with the Amazon rainforest close by, the importance of our collective work is palpable and undeniable.

Climate change poses a daily and existential threat to individuals, communities, and countries. It harms human health, damages homes and businesses, and strains government budgets. It poses risks across sectors of our economies, from agriculture to infrastructure. And the harsh reality is that the people and countries with fewer resources to prepare and respond often must bear even greater costs.

In the Amazon and elsewhere, we also see another concerning trend: the unprecedented and accelerating loss of nature and biodiversity. Like climate change, this loss has wide-ranging impacts, from driving migration and fragility to increasing food and water insecurity. And we are in a vicious cycle: Climate change accelerates nature and biodiversity loss, while this loss turns carbon sinks into carbon sources and eliminates natural infrastructure that supports resilience to climate change.

Put simply, neglecting to address climate change and 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 is also a reminder that the transition to a lower-carbon global economy is also the single greatest economic opportunity of the twenty-first century. The transition will require no less than $3 trillion in new capital from many sources each year between now and 2050. This can be leveraged to support pathways to sustainable and inclusive growth, including for countries that have historically received less investment.

So the Biden-Harris Administration has made supporting the transition to net zero a top priority, and the Treasury Department is playing a key role. At home, we are implementing the Inflation Reduction Act, the most significant climate legislation in our nation's history. It is driving hundreds of billions of dollars of investments in the clean energy technologies and industries that will propel us toward our climate goals and fuel our economic growth. We launched the Net-Zero Principles for Financing and Investment to provide guidance to U.S. financial institutions pursuing net-zero commitments. And we and other federal agencies together put forward Principles for Responsible Participation in Voluntary Carbon Markets.

Our ambitions at home are matched by our ambitions abroad. We know that we can only achieve our climate and economic goals-from reducing global emissions to adapting and building resilience, from strengthening markets to bolstering supply chains-if we also lead efforts far beyond our borders. So let me talk about the tools we're using to achieve these goals, starting with strengthening relationships with our allies and partners.

I. Strengthening Relationships with our Allies and Partners

Since the start of this Administration, President Biden 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 have advanced initiatives that bring us closer to achieving our climate goals and benefit all of our economies.

When I visited an American company's lithium conversion plant in Antofagasta, Chile this spring, I saw firsthand the product of our efforts to bolster critical minerals supply chains. IDB's ongoing work to assess bottlenecks and opportunities will support enhancing competitiveness and attracting investment across Americas Partnership for Economic Prosperity countries.

We have worked with international partners to launch ambitious Just Energy Transition Partnerships with Indonesia, South Africa, and Vietnam to accelerate their just transitions and strengthen their economies. We are now seeing financing start to flow to support policy changes and projects.

We have also focused on making sure climate is high on the agendas of finance ministries-from together learning how to integrate climate risks into our macroeconomic models to jointly realizing climate-related opportunities.

Earlier this month, the United States announced that we will provide $50 million to Brazil's Amazon Fund this year, the first installment of President Biden's $500 million commitment. Just this week, Treasury launched a partnership with Fazenda to strengthen our collaboration on advancing effective climate action. Our work will span from bolstering clean energy supply chains to collaborating on carbon market integrity principles; from developing innovative solutions to protect nature and safeguard biodiversity to strengthening the climate finance architecture. This will include a focus on debt-for-nature swaps, which Treasury has conducted for 25 years, supporting 23 debt treatment agreements with 14 countries that have significant tropical forests or coral reefs, including many in Latin America. We are now working to develop principles that can drive the deployment of this tool to support countries around the world.

II. Making the International Financial Architecture Work Better for Countries

Treasury has also been focused on making the international financial architecture-both individual aspects and the system as whole-work better for countries. We cannot sustain progress on reducing poverty or achieve the sustainable development goals without more and better support for climate mitigation, adaptation, and resilience. So we need an architecture-from the multilateral development banks, to the climate and environment trust funds, to the IMF's Resilience and Sustainability Trust-that works as a system to deliver, at speed and at scale, the financial, technical, and policy assistance that developing countries need to achieve their sustainable development and climate goals.

Three years ago, shortly after taking office, I convened the heads of the MDBs to encourage them to significantly raise their climate ambitions and to discuss concrete actions they could take to mainstream climate change in their operations. Just under two years ago, I called for evolving the MDBs. Progress has since accelerated. The World Bank, including thanks to President Banga's leadership, is now confronting the reality of climate change, putting it at the center of the Bank's agenda, and providing greater resources to tackle it. The regional development banks, including the IDB, have stepped up as well.

As we now work to set new targets for climate finance, we build on developed countries having provided and mobilized a record almost $116 billion in climate finance for developing countries in 2022. 40 percent of this was through the MDBs, which increased their climate finance by more than 20 percent from 2021 to 2022.

And addressing climate change is now part of the MDBs' DNA. They are better equipped to include climate impacts in diagnostic tools and to provide targeted incentives for climate projects. They are working towards aligning all projects with Paris Agreement goals and screening all projects for adaptation. Countries are benefitting from a broader suite of tools to respond to climate-related shocks and crises. And we see greater innovation and responsiveness across the system-from enabling exceptional access to financing for high income small island developing states to piloting climate resilient debt clauses.

The MDBs have also scaled up work on nature and biodiversity, as was clear in the meeting the IDB hosted earlier today. We helped drive reforms at the IDB, including a new business model for its private sector arm, IDB Invest, that includes a focus on climate and nature and biodiversity. And we were proud to partner with the IDB to create the Americas Partnership Fund for Nature to finance technical support for nature-based solutions.

The climate funds have also been critical to work on climate and nature and biodiversity. The Global Environment Facility, to which the U.S. has been a leading contributor from the start, has dedicated billions to conservation, as one of many powerful examples. And we have made great strides so that these funds better deliver for recipient countries, from improvements at existing funds such as shortening approval times to operationalizing the new Fund for responding to Loss and Damage.

As we look ahead, we will continue to support work at the MDBs on climate and nature and biodiversity, from developing outcome metrics that drive meaningful results as opposed to just dollars out the door to pioneering new models for investing in ecosystems. At the climate funds, we are encouraged by the action plan the funds themselves are developing and by the review of the Independent High-Level Expert Group under Brazil's G20 leadership. We look forward to supporting next steps to make these funds more efficient, effective, and accessible to developing countries. And we will continue to insist that investments in climate and nature and biodiversity, like all investments, reflect strong environmental and social safeguards and respect Indigenous Peoples' way of life and expertise.

III. Harnessing the Power of Markets

I will end by emphasizing a third key aspect of our approach: our commitment to harness the power of markets to advance the climate transition and to capitalize on massive economic opportunities.

As we implement the IRA and see a boom in private sector investment in clean energy industries across the United States, American companies are also pursuing global opportunities. Here in Brazil, Amazon and Microsoft are making significant investments in renewable energy such as solar and wind and supporting forest restoration, among many other examples across the region.

We are focused on supporting private sector engagement through strengthening our relationships with allies and partners, as the new Fazenda-Treasury Partnership prioritizes crowding in more private investment to finance climate transitions.

And private capital mobilization has been part of our agenda at the MDBs and the climate funds. The World Bank is designing a new securitization platform geared towards institutional investors, who control trillions in assets globally, and launched a new platform expected to triple guarantee issuances to $20 billion per year by 2030, enabling lower cost, longer-duration private financing flows. The Climate Investment Funds has developed a Capital Markets Mechanism.

We have also started new initiatives. In 2022, President Biden and G7 leaders launched the Partnership for Global Infrastructure and Investment, which has funded and mobilized tens of billions in investments, including in renewable energy access. And yesterday I joined Investor Leadership Network partners to announce a new Emerging Markets Transition Debt initiative that will increase institutional investors' climate- and development-aligned investment in emerging markets.

We see too that harnessing the power of markets depends not just on supporting a pipeline of opportunities but on providing guidance that shapes behavior. Building on our work at home on the Net-Zero Principles for Financing and Investment, we are now working through the G20 Sustainable Finance Working Group to develop high-level principles for financial institution and corporate transition plans. And following our Principles for Responsible Participation in Voluntary Carbon Markets, the Fazenda-Treasury Partnership will include exchanges on carbon market integrity principles to help strengthen these markets across the world's largest financial market, the United States, and the world's carbon sink here in the Amazon.

IV. Conclusion

Ultimately, through strengthening relationships, making the international financial architecture work better for countries, and harnessing the power of markets, we're making progress toward tackling climate change, the loss of nature and biodiversity, and related challenges. We are continuously working to mitigate risks to our economy and capitalizing on new economic opportunities. Here in Belém, as we look toward COP30, we celebrate the progress we have made and renew our commitment to doing all we can in the months and years ahead.

This work is complex and challenging. But I come away from today's engagements with the belief that we collectively have the ambition, willingness to collaborate, and are developing the tools to secure a better future for our planet and for all our people. Thank you for being here today.

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