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US senators blast Treasury“s failure to move faster on climate risks

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2023-03-10T03:38:39Z

A bronze seal for the Department of the Treasury is shown at the U.S. Treasury building in Washington, U.S., January 20, 2023.  REUTERS/Kevin Lamarque/File Photo

Three U.S. senators blasted the Treasury Department on Thursday for its failure to act more swiftly to counter climate risks, and urged Secretary Janet Yellen to appoint a new climate counselor to lead the effort.

In a letter to Yellen viewed by Reuters, Democratic Senators Elizabeth Warren, Sheldon Whitehouse and Edward Markey criticized the work done by John Morton, Yellen’s first climate counselor. Morton stepped down in December and returned to the private sector.

The senators said nearly two years had passed since Treasury created a “Climate Hub” and named Morton to coordinate its strategies, but the results have been disappointing.

Yellen has not yet named a replacement for Morton, although Treasury has dozens of people working on climate-related issues, including some in key senior positions.

Treasury spokesperson Julia Krieger underscored the central role the department had played in advancing the Biden administration’s climate agenda, including through passage of the Inflation Reduction Act’s clean energy tax incentives and work to better understand climate-related financial risks.

A second Treasury official said the criticism of Morton was “frustrating and unfair,” given his leadership on key initiatives, including $279 billion in clean energy tax credits under the IRA and in mobilizing capital for climate-friendly energy transitions around the world.

In their letter, the senators also faulted Treasury’s leadership of climate efforts by the Financial Stability Oversight Council, which identified climate change as an “emerging and increasing threat to U.S. financial stability” in October 2021.

The second Treasury official, who was not authorized to speak publicly, said the independent agencies grouped under FSOC were taking action, but those steps followed prescribed processes. No Treasury climate counselor could speed up that work since the agencies were independent, the official said.

The senators also faulted Treasury for failing to use its power as the largest shareholder in the International Monetary Fund to halt lending that enabled fossil fuel expansion in other countries, noting that other countries were moving faster.

They asked Yellen to respond to over a dozen questions on Treasury’s efforts to mitigate risks to the U.S. economy posed by accelerating climate change.

Yellen this week told an advisory panel climate change was already having a major economic and financial impact on the United States and may trigger asset value losses in coming years that could cascade through the U.S. financial system.


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